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Page No 91:
Question 1.A.1:
Answer in once sentence only.
What is a Journal?
Answer:
A Journal is the book of original entry or prime entry in which transactions are recorded in the books of accounts from the source documents. The transactions are recorded in a chronological order, i.e. as and when they take place. The transactions are recorded following the double-entry system of accounting.
Page No 91:
Question 1.A2:
Answer in once sentence only.
State the meaning of Narration.
Answer:
A brief explanation of the transaction, together with necessary details, is provided with the Journal entry. This explanation is called a narration. It provides the details of the Journal entry and helps understand the account debited or credited.
Page No 91:
Question 1.A3:
Answer in once sentence only.
What do you mean by Journalising?
Answer:
The process of recording transactions in the book of original entry is known as Journalising. The transactions are recorded in the form of a Journal entry. Recording is made following the double-entry system of accounting. Thus, it records the two-fold effect of every transaction. In the process of Journalising, the transaction is first analysed in order to decide the account to be debited and credited by ascertaining the rule of debit and credit. After this, entries are recorded in the books of accounts.
Page No 91:
Question 1.A4:
Answer in once sentence only.
Which column in a journal is not filled in at the time of journalising?
Answer:
The ledger folio (L.F.) is the column that is not filled at the time of Journalising. This column indicates the page number of the Ledger book on which the relevant account appears. All the entries from Journal are posted to the Ledger Accounts. Therefore, the ledger folio is recorded after the entries are posted to the Ledger Accounts and not at the time of Journalising.
Page No 91:
Question 1.A5:
Answer in once sentence only.
State the meaning of Simple Entry.
Answer:
When only two accounts are affected while recording a transaction in the book of original entry, i.e. one account is debited and one account is credited, it is known as a Simple Journal Entry. For example, if Rs 500 were paid to Hari, the entry will be:
| Hari | Dr. | 500 | ||
| To Cash A/c | 500 | |||
| (Payment is made to Hari) | ||||
Page No 91:
Question 1.A6:
Answer in once sentence only.
Which account is credited, when salary is paid by cheque?
Answer:
When salary is paid by cheque, the Bank A/c is credited because payment is made through a cheque. According to the modern classification of accounts, an increase in any asset should be debited, whereas a decrease in any asset should be credited. The Bank A/c is an asset of a business and, thus, it is credited.
Page No 91:
Question 1.A7:
Answer in once sentence only.
Why is journal called the Book of Prime Entry?
Answer:
A Journal is called the book of prime entry because all the transactions of a business are first recorded in a Journal, i.e. book of original entry. The transactions are recorded in chronological order and on the basis of the source documents. After recording, these transactions are posted to the ledger accounts, i.e. secondary books. Hence, a Journal is called the book of prime entry.
Page No 91:
Question 1.A8:
Answer in once sentence only.
In which order the transactions are recorded in a journal?
Answer:
A Journal records the transactions in a chronological order, i.e. as and when they occur. Transactions of a business are recorded in the book of original entry on the basis of their occurrence from the source document.
Page No 91:
Question 1.A9:
Answer in once sentence only.
Which discount is not recorded in the books of account?
Answer:
A trade discount is not recorded in the books of accounts. This discount is allowed at the time of sale or purchase of goods at an affixed percentage on the printed list price of the goods. The purchases and sale transactions are recorded in the books at net value (i.e. List Price minus Trade Discount). Thus, the books of accounts do not reflect the amount of trade discount so allowed or received.
Page No 91:
Question 1.A10:
Answer in once sentence only.
Which account is debited, when goods are destroyed by fire?
Answer:
When goods are destroyed by fire, then ‘Loss by Fire A/c’ is debited and ‘Purchases A/c’ is credited. The goods destroyed by fire are considered to be a loss for a business entity and is classified as a nominal account. Therefore, according to the rule of nominal account, all the expenses and losses are to be debited. Hence, ‘Loss by Fire A/c’ is debited when goods are destroyed by fire.
Page No 91:
Question 1.B:
Give one word / term or phrase for each of the following statements.
(1) A book of original entry.
(2) The process of recording transactions in the journal.
(3) Brief explanation of an entry.
(4) The French word from which the word journal is derived.
(5) Entry in which more than one account are to be debited or credited.
(6) Anything taken by proprietor from business for his personal use.
(7) Amount of money payable to broker while buying and selling the shares and securities.
(8) Entry in which one account is debited and another account is credited
(9) The column in journal, which is not filled at the time of Journalising.
(10) An account that is debited when rent is paid to landlord.
Answer:
(1) A book of original entry- Journal
All the transactions of a business are recorded for the first time in the book of original entry. A Journal is one of the main book of original entry. It is called the book of original entry as all the transactions are recorded in the Journal in a chronological order.
(2) The process of recording transactions in the journal- Journalising
Journalising is the process of recording transactions in the book of original entry, i.e. a Journal. The transactions are recorded in a chronological order, i.e. occurrence-wise. These transactions are recorded according to the rules of debit and credit and after ascertaining the accounts that are affected.
(3) Brief explanation of an entry- Narration
The narration is a brief explanation of the transaction together with the necessary details that are provided with the Journal entry. It is necessary to write the narration, as it provides the details of the Journal entry and helps understand the account that is debited or credited. For example, a narration for the transaction of payment of Rs 2,000 as salary will be:
Salary of Rs 2000 is paid in cash.
(4) The French word from which the word journal is derived- Jour
Journal is derived from the French word ‘Jour’ which means daily records. Therefore, Journal means a book, wherein the day-to-day transactions are recorded date–wise, i.e. in a chronological order.
(5) Entry in which more than one account are to be debited or credited- Compound/ Combined entry
The Journal entries in which more than one account is to be debited or credited are known as compound or combined journal entries. Sometimes, two or more transactions, relating to one particular account, may take place on the same date. Hence, instead of passing separate entries for all such transactions, only one entry is passed.
For example: - On 30th June, Rs 5,000 for salaries and Rs 2,000 for rent are paid in cash. The entry will be:-
Salary A/c | Dr. | 5,000 | |
Rent A/c | Dr. | 2,000 | |
To Cash A/c | 7,000 | ||
(Salaries and Rent are paid in cash) |
(6) Anything taken by proprietor from business for his personal use- Drawings
The amount/ value of goods taken by a proprietor from a business for his personal use are termed as drawings.
(7) Amount of money payable to broker while buying and selling the shares and securities- Brokerage
Any fee or commission paid to a broker, who is engaged in buying and selling of shares and securities, is termed as brokerage.
(8) Entry in which one account is debited and another account is credited- Simple entry
An entry in which one account is debited and another account is credited, is termed as simple entry. It involves only two accounts, i.e. one is debited and other is credited. For example: Goods worth Rs 4,000 are purchased for cash. It involves two accounts: ‘Purchases A/c’, which will be debited and ‘Cash A/c’, which will be credited.
