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InterviewSolution
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State whether the following statements are True or False with reason:Goods lost by theft are debited to the goods account. |
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Answer» This statement is False. Correct statement: Goods lost by theft is credited to the goods account. Reasons: Goods account is a real account because unsold goods are the property of the business. If goods are purchased or acquired, the Goods account is debited and if goods are sold or lost from the business, they are credited. As per the traditional approach, goods lost means go away from the business, and whatever goes out an account of it is credited. As per the modern approach if loss of business increases account of such loss is credited in the hooks of account. |
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