Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

Sally had $1000 in the bank when she made a payment of $1500 to purchase goods for resale. The bank authorised the payment. In Sally’s books of account, how was this transaction entered?

  • Ainventory debited 1500; bank credited 1500
  • Binventory debited 1500; bank credited 1000; bank overdraft credited 500
  • Cpurchases debited 1500; bank credited 1500
  • Dpurchases debited 1500; bank credited 1000; bank overdraft credited 500

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