(9) The column in journal, which is not filled at the time of Journalising- Ledger Folio
The Ledger Folio is the column that is not filled at the time of Journalising. This column records the page number or folio number of the ledger accounts on which the relevant account appears. Thus, the page number of the ledger accounts can only be recorded once the entries are posted to the ledger. Hence, this column is not filled at the time of Journalising.
(10) An account that is debited when rent is paid to landlord- Rent A/c
The payment of rent is an expense for a business and all the expenses are classified as a nominal account. As per the rule of nominal account, all expenses and losses should be debited and all incomes and gains should be credited. Hence, Rent A/c will be debited.
Page No 91:
Question 1.C1:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
The ______ column of the journal is not entered at the time of Journalising.
a) Date
b) Particulars
c) Ledger Folio
d) Amount
Answer:
The
Ledger Foliocolumn of the journal is not entered at the time of Journalising.
Explanation:The Ledger Folio column shows the page number or folio number on which the relevant account appears. A Journal is the book of original entry from where the entries are posted to their respective ledger accounts. Thus, the Ledger Folio column is entered after the entries are posted to the ledger accounts and not at the time of Journalising.
Page No 91:
Question 1.C2:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
Recording of transaction in the journal is called _____ .
a) Posting
b) Casting
c) Tallying
d) Journalising
Answer:
Recording of transaction in the journal is called
Journalising.
Explanation:The process of recording transactions in the book of original entry, i.e. a Journal, is known as Journalising.
The process of posting entries from the Journal to the Ledger is known as posting. All the entries from the Journal are posted in their respective Ledger Accounts.
The totaling of Sales and Purchases Books is known as casting.
Tallying means matching the debit and credit totals of the columns.
Page No 91:
Question 1.C3:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
Goods or Amount taken by proprietor for his personal use should be debited to ______.
a) Sales A/c
b) Drawing A/c
c) Purchases A/c
d) Cash A/c
Answer:
Goods or Amount taken by proprietor for his personal use should be debited to
Drawings A/c.Explanation:Drawings represent the amount withdrawn by the proprietor from his/her business. It can be either in cash or kind (goods withdrawn for personal use). Such withdrawals reduce the amount of capital and are debited to a separate account known as Drawings Account.
Rationale behind why drawings are not debited to Purchases A/c, Sales A/c or Cash A/c?Purchases A/c is debited when some goods are purchased for resale.
Sales A/c is credited when goods are sold for cash or on credit.
Finally, Cash A/c is debited when cash sales are made.
Hence, Drawings A/c is debited when the proprietor withdraws goods or cash from the business for his/her personal use.
Page No 91:
Question 1.C4:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
Cash purchases of goods should be credited to ______.
a) Purchase A/c
b) Sales A/c
c) Cash A/c
d) Goods A/c
Answer:
Cash purchases of goods should be credited to
Cash A/c.Explanation:A cash account is classified as a real account. The rule for recording transactions of a real account is to debit what comes in and to credit what goes out. Cash purchases of goods will lead to an outflow of cash, i.e. cash is going out. Hence, the cash account is credited and the purchases account is debited. The sales account is credited only when goods are sold.
Page No 91:
Question 1.C5:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
Wages paid for installation of machinery should be debited to ______.
a) Wages A/c
b) Machinery A/c
c) Cash A/c
d) Installation A/c
Answer:
Wages paid for installation of machinery should be debited to
Machinery A/c.Explanation:Any expenditure incurred on the carriage and installation of machinery such as freight, transit expenses, installation expenses, wages etc should be treated as capital expenditure and should be debited to the Machinery A/c. This expenditure is non-recurring in nature and, thus, added to the value of the machinery. Thus, it should be debited to the Machinery A/c and not to the Wages A/c.
Page No 91:
Question 1.C6:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
The rent paid to the land lord should be debited to ______.
a) Drawing A/c
b) Cash A/c
c) Landlord A/c
d) Rent A/c
Answer:
The rent paid to the land lord should be debited to
Rent A/c.Explanation:The rent paid to the landlord is an expense. Thus, in adherence to the rule of nominal accounts, all such expenses and losses are to be debited; therefore, in this case, Rent A/c will be debited.
Page No 91:
Question 1.C7:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
The amount brought in by the proprietor in the business should be credited to
a) Salary A/c
b) Mandar’s A/c
c) Cash A/c
d) Capital A/c
Answer:
The amount brought in by the proprietor in the business should be credited to
Capital A/c.Explanation:Any amount/value of goods withdrawn from a business is known as drawings and is deducted from the capital account of the proprietor. Likewise, any additional amount brought in by the proprietor is treated as capital and will be added to the existing capital of the business.
Page No 91:
Question 1.C8:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
A payment of Rs. 100 to Kokate Carriage Co. for bringing a machine to the business place should be debited to ______.
a) Machine A/c
b) Cash A/c
c) Kokate carnage Co. A/c
d) Carriage A/c
Answer:
A payment of Rs. 100 to Kokate Carriage Co. for bringing a machine to the business place should be debited to the
Machine A/c.Explanation:The expenses incurred to bring in assets in a workable condition before they are put to use are capitalised and added to the asset account. Therefore, the expenses incurred for bringing a machine to a business place should be debited to the machine account. This expenditure is non-recurring in nature and any expenses incurred before the asset is put to use are debited to the asset account.
Page No 91:
Question 1.C9:
Select the most appropriate alternative from the alternatives given below and rewrite the statement.
A purchase of horse in cash should be debited to ______
a) Livestock A/c
b) Goods A/c
c) Cash A/c
d) Bank A/c
Answer:
A purchase of horse in cash should be debited to
Livestock A/c.Explanation:
Domestic animals used in a business to help in doing business more effectively are treated as assets of the business and included under the head of the Livestock A/c. Hence, the purchase of a horse will be debited to the Livestock A/c.
It is not the goods of the business, as it is not purchased for resale in business.
Page No 92:
Question 1.D:
State whether the following statements are true or false:
(1) A journal voucher is must for all transactions recorded in the journal.
(2) Journal is a book of secondary entry.
(3) Narration is not necessary for each and every journal entry.
(4) Every transaction is recorded first in the journal.
(5) Live Stock A/c is a Nominal A/c.
(6) Bank of Maharashtra A/c is a Nominal A/c.
(7) Brokerage paid on sale of goods is debited to brokerage A/c.
(8) If the goods are sold the entry should be recorded in the journal.
(9) Goods withdrawn by the proprietor from business is debited to the Drawing A/c.
(10) Cash discount does not appear in the books of accounts.
(11) If rent is paid to the landlord, landlord’s A/c should be debited.
(12) Book keeping records monetary transactions only.
(13) Drawings made by the proprietor increases his capital.
(14) Premium paid on the life policy of the proprietor should be debited to insurance premium account.
Answer:
(1) True
The above statement is true, since vouchers act as the base for the recording of all the transactions. Vouchers are regarded as the source documents, based on which the transactions are recorded in the Journal book in form of Journal entries. Thus, for all the transactions that are recorded in the Journal book, corresponding voucher is a necessary condition.
