Capital Account Q AP2
Focus888
Registered Posts: 46 Regular contributor ⭐
I had a similar question to this in my AP2 exam and i would really like to know what the correct answer would be.
Capital Account
The info they give is, introduced £20,000 from the capital account.
Owner transfers £2,000 goods to the business for resale.
Owner buys a vehicle for £5000 from the bank account.
I thought it was:
Credit side of capital
(bank) £20,000
(purchases) £2,000
Debit side
bal cd £22,000
And ignored the vehicle as it was coming out from the bank account.
Can someone let me know the correct answer to this please?
Thanks
Capital Account
The info they give is, introduced £20,000 from the capital account.
Owner transfers £2,000 goods to the business for resale.
Owner buys a vehicle for £5000 from the bank account.
I thought it was:
Credit side of capital
(bank) £20,000
(purchases) £2,000
Debit side
bal cd £22,000
And ignored the vehicle as it was coming out from the bank account.
Can someone let me know the correct answer to this please?
Thanks
0
Comments
-
I had the same question, and I would agree with your answer.0
-
Badly worded question. Was the vehicle for the business, or owned privately? If the latter, that's a debit to his capital account but if not, its a debit to fixed assets.0
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