Conversation to LLP
This query is : Resolved
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
(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
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.
When assets and liabilities are taken over the net amount is credited to business purchase account towards net liability taken over.
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