(2) False
A Journal is a book of original or prime entry and not a book of secondary entry. All the business transactions are first recorded in the Journal, and then postings are made in the respective Ledger Accounts, i.e. secondary books. Thus, a Journal is a book of original entry.
(3) False
This statement is false because narration is a brief explanation of a transaction, together with necessary details that are provided with the Journal entry, which helps to understand the account which is to be debited or credited. Thus, a narration is necessary for each and every Journal entry, as it provides the details of the Journal entry and helps understand the entry.
(4) True
Every business transaction is first of all recorded in a Journal or Subsidiary Books known as books of original or prime entry and then postings are made in the relevant ledger accounts from which the final accounts are prepared. Thus, every transaction is recorded first in the Journal.
(5) False
Livestock A/c records the monetary value of the domestic animals used in a business such as dog, horse, cow etc. Thus, it is a fixed asset of a business and all the assets of the business whose value can be measured in terms of money are classified under the real account, whereas , the nominal account includes the accounts related to expenses, losses, incomes and gains. Therefore, the Live Stock A/c is a real account and not a nominal account.
(6) False
All the accounts of persons, companies or institutions are classified as personal accounts. The Bank of Maharashtra A/c is related to the banking firm, which is an artificial person, and all the accounts related to people, whether artificial or natural, are termed as personal accounts.
(7) True
Brokerage is a fee or commission paid to a broker who is engaged in buying and selling shares and securities. Hence, it is an indirect expense for a business that is to be accounted under Brokerage A/c. Being an expense for the business, it should be debited to the Profit and Loss A/c, according to the rule of nominal account.
(8) True
When goods are sold, the transactions should be recorded in the book of original entry, i.e. Journal. All the business transactions of a business are recorded in the Journal and, thus, it is called the book of original entry. Hence, the entries for the goods sold should be recorded in the Journal.
(9) True
Drawings A/c shows all the withdrawals made by a proprietor from the business for his/her personal use. The withdrawals may be in the form of cash or goods. Thus, goods withdrawn by the proprietor are debited to Drawings A/c.
(10) False
A cash discount is the discount given to the customers for early payments. It is provided at the time of receiving the payment. Thus, it should be recorded in the books of accounts. Thus, the cash discount appears in the books of accounts, whereas, the trade discount does not appear in the books of accounts.
(11) False
If rent is paid to a landlord, Rent A/c should be debited and not the Landlord’s A/c. It is an expense for the business and should be accounted under Rent A/c. Rent is an expense for the business and falls under the category of nominal accounts. Hence, Rent A/c should be debited.
(12) True
Book keeping records only those transactions whose value can be measured in terms of money.
Note:
As we all know that all those transactions which can be measured in monetary terms are recorded in the books of accounts. Thus, the above statement is true and the solution provided in the book is incorrect.
(13) False
This statement is false because drawings made by a proprietor decrease his capital. Drawings are the cash or goods that are withdrawn by a proprietor from business for his/her personal use. Thus, it will reduce or decrease the capital of the proprietor in the business.
(14) False
Premium paid on the life policy of a proprietor is regarded as the personal expense of the proprietor and, thus, should be treated as drawings. Hence, it should be debited to Drawings A/c instead of Insurance Premium A/c.
Page No 92:
Question 1:
Journalise the following transactions in the books of Mr. Akshay.
2010 April | 1 | Mr. Akshay started business with Cash Rs 80,000. |
4 | Purchased goods form Mona Rs 28,000. | |
7 | Deposited cash into Dena Bank Rs 39,000. | |
10 | Sold goods to Dinesh Rs 41,000. | |
13 | Purchased Laptop of Rs 30,000 in cash. | |
17 | Paid Mona by cheque Rs 30,000. | |
20 | Paid wages Rs 500. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
April 2010 | |||||
1 | Cash A/c | Dr. | 80,000 | ||
To Capital A/c | 80,000 | ||||
(Commenced business with cash) | |||||
4 | Purchases A/c | Dr. | 28,000 | ||
To Mona | 28,000 | ||||
(Goods purchased from Mona) | |||||
7 | Bank A/c | Dr. | 39,000 | ||
To Cash A/c | 39,000 | ||||
(Cash deposited into Dena Bank) | |||||
10 | Dinesh | Dr. | 41,000 | ||
To Sales A/c | 41,000 | ||||
(Goods sold to Dinesh on credit) | |||||
13 | Laptop A/c | Dr. | 30,000 | ||
To Cash A/c | 30,000 | ||||
(Laptop purchased in cash) | |||||
17 | Mona | Dr. | 30,000 | ||
To Bank A/c | 30,000 | ||||
( Issue of cheque to Mona) | |||||
20 | Wages A/c | Dr. | 500 | ||
To Cash A/c | 500 | ||||
( Wages paid) | |||||
Page No 92:
Question 2:
Journalise the following transactions in the books of Miss. Nivedita.
2010 May | 1 | Commenced business with Cash Rs 2,10,000. |
4 | Purchased goods for cash Rs 60,000. | |
5 | Sold good for cash Rs 70,000. | |
9 | Deposited into Bank of India Rs 1,00,000. | |
13 | Paid for stationery Rs 10,000. | |
17 | Purchased Computer with printer Rs 40,000. | |
21 | Purchased goods from Ravi for Rs 50,000 on credit. | |
25 | Paid for Office Rent Rs 2,000. | |
26 | Received Commission Rs 1,000. | |
30 | Withdrew from bank for office use Rs 50,000. | |
31 | Paid for salaries Rs 4,500. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
May 2010 | |||||
1 | Cash A/c | Dr. | 2,10,000 | ||
To Capital A/c | 2,10,000 | ||||
(Commenced business with cash) | |||||
4 | Purchases A/c | Dr. | 60,000 | ||
To Cash A/c | 60,000 | ||||
(Goods purchased for cash) | |||||
5 | Cash A/c | Dr. | 70,000 | ||
To Sales A/c | 70,000 | ||||
(Goods sold for cash) | |||||
9 | Bank A/c | Dr. | 1,00,000 | ||
To Cash A/c | 1,00,000 | ||||
(Cash deposited into Bank of India) | |||||
13 | Stationery A/c | Dr. | 10,000 | ||
To Cash A/c | 10,000 | ||||
( Stationery purchased) | |||||
17 | Computer A/c | Dr. | 40,000 | ||
To Cash A/c | 40,000 | ||||
( Computer purchased) | |||||
21 | Purchases A/c | Dr. | 50,000 | ||
To Ravi | 50,000 | ||||
(Goods purchased from Ravi on credit) | |||||
25 | Rent A/c | Dr. | 2,000 | ||
To Cash A/c | 2,000 | ||||
(Office Rent paid) | |||||
26 | Cash A/c | Dr. | 1,000 | ||
To Commission A/c | 1,000 | ||||
( Commission received) | |||||
30 | Cash A/c | Dr. | 50,000 | ||
To Bank A/c | 50,000 | ||||
(Withdrew from bank for office use) | |||||
31 | Salaries A/c | Dr. | 4,500 | ||
To Cash A/c | 4,500 | ||||
(Salaries paid) | |||||
Page No 92:
Question 3:
Journalise the following transactions in the books of Mantri.
