Question

What accounting entries are required to be made by AK Ltd to properly account for the amount received from BN Ltd?

Answer 1

When AK Ltd receives an amount from BN Ltd, they need to make certain accounting entries to properly account for the transaction.

Step-by-step explanation:

When AK Ltd receives an amount from BN Ltd, they need to make certain accounting entries to properly account for the transaction. The specific entries will depend on the nature of the transaction and the accounts involved. However, some common entries that could be made include:

1. Debit the cash or bank account to reflect the increase in cash.
2. Credit the accounts receivable or sales account to recognize the revenue earned.
3. If there is any expense associated with the transaction, such as a commission or fee, it should be debited to the appropriate expense account.
4. Finally, assess if any taxes need to be debited or credited into the relevant tax accounts.

It's important to consult with a qualified accountant or refer to the specific accounting standards and policies of AK Ltd to ensure the entries are made correctly.