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+---- Thread: Loans, Part 3, Question 14 (/Thread-Loans-Part-3-Question-14--1925)
Loans, Part 3, Question 14 - mstcrow5429 - 06-27-2007
Are loans debited to the cash account, or not (they aren't in the question)? Where do they go if not?
Loans, Part 3, Question 14 - Matymus - 06-27-2007
I believe they are debited to the cash account. I hope I'm not wrong on that one. :eek:
Loans, Part 3, Question 14 - snazzlefrag - 06-27-2007
Matymus Wrote:I believe they are debited to the cash account. I hope I'm not wrong on that one. :eek:
You are not wrong on this one Matymus,
Assuming that the loan is made TO the company, it would INCREASE (debit) the cash account (current asset). At the same time, it would also INCREASE (credit) the Bank Loan Payable account (current liability).
Hope that helps,
Snazzlefrag
Loans, Part 3, Question 14 - Matymus - 06-28-2007
snazzlefrag Wrote:You are not wrong on this one Matymus,
Assuming that the loan is made TO the company, it would INCREASE (debit) the cash account (current asset). At the same time, it would also INCREASE (credit) the Bank Loan Payable account (current liability).
Hope that helps,
Snazzlefrag
Good!! That's what I thought! I'm no CPA, but man...I like to at least think I have SOME accounting knowledge.