2011 June | 1 | Commenced business with Cash Rs 1,20,000, Goods Rs. 60,000 and Furniture Rs 65,000. |
3 | Opened a current account in Bank of Baroda by depositing Rs 75,000. | |
5 | Cash purchases Rs 35,000. | |
9 | Cash Sales Rs 55,000. | |
10 | Purchased goods worth Rs 20,000 from Amit & Co. subject trade discount of 2% | |
14 | Credit sales to Kalpana Rs 15,000. | |
16 | Paid cash to Amit & Co. Rs 9,500 who allowed us discount Rs 100. | |
19 | Goods distributed as free samples of Rs 1,500. | |
21 | Received Cash from Kalpana Rs 4,800 on account and allowed her cash discount Rs 200. | |
24 | Returned goods of Rs 750 to Amit & Co. | |
26 | Purchased shares of Rs 15,000 of HDFC Bank. | |
29 | Received goods returned by Kalpana Rs 200. | |
30 | Rent paid by cheque Rs 7,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
June 2011 | |||||
1 | Cash A/c | Dr. | 1,20,000 | ||
Stock A/c | Dr. | 60,000 | |||
Furniture A/c | Dr. | 65,000 | |||
To Capital A/c | 2,45,000 | ||||
(Commenced with cash, goods and furniture) | |||||
3 | Bank A/c | Dr. | 75,000 | ||
To Cash A/c | 75,000 | ||||
(Cash deposited in Bank of Baroda) | |||||
5 | Purchases A/c | Dr. | 35,000 | ||
To Cash A/c | 35,000 | ||||
(Cash purchases made) | |||||
9 | Cash A/c | Dr. | 55,000 | ||
To Sales A/c | 55,000 | ||||
(Goods sold for cash ) | |||||
10 | Purchases A/c [20,000 – 400] | Dr. | 19,600 | ||
To Amit & Co. | 19,600 | ||||
(Goods purchased worth Rs 20,000 at a trade discount of 2%) | |||||
14 | Kalpana | Dr. | 15,000 | ||
To Sales A/c | 15,000 | ||||
(Credit sales to Kalpana) | |||||
16 | Amit& Co. | Dr. | 9,600 | ||
To Cash A/c | 9,500 | ||||
To Discount Received A/c | 100 | ||||
(Cash paid to Amit & Co. and discount received) | |||||
19 | Advertisem*nt A/c | Dr. | 1,500 | ||
To Purchases A/c | 1,500 | ||||
(Goods distributed as Free Samples) | |||||
21 | Cash A/c | Dr. | 4,800 | ||
Discount Allowed A/c | Dr. | 200 | |||
To Kalpana | 5,000 | ||||
(Cash received and Discount Allowed) | |||||
24 | Amit & Co. | Dr. | 735* | ||
To Purchases Return A/c | 735* | ||||
(Goods returned to Amit & Co.) | |||||
26 | Investment in Shares A/c | Dr. | 15,000 | ||
To Cash A/c | 15,000 | ||||
(Purchase of shares of HDFC Bank) | |||||
29 | Sales Return A/c | Dr. | 200 | ||
To Kalpana | 200 | ||||
(Goods returned by Kalpana) | |||||
30 | Rent A/c | Dr. | 7,000 | ||
To Bank A/c | 7,000 | ||||
(Rent paid through cheque) | |||||
*Goods returned toAmit of value Rs 750 will be recorded at a discount of 2% which was allowed as trade discount i.e.at Rs735 [750- 15(2% of 750)].
Page No 93:
Question 4:
Journalise the following transactions in the books of Mr. Bipin.
2011 July | 1 | Started business with Cash Rs 3,25,000 Goods worth Rs 50,000 and Laptop Rs 45, 000. |
3 | Deposited in Dena Bank Rs 1,50,000. | |
7 | Bought goods on credit from Manish Rs 10,000 at 10% Trade discount. | |
11 | Sold goods to Nitin of Rs 12,000 at 5% Trade Discount. | |
13 | Goods worth Rs 900 burnt by fire. | |
17 | Received cash of Rs 11,200 from Nitin in full settlement of his account. | |
20 | Drew from bank Rs 4,000 for his personal purpose. | |
23 | Paid cash Rs 9,300 to Manish in full settlement of his account. | |
25 | Paid house rent Rs 2,500. | |
28 | Sold goods worth Rs 12,000 to Dinesh who paid us Rs 8,000 on account. | |
31 | Wages paid Rs 6,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
July 2011 | |||||
1 | Cash A/c | Dr. | 3,25,000 | ||
Stock A/c | Dr. | 50,000 | |||
Laptop A/c | Dr. | 45,000 | |||
To Capital A/c | 4,20,000 | ||||
(Commenced with cash, goods and furniture) | |||||
3 | Bank A/c | Dr. | 1,50,000 | ||
To Cash A/c | 1,50,000 | ||||
(Cash deposited into Dena Bank) | |||||
7 | Purchases A/c (10,000-1,000) | Dr. | 9,000 | ||
To Manish | 9,000 | ||||
(Goods purchased worth Rs 10,000 at a trade discount of 10%) | |||||
11 | Nitin (12,000 – 600) | Dr. | 11,400 | ||
To Sales A/c | 11,400 | ||||
(Goods sold to Nitin worth Rs 12,000 at a trade discount of 5%) | |||||
13 | Loss by Fire A/c | Dr. | 900 | ||
To Purchases A/c | 900 | ||||
(Goods burnt by fire) | |||||
17 | Cash A/c | Dr. | 11,200 | ||
Discount Allowed A/c | Dr. | 200 | |||
To Nitin | 11,400 | ||||
(Cash received and Discount Allowed) | |||||
20 | Drawings A/c | Dr. | 4,000 | ||
To Bank A/c | 4,000 | ||||
(Amount withdrawn from bank for personal use) | |||||
23 | Manish A/c | Dr. | 9,000* | ||
To Cash A/c | 8,700 | ||||
To Discount Received A/c | 300 | ||||
(Cash paid to Manish in full settlement of his account) | |||||
25 | Drawings A/c | Dr. | 2,500 | ||
To Cash A/c | 2,500 | ||||
(House rent paid) | |||||
28 | Bank A/c | Dr. | 8,000 | ||
Dinesh | Dr. | 4,000 | |||
To Sales A/c | 12,000 | ||||
(Goods sold to Dinesh and received Rs 8,000 on account) | |||||
31 | Wages A/c | Dr. | 6,000 | ||
To Cash A/c | 6,000 | ||||
(Wages paid) | |||||
*As per the book this entry is incorrect, Rs 9,300 cannot be paid to be Manish because he is the creditor of the business with Rs 9,000. Therefore, as per our concern Rs 8,700 should be paid to Manish in full settlement of his account. Hence, the entry has been passed according to it.
