Answer to Question #178353 in Accounting for Milan

Question

Debit Cash

Credit Investment in Investee

• What does this journal entry mean? Are you receiving cash because you sold the investment.

Please correct me my statement if its needed to be corrected. Thank you.

Answer 1

A debit cash is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet. In other words, A debit increases asset or expense accounts, and decreases liability, revenue or equity accounts.

Currently, I am not receiving cash because of selling the investment.