ITPEC FE Morning October 2018 Question 28
ITPEC FE Morning October 2018 — Question 28 of 80
Double-Entry Bookkeeping in a Relational Model — find the correct Transfer record for a sales-to-cash transaction.
Given transaction 0122: "500 dollars sales to Company X posted to cash account."
Double-entry rule: total Debit = total Credit per transaction.
- •Cash (510) is an asset → increases on Debit side
- •Sales (208) is revenue → increases on Credit side
Existing row: AccountCode=208, Credit, 500, 0122
Missing row must be: AccountCode=510, Debit, 500, 0122
→ A = 510, B = Debit
Why not others:
- (a) 208, Credit — duplicates the existing row; Cash (510) never appears
- (b) 208, Debit — two entries for Sales, no Cash account involved
- (c) 510, Credit — Credit on Cash means cash leaving, opposite of receiving payment
Key rule: Assets increase on Debit; Revenue increases on Credit. Each accounting transaction must balance: Σ Debit = Σ Credit.
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