Page No 93:
Question 5:
Journalise the following transactions.
2011 Aug. | 1 | Shri Akshay started his business with Cash Rs 90,000, Building Rs 1,50,000 borrowed from friend Jayesh Rs 40,000. |
3 | Paid cash into Bank of Maharashtra Rs 80,000. | |
6 | Purchased furniture from Mohan and issued him a cheque Rs 10,000. | |
9 | Credit purchase from Sohan Rs 20,000 less 5% Trade Discount. | |
10 | Returned goods to Sohan Rs 200. | |
13 | Credit sales to Amit Rs 6,000 less 2% Trade Discount. | |
15 | Amit returned goods of Rs 588. | |
17 | Goods taken by Akshay for his personal use Rs 500. | |
18 | Paid postage Rs 200 and Electricity bill Rs 900. | |
20 | Sent a Telegram of Rs 30 to Sohan to supply goods of Rs 9,000 immediately. | |
21 | Purchased Laptop & Printer of Rs 41,000 from Keshav & Co. and paid him cash Rs 21,000 | |
27 | Paid insurance premium on life of Akshay of Rs 4,000. | |
29 | Paid Telephone Deposit for new telephone connection by cheque Rs 4,000. | |
31 | Audit fees paid by cheque Rs 4,500. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
Aug 2011 | |||||
1 | Cash A/c | Dr. | 90,000 | ||
Building A/c | Dr. | 1,50,000 | |||
To Jayesh | 40,000 | ||||
To Capital A/c | 2,00,000 | ||||
(Business commenced with cash, building and loan from Jayesh) | |||||
3 | Bank A/c | Dr. | 80,000 | ||
To Cash A/c | 80,000 | ||||
(Cash deposited into Bank of Maharashtra) | |||||
6 | Furniture A/c | Dr. | 10,000 | ||
To Bank A/c | 10,000 | ||||
(Furniture purchased through issue of cheque) | |||||
9 | Purchases A/c [20,000 – 1,000] | Dr. | 19,000 | ||
To Sohan | 19,000 | ||||
(Purchases made on credit at a trade discount of 5%) | |||||
10 | Sohan A/c [200 – 10] | Dr. | 190* | ||
To Purchases Returns A/c | 190* | ||||
(Goods returned) | |||||
13 | Amit [6,000 – 120] | Dr. | 5,880 | ||
To Sales A/c | 5,880 | ||||
(Sold goods to Amit on credit, at trade discount of 2%) | |||||
15 | Sales Returns A/c | Dr. | 588 | ||
To Amit | 588 | ||||
(Goods returned by Amit) | |||||
17 | Drawings A/c | Dr. | 500 | ||
To Purchases A/c | 500 | ||||
(Goods withdrawn for personal use) | |||||
18 | Postage A/c | Dr. | 200 | ||
Electricity A/c | Dr. | 900 | |||
To Cash A/c | 1,100 | ||||
(Payment of postage and electricity bill) | |||||
20 | Telegram Expenses A/c | Dr. | 30 | ||
To Cash A/c | 30 | ||||
(Telegram expenses incurred) | |||||
20 | Purchases A/c | Dr. | 9,000 | ||
To Sohan | 9,000 | ||||
(Goods purchased from Sohan) | |||||
21 | Laptop & Printer A/c | Dr. | 41,000 | ||
To Cash A/c | 21,000 | ||||
To Keshav & co. | 20,000 | ||||
(Laptop & printer purchased from Keshav & Co. and Rs 21,000 paid in cash) | |||||
27 | Drawings A/c | Dr. | 4,000 | ||
To Cash A/c | 4,000 | ||||
(Insurance Premium on life of proprietor paid) | |||||
29 | Telephone Deposit A/c | Dr. | 4,000 | ||
To Bank A/c | 4,000 | ||||
(Deposits made for new telephone connection) | |||||
31 | Audit Fees A/c | Dr. | 4,500 | ||
To Bank A/c | 4,500 | ||||
(Paid audit fees) | |||||
*Goods returned to Sohan of value Rs 200 will be recorded at a discount of 2% which was allowed as trade discount i.e. at Rs 190 [200-10(5% of 200)]
Page No 93:
Question 6:
Journalise the following transactions in the books of Mr. Arun.
2010 Sept. | 1 | Commenced business with Cash 75,000 and Goods Rs 20,000 and Furniture Rs 30,000. |
2 | Opened a current account in Bank of India by depositing Rs 50,000. | |
5 | Purchased stationery of Rs 200. | |
6 | Goods purchased from Nisha Rs 15,000. | |
9 | Gave a cheque for Rs 15,000 to Nisha. | |
11 | Sold goods to Minakshi of Rs 20,000. | |
14 | Received a cheque for Rs 19,500 from our debtor. Minakshi in full settlement of her account. | |
16 | Gave loan to Sanjay by cheque Rs 10,000 at 12% interest p.a. | |
19 | Bought Laptop of Rs 36,000 in exchange of goods from Pande & Co. Goods of Rs 40,000 were given at 10% Trade Discount. | |
22 | Purchased Printer of Rs 10,000, paying half the amount in cash from H.P.Ltd. | |
28 | Uninsured goods worth Rs 700 destroyed by fire. | |
29 | Paid office Rent Rs 2,000 to landlord. | |
30 | Paid for Travelling expenses Rs 5,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
Sep. 2010 | |||||
1 | Cash A/c | Dr. | 75,000 | ||
Stock A/c | Dr. | 20,000 | |||
Furniture A/c | Dr. | 30,000 | |||
To Capital A/c | 1,25,000 | ||||
(Commenced business with cash, goods and furniture) | |||||
2 | Bank A/c | Dr. | 50,000 | ||
To Cash A/c | 50,000 | ||||
(Cash deposited into Bank of India) | |||||
5 | Stationery A/c | Dr. | 200 | ||
To Cash A/c | 200 | ||||
(Stationery purchased) | |||||
6 | Purchases A/c | Dr. | 15,000 | ||
To Nisha | 15,000 | ||||
(Purchases from Nisha on credit) | |||||
9 | Nisha | Dr. | 15,000 | ||
To Bank A/c | 15,000 | ||||
(Cheque issued to Nisha) | |||||
11 | Minakshi | Dr. | 20,000 | ||
To Sales A/c | 20,000 | ||||
(Goods sold to Minakshi on credit) | |||||
14 | Bank A/c | Dr. | 19,500 | ||
Discount Allowed A/c | 500 | ||||
To Minakshi | 20,000 | ||||
(Cheque received from Minakshi in full settlement of her account) | |||||
16 | Sanjay’s Loan A/c | Dr. | 10,000 | ||
To Bank A/c | 10,000 | ||||
( Loan given to Sanjay @12% per annum by issue of cheque) | |||||
19 | Laptop A/c | Dr. | 36,000 | ||
To Purchases Return A/c | 36,000 | ||||
(Laptop purchased worth Rs 36,000 in exchange of goods worth Rs 40,000 at a trade discount of 10%) | |||||
22 | Printer A/c | Dr. | 10,000 | ||
To Cash A/c | 5,000 | ||||
To H.P. Ltd. | 5,000 | ||||
(Printer purchased from H.P. Ltd. and half of the amount paid in cash) | |||||
28 | Loss by fire A/c | Dr. | 700 | ||
To Purchase A/c | 700 | ||||
(Goods lost by fire) | |||||
29 | Rent A/c | Dr. | 2,000 | ||
To Cash A/c | 2,000 | ||||
(Rent paid) | |||||
30 | Travelling Expenses A/c | Dr. | 5,000 | ||
To Cash A/c | 5,000 | ||||
(Travelling Expenses paid) | |||||
Page No 94:
Question 7:
Journalise the following transactions in the books of Mr. Sancheti.
