Cash a/c
Contract a/c
Contractor a/c
Contractee a/c
Answer is Right!
Answer is Wrong!
The correct answer is: A. Cash a/c
When cash is received from a contractee, the cash account should be credited. This is because the cash account is a liability account, and when cash is received, the liability is reduced. The contract account is an asset account, and the contractor account is an equity account. Neither of these accounts should be credited when cash is received from a contractee.
Here is a more detailed explanation of each option:
- Cash a/c: The cash account is a liability account that represents the amount of cash that a company has on hand. When cash is received from a contractee, the cash account should be credited. This is because the cash account is a liability account, and when cash is received, the liability is reduced.
- Contract a/c: The contract account is an asset account that represents the amount of money that a company is owed for work that has been completed. When cash is received from a contractee, the contract account should not be credited. This is because the contract account is an asset account, and when cash is received, the asset is not reduced.
- Contractor a/c: The contractor account is an equity account that represents the amount of money that a company owes to a contractor for work that has been completed. When cash is received from a contractee, the contractor account should not be credited. This is because the contractor account is an equity account, and when cash is received, the equity is not reduced.
I hope this helps! Let me know if you have any other questions.