Conversation to LLP

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Subhrajit Chakraborty (Querist)
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19 December 2022 In Conversation to LLP chapter, in the books of Purchasing Company

(I) When the amount is payable to old firm by purchasing company

🔸Business Purchases A/c is debited and Old Firm A/c is credited

(II) When assets and liabilities taken over from old firm

🔸Sundry Assets A/c is debited and Sundry Liabilities a/c, Provision for bad debts a/c and Business purchase a/c, all are credited

Now my question is why Business Purchase account was first debited and then credited 😅 I am really confused

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 December 2022 When the amount is payable to old firm by purchasing company 🔸Business Purchases A/c is debited.
When assets and liabilities are taken over the net amount is credited to business purchase account towards net liability taken over.