2011 Oct. | 1 | Mr. Sancheti received Rs 50,000 from his uncle as a gift and deposited the same into the account of business Bank of India A/c. |
3 | Purchased goods of Rs 15,000 from Mahesh. | |
5 | Sold goods on credit to Suman for Rs 18,000. | |
7 | Goods of Rs 600 being defective returned by Suman. | |
11 | Remitted cash to Mahesh Rs 14,800 and received discount Rs 200. | |
15 | Bought machinery from KK & Co. Rs 30,000 and half the amount paid immediately. | |
17 | Paid for repairs to Machinery Rs 400. | |
20 | Purchased a horse for Rs 4,800 and carriage charges Rs 200 paid. | |
25 | Withdrawn from bank Rs 5,000 for personal use. | |
27 | Amount due from Girish Rs 900 is proved to be irrecoverable and has to be written off as bad. | |
29 | Paid for sales vouchers Rs 1,100. | |
31 | Paid Insurance Premium Rs 6,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
Oct 2011 | |||||
1 | Bank A/c | Dr. | 50,000 | ||
To Capital A/c | 50,000 | ||||
(Amount in business) | |||||
3 | Purchases A/c | Dr. | 15,000 | ||
To Mahesh | 15,000 | ||||
(Goods purchased from Mahesh on credit) | |||||
5 | Suman | Dr. | 18,000 | ||
To Sales A/c | 18,000 | ||||
(Goods sold on credit to Suman) | |||||
7 | Sales Return A/c | Dr. | 600 | ||
To Suman A/ | 600 | ||||
(Goods returned by Suman) | |||||
11 | Mahesh | Dr. | 15,000 | ||
To Cash A/c | 14,800 | ||||
To Discount Received A/c | 200 | ||||
(Cash remitted to Mahesh and discount received) | |||||
15 | Machinery A/c | Dr. | 30,000 | ||
To Cash A/c | 15,000 | ||||
To KK & Co. | 15,000 | ||||
(Machinery purchased from KK & Co. and half of the amount paid in cash) | |||||
17 | Repairs to Machinery A/c | Dr. | 400 | ||
To Cash A/c | 400 | ||||
(Repairs made to Machinery) | |||||
20 | Horse A/c | Dr. | 4,800 | ||
Carriage A/c | Dr. | 200 | |||
To Cash A/c | 5,000 | ||||
(Horse purchased and carriage paid) | |||||
25 | Drawings A/c | Dr. | 5,000 | ||
To Bank A/c | 5,000 | ||||
(Amount withdrawn from Bank from personal use) | |||||
27 | Bad Debts A/c | Dr. | 900 | ||
To Girish | 900 | ||||
(Amount due from Girish is found irrecoverable) | |||||
29 | Purchases A/c | Dr. | 1,100 | ||
To Cash A/c | 1,100 | ||||
(Amount paid for Sales Voucher) | |||||
31 | Insurance Premium A/c | Dr. | 6,000 | ||
To Cash A/c | 6,000 | ||||
(Insurance Premium paid) | |||||
Page No 94:
Question 8:
Enter the following transactions in the books of Mr. Smart.
2011 Nov. | 1 | Bought goods of Rs 20,000 from Sunita at 5% T.D. |
4 | Sold half the goods purchased from Sunita to Vrijaya at 20% profit on cost. | |
6 | Purchased machinery for cash Rs 25, 000 and paid Rs 1,100 wages for the installation of Machinery. | |
8 | Paid for Traveling Expenses Rs 500. | |
12 | Mr. Smart paid Rs 11,000 to Somaya Collage for his sons’ fees. | |
14 | Placed an order for goods Rs 7,000 to Veeru. | |
16 | Paid to Sunita Rs 15,000 on account | |
19 | Veeru executed the order which was placed on 14th Nov. | |
22 | Paid wages Rs 600. | |
25 | Paid for proprietor’s house rent Rs 2,000. | |
28 | Sold remaining half of the goods purchased from Sunita to Shashi at 25% profits on cost. | |
31 | Shashi becomes insolvent and could pay only 50 paise in rupee. | |
29 | Taxes paid in cash Rs 4,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
Nov 2011 | |||||
1 | Purchases A/c [20,000 – 1,000] | Dr. | 19,000 | ||
To Sunita | 19,000 | ||||
(Goods purchased from Sunita at trade discount of 5%) | |||||
4 | Vrijaya [(19,000/2) + 20% Profit] | Dr. | 11,400 | ||
To Sales A/c | 11,400 | ||||
(Goods sold to Vrijaya at a profit of 20% on cost) | |||||
6 | Machinery A/c (25,000+1,100) | Dr. | 26,100 | ||
To Cash A/c | 26,100 | ||||
(Machinery purchased and Wages paid) | |||||
8 | Travelling Expenses A/c | Dr. | 500 | ||
To Cash A/c | 500 | ||||
(Amount paid for travelling expenses) | |||||
12 | Drawings A/c | Dr. | 11,000 | ||
To Cash A/c | 11,000 | ||||
(Amount paid for son’s fees) | |||||
14 | ------No Entry----------* | ||||
16 | Sunita | Dr. | 15,000 | ||
To Bank A/c | 15,000 | ||||
(Amount paid to Sunita) | |||||
19 | Purchases A/c | Dr. | 7,000 | ||
To Veeru | 7,000 | ||||
(Goods purchased from Veeru) | |||||
22 | Wages A/c | Dr. | 600 | ||
To Cash A/c | 6000 | ||||
( Paid wages) | |||||
25 | Drawings A/c | Dr. | 2,000 | ||
To Cash A/c | 2,000 | ||||
(Amount paid for Proprietor’s house rent) | |||||
28 | Shashi [(19,000/2) + 25% Profit] | Dr. | 11,875 | ||
To Sales A/c | 11,875 | ||||
(Goods sold to Shashi at a profit of 25% on cost) | |||||
31 | Bank A/c | Dr. | 5,937.50 | ||
Bad Debts A/c | Dr. | 5,937.50 | |||
To Shashi | 11,875 | ||||
(Shashi becomes insolvent and 50 paise in a rupee recovered) | |||||
29 | Tax A/c | Dr. | 4,000 | ||
To Cash | 4,000 | ||||
(Tax paid in cash) | |||||
*Mere placing an order for supplying of goods is not a transaction, hence, no entry has been passed.
