26 July 2008
In case of an educational Institution a development fund is created and it can be used for purchase of a machinery. The credit balance in the development fund is represented by an equal debit balance in a separate bank balance.
A machine has been purchased. The normal accounting entry would be, debit fixed asset and credit bank account.Now the question arises how to reduce the Development fund ledger balance as bank balance has already reduced due to payment made for purchase of a machine.
so query is:
If we debit Development Fund, which account is to be credited.
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