Page No 94:
Question 9:
Journalise the following transactions in the books of Nana.
Debit balances on 1st April 2012:-
Cash in hand Rs 5,000; Cash at Bank Rs 95,000' Land & Building Rs 2,10,000; Furniture Rs 15,000; Debtors Rs 10,000.
Credit Balances on April 1, 2012:- Creditors Rs 10,000; Bank Loan Rs 28,000.
Transactions during the month of April 2012:-
2012 April | 1 | Purchased goods worth Rs 30,000 for cash less Trade Discount. |
3 | Sold goods to Meena Rs 25,000. | |
7 | Purchased goods from Seema worth Rs 12,000. | |
9 | Goods costing Rs 1,100 distributed as free samples. | |
12 | Received an amount of Rs 1,500 from Vikram which was previously written off as bad. | |
14 | Purchased goods from Bhushan Rs 30,000 at 10% Trade Discount and paid him 1/3rd amount in cash after getting 5% cash discount. | |
20 | Received cash gift Rs 10,000 from Father-in-law with which purchased shares of Infosis Co. | |
24 | Payment of Bank loan with interest Rs 6,000 [Interest amount Rs 1,500] | |
28 | Sold goods to Anil Rs 50,000 at 10% trade discount and received half the amount in cash, 5% cash discount allowed. | |
29 | Paid for Advertisem*nt Rs 5,000. | |
30 | Withdrew cash Bank for personal purpose Rs 2,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
April 2012 | |||||
1 | Cash in Hand A/c | Dr. | 5,000 | ||
Cash at Bank A/c | Dr. | 95,000 | |||
Land and Building A/c | Dr. | 2,10,000 | |||
Furniture A/c | Dr. | 15,000 | |||
Debtors A/c | Dr. | 10,000 | |||
To Creditors A/c | 10,000 | ||||
To Bank Loan A/c | 28,000 | ||||
To Capital A/c | 2,97,000 | ||||
(Balances brought forward from last year) | |||||
1 | Purchases A/c (30,000-1,500) | Dr. | 28,500 | ||
To Cash A/c | 28,500 | ||||
(Goods purchased@5% trade discount ) | |||||
3 | Meena | Dr. | 25,000 | ||
To Sales A/c | 25,000 | ||||
( Goods sold to Meena on credit) | |||||
7 | Purchases A/c | Dr. | 12,000 | ||
To Seema | 12,000 | ||||
(Goods purchased from Seema on credit) | |||||
9 | Advertisem*nt A/c | Dr. | 1,100 | ||
To Purchases A/c | 1,100 | ||||
(Goods distributed as Free Samples) | |||||
12 | Cash A/c | Dr. | 1,500 | ||
To Bad Debts Recovered A/c | 1,500 | ||||
(Bad debts recovered) | |||||
14 | Purchases A/c [30,000 – 3,000] | Dr. | 27,000 | ||
To Cash A/c [9,000 – 450] | 8,550 | ||||
To Bhushan | 18,000 | ||||
To Discount Received A/c (9,000 × 5%) | 450 | ||||
(Goods purchased from Bhushan for Rs 30,000 at trade discount of 10% and paid 1/3 amount in Cash after getting 5% cash discount) | |||||
20 | Cash in Hand A/c | Dr. | 10,000 | ||
To Capital A/c | 10,000 | ||||
(Gift received from father in law) | |||||
Investment in Shares of Infosis Co. | Dr. | 10,000 | |||
To Cash A/c | 10,000 | ||||
(Amount invested in in shares of Infosis Co.) | |||||
24 | Bank Loan A/c | Dr. | 4,500 | ||
Interest A/c | Dr. | 1,500 | |||
To Cash A/c | 6,000 | ||||
(Paid Bank Loan along with interest on such loan) | |||||
28 | Bank A/c [22,500 - 1,125] | Dr. | 21,375 | ||
Anil [45,000/2] | Dr. | 22,500 | |||
Discount Allowed A/c [22,500 – 5% of 22,500] | Dr. | 1,125 | |||
To Sales A/c [50,000 – 10% Discount] | 45,000 | ||||
(Goods sold to Anil at trade discount of 10% and received half amount in cash at 5% cash discount) | |||||
29 | Advertisem*nt A/c | Dr. | 5,000 | ||
To Cash A/c | 5,000 | ||||
(Paid for Advertisem*nt) | |||||
30 | Drawings A/c | Dr. | 2,000 | ||
To Bank A/c | 2,000 | ||||
(Amount withdrawn from bank for personal use) | |||||
Page No 95:
Question 10:
Record the following transactions in the books Chitmani & Company for the month April, 2010.
Balance on 1st April 2010.
Cash in hand Rs 21,000; Cash at bank Rs 3,00,000. Furniture Rs 1,00,000; Laptop & Printer Rs 90,000; Debtors Chetan- Rs 7,000, Dilip- Rs 9,000, Stock Rs 25,000, Creditors Gauri- Rs 6,000, Hema- Rs 8,000, Bank Loan Rs 30,000.
Transactions during the month of April were as follows:-
2010 April | 1 | Purchased goods of the list price Rs 30,000 at 10% Trade Discount on credit from Mr. Kavare. |
3 | Received Rs 8,800 cash from Mr. Dilip in full & Final settlement of his account. | |
5 | Rent paid to landlord Rs 5,000. | |
7 | Sold goods to Mr. Eknath on credit Rs 15,000. | |
9 | Goods costing Rs 250 distributed as free samples. | |
12 | cash withdrawn by proprietor for private purpose Rs 5,000. | |
15 | Mr. Eknath pays Rs 14,250 after getting 5% discount for prompt payment. | |
20 | Interest on Bank loan Rs 1,000 debited to the current account of the proprietor. | |
23 | Paid Rs 7,900 to Mrs. Hema in full & final settlement of her account. | |
25 | Cash Purchases at list price Rs 10,000 Trade Discount allowed Rs 500. | |
28 | Purchased Maruti Van for Business Rs 1,75,000, amount paid by cheque. | |
30 | Commission paid by cheque Rs 7,000. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
April 2010 | |||||
1 | Cash in Hand A/c | Dr. | 21,000 | ||
Cash at Bank A/c | Dr. | 3,00,000 | |||
Furniture A/c | Dr. | 1,00,000 | |||
Laptop and Printer A/c | Dr. | 90,000 | |||
Chetan | Dr. | 7,000 | |||
Dilip | Dr. | 9,000 | |||
Stock A/c | Dr. | 25,000 | |||
To Gauri | 6,000 | ||||
To Hema | 8,000 | ||||
To Bank Loan A/c | 30,000 | ||||
To Capital A/c | 5,08,000 | ||||
(Balances brought forward from last year) | |||||
1 | Purchases A/c [30,000 – 3,000] | Dr. | 27,000 | ||
To Mr. Kavare | 27,000 | ||||
(Goods purchased fromMr. Kavare on Credit at Trade Discount of 10%) | |||||
3 | CashA/c | Dr. | 8,800 | ||
Discount Allowed A/c | Dr. | 200 | |||
To Dilip | 9,000 | ||||
(Amount received in full and final settlement from Dilip) | |||||
5 | Rent A/c | Dr. | 5,000 | ||
To Cash A/c | 5,000 | ||||
(Rent paid to land lord) | |||||
7 | Eknath | Dr. | 15,000 | ||
To Sales A/c | 15,000 | ||||
(Goods sold to Eknath on credit) | |||||
9 | Advertisem*nt A/c | Dr. | 250 | ||
To Purchases A/c | 250 | ||||
(Goods distributed as Free Samples) | |||||
12 | Drawings A/c | Dr. | 5,000 | ||
To Cash A/c | 5,000 | ||||
(Cash withdrawn for personal use) | |||||
15 | Cash A/c | Dr. | 14,250 | ||
Discount allowed A/c | 750 | ||||
To Eknath | 15,000 | ||||
(Cash received from Mr. Eknath after getting 5% discount) | |||||
20 | Proprietor’s Current A/c | 1,000 | |||
To Interest on Loan A/c | 1,000 | ||||
(Interest on loan debited to current account of proprietor) | |||||
23 | Hema | Dr. | 8,000 | ||
To Bank A/c | 7,900 | ||||
To Discount Received A/c | 100 | ||||
(Amount paid to Hema in full and final settlement of her account) | |||||
25 | Purchases A/c (10,000-500) | Dr. | 9,500 | ||
To Cash A/c | 9,500 | ||||
(Cash purchases) | |||||
28 | Maruti Van A/c | Dr. | 1,75,000 | ||
To Bank A/c | 1,75,000 | ||||
(Maruti Van Purchased, amount paid through cheque) | |||||
30 | Commission A/c | Dr. | 7,000 | ||
To Bank A/c | 7,000 | ||||
(Commission paid through cheque) | |||||
Page No 95:
Question 11:
Journalise the following transaction in the books of Sethi and Brothers for the month of April, 2012.
Balance on 1st April 2012
Cash at Bank Rs 2,00,000, Cash in hand Rs 2,500; Computer & Printer Rs 90,000 Land & Building Rs 1,80,000; Sundry Debtors Rs 15,000; Bills Receivable Rs 10,000; Sundry Creditors Rs 14,000; Bills Payable Rs 5,000.
Transactions during the month of April were as follows:-
2012 April | 1 | Purchased goods from Meeta worth Rs 40,000 at 10% trade discount and paid 1/4 amount in cash and 1/4 amount by cheque, for which 5% cash discount is allowed. |
4 | Purchased shares of Reliance Company Rs 12,000 and 200 paid as brokerage. | |
7 | Sold goods to Sunil worth Rs 60,000 at 10% Trade Discount and 5% Cash Discount received 1/3 amount in cash and 1/3 amount by cheque and 5% cash discount is allowed. | |
11 | Paid Telephone Bill of Proprietor’s house Rs 700. | |
14 | Paid House Rent Rs 1,500. | |
20 | Received goods as free samples Rs 2,000. | |
23 | Purchased Furniture Rs 30,000. | |
23 | Paid carriage Rs 300 on the above furniture. | |
25 | Goods worth Rs 6,000 were destroyed by fire and Insurance company admitted a claim to the extent of Rs 4,000. | |
27 | Paid income tax Rs 6,000. | |
28 | Paid for printing and stationery Rs 2,000. | |
29 | Transferred Rs 20,000 from private bank of proprietor to business Bank of Maharashtra A/c. | |
30 | Salaries paid Rs 5,000 in cash and Rs 10,000 by cheque. |
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
April 2012 | |||||
1 | Cash in Hand A/c | Dr. | 2,500 | ||
Cash at Bank A/c | Dr. | 2,00,000 | |||
Computer and Printer A/c | Dr. | 90,000 | |||
Land and Building A/c | Dr. | 1,80,000 | |||
Sundry Debtors A/c | Dr. | 15,000 | |||
Bills Receivables A/c | Dr. | 10,000 | |||
To Sundry Creditors A/c | 14,000 | ||||
To Bills Payables A/c | 5,000 | ||||
To Capital A/c | 4,78,500 | ||||
(Balances brought forward from last year) | |||||
1 | Purchases A/c [40,000 – 4,000] | Dr. | 36,000 | ||
To Cash A/c | 8,550 | ||||
To Bank A/c | 8,550 | ||||
To Meeta | 18,000 | ||||
To Discount Received A/c | 900 | ||||
(Goods purchased at a trade discount of 10%; ¼ in cash and ¼ by cheque at a cash discount of 5%) | |||||
4 | Investment in Shares of Reliance Company A/c | Dr. | 12,000 | ||
Brokerage A/c | Dr. | 200 | |||
To Cash A/c | 12,200 | ||||
(Purchase of shares of Reliance) | |||||
7 | Sunil | Dr. | 18,000 | ||
Cash A/c | Dr. | 17,100 | |||
Bank A/c | Dr. | 17,100 | |||
Discount Allowed A/c | Dr. | 1,800 | |||
To Sales A/c [60,000 – 6,000] | 54,000 | ||||
(Goods sold to Sunil at 10% trade discount and 5% cash discount on receipt of 1/3 in cash and 1/3 by cheque) | |||||
11 | Drawings A/c | Dr. | 700 | ||
To Cash in hand A/c | 700 | ||||
(Telephone expenses of proprietor’s house paid) | |||||
14 | Drawings A/c | Dr. | 1,500 | ||
To Cash in hand A/c | 1,500 | ||||
(Paid house rent) | |||||
20 | Purchases A/c | Dr. | 2,000 | ||
To Free Sample A/c | 2,000 | ||||
(Goods received as free samples) | |||||
23 | Furniture A/c | Dr. | 30,000 | ||
Carriage A/c | Dr. | 300 | |||
To Cash A/c | 30,300 | ||||
(Furniture purchased and carriage paid) | |||||
25 | Loss by Fire A/c | Dr. | 2,000 | ||
Insurance Co. A/c | Dr. | 4,000 | |||
To Purchases A/c | 6,000 | ||||
(Goods lost by fire worth Rs 6,000 and claim received for Rs 4,000) | |||||
27 | DrawingsA/c | Dr. | 6,000 | ||
To Cash A/c | 6,000 | ||||
(Income Tax paid) | |||||
28 | Printing and Stationery A/c | Dr. | 2,000 | ||
To Cash A/c | 2,000 | ||||
(Paid for Printing and Stationery) | |||||
29 | Bank A/c | Dr. | 20,000 | ||
To Capital A/c | 20,000 | ||||
(Additional capital introduced) | |||||
30 | Salaries A/c | Dr. | 15,000 | ||
To Cash A/c | 5,000 | ||||
To Bank A/c | 10,000 | ||||
(Salaries paid) | |||||
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