NCERT Solutions for Class 11 Accountancy Chapter 3 - Recording of Business Transactions-I

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Short Answer Type Questions

1. State the three fundamental steps in the acounting process.

Ans. The three fundamental steps in the accounting process:

(i) Identification of financial transactions events: Accounting records only those transaction and events which can be measured in terms of money.

(ii) Measuring the identified transactions: Financial transactions and events measured in terms of money are recorded in the books of account.

(iii) Recording: Accounting is an art of recording business transaction in the book of account.

2. Why is the evidence provided by source documents important to accounting?

Ans. Source document is an evidence of transaction or event having taken place. It is of prime importance in accounting because accounting is based on financial information i.e., evidence.

3. Should a transaction be first recorded in a journal or ledger ?

Ans. A transaction should be recorded in journal because journal is a book of primary entry in which transaction are recorded in a chronological order.

4. Are debits or credits listed first in journal entries? Are debits or credits indented ?

Ans. Debit listed first in journal entries, credits indented in the journal entries, it means the account title to be credited is written on the second line leaving sufficient margin on the left side with a word “To”.

5. Why are some accounting systems called double accounting system ?

Ans. Double accounting system refers to a system of accounting which recognize and records both aspects of a transaction.

It is based on the principle of “Duel Aspect” which states that every transaction has two aspects: a Debit and a Credit of equal amount.

6. Give a specimen of an account.
Ans. Account contains the following items as under:

Date -Particular - Journal folio

Amount on Debit side - Amount on Credit side

7. Why are the rules of debit and credit same for both liability and capital?

Ans. Every business acquires funds from internal as well as from external sources. According to the business entity concept, the amount borrowed from the external sources together with the internal sources like, capital invested by the proprietor, is termed as liability to the business. Business entity concept treats
business and business owner separately. Capital of the owner is treated as liability to the business because the business has to repay the amount of capital to the owner, in case of closure of the business. As liability incurred is credited, in the same way, fresh capital introduced and net profit increase the owner's capital, and so, capital is credited. On the other hand, if liability is paid, it reduces liability and so, it is debited.

Similarly, drawings from capital and net loss reduce the capital, and so, capital is debited. Thus the rules of debit and credit are same for both liability and capital.

8. What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts.

Ans. Journal folio column records the page number of journal on Subsidiary book from which that particular entry is transferred is entered.

9. What entry (debit or credit) would you make to:

(a) Increase in revenue

Ans. Credit

(b) Decrease in expense

Ans. Credit

(c) Record Drawings

Ans. Debit

(d) Record the fresh capital introduced by the owner

Ans. Credit

10. If a transaction has the effect of decreasing an assets is the decrease recorded as a debit or as a credit?

If the transaction has the effect of decreasing a liability the decrease recorded as a debit or as a credit?

Ans. When a transaction has the effects of decreasing an assets the decrease is recorded in the credit side by following the rule: Increase in assets are debit; decrease are credit. Similarly if the transaction has the effects of decreasing a liability then the decrease is recorded in the debit side by following the rule; increase in liability are credit, decrease are debit.

Long Answer Type Question

11. Describe the events recorded in accounting system and the importance of source documents in those system?

Ans. Every business requires an accounting system to record all its monetary transactions in a company’s accounting system. For example, the purchase of goods, salaries paid to employees, payments deposited and borrowed from the bank or other financial institution.

A company needs an accounting system to record all its monetary transactions. The events that are recorded in a company’s accounting system are the purchase of goods, salaries paid to employees, payments deposited and borrowed from the bank or other financial institutions, invoice bills, etc. All such events are recorded systematically in the accounting systems of a company. Source documents are very important and have the following advantages:

It is evidence of transaction that has taken place.It ensures that the transaction is in accordance with the legal regulations. The company uses source documents during the auditing process.

12. Describe how debits and credits are used to analyse transaction.

Ans. Debit originated from the Italian word debito, which in turn is derived from the Latin word debeo, which means ‘owed to proprietor’ and Credit comes from the Italian word credito, which is derived from the Latin word credo, which means belief, i.e., ‘owed by proprietor’.

According to the dual aspect concept, all the business transactions that are recorded in the books of accounts, have two aspects- debit and credit. The dual aspect can be better understood with the help of an example; bought goods worth `500 for cash. This transaction affects two accounts with the same amount simultaneously. As goods are brought in exchange of cash, so the cash balances in the business reduce by ₹500, i.e. why the Cash account is credited. Simultaneously, the amount of goods increases by ₹500, so Purchases account will be debited. Debit and credit depend on the nature of accounts involved; such as assets, expenses, income, liabilities and capital. There are five types of accounts.

Assets: These include all properties or legal rights owned by a firm for its operations, such as cash in hand, plant and machinery, bank, land, building, etc. All assets have debit balance. If assets increase, they are debited and if assets decrease, they are credited. For example, furniture purchased and payment made by cheque. The journal entry is:

Furniture A/c	Dr.
To Bank A/c

Here, furniture and bank balance, both are assets to the firm. As furniture is purchased, so Furniture account will increase, and will be debited. On the other hand, payment of furniture is being made by cheque that reduces the bank balance of the business, so Bank account will be credited.

Expense: It is made to run business smoothly and to carry day to day business activities. All expenses have debit balance. If an expense is incurred, it must be debited. For example, rent paid. The journal entry is:

Rent A/c	Dr.
To Cash A/c

Here, rent is an income; hence, Rent account has been credited and Cash account has been debited, as rent received increases the cash balances.

Capital: Capital is the amount invested by the proprietor in the business. Capital has credit balance. Increase in capital is credited and decrease in capital is debited.

13. Describe how accou ts are used to record information about the effects of transactions ?

Ans. Every transaction is recorded in the original book of entry (journal) in order of their occurrence however, if we want to know that how must we receives from our debtors or how much to pay to the creditors, if is not possible to determine at a single movement. Hence, we prepare accounts to know the position of business activities in the mean time.

There are some steps to record transactions in accounts, it can be easily be understood, with the help of an example.

Sold goods to Mr. Ashish worth ₹50,000 on 12th April and received payment ₹30,000 on 30th April. The following journal entries will be recorded:

Date	Particulars		L. F.	Amount Dr. (₹)	Amount Cr.(₹)
April 12	Ashish A/c	Dr.		50,000
	To Sales A/c				50,000
	(Being goods sold on credit to Mr. Ashish)
April 30	Cash A/c	Dr.		30,000
	To Ashish A/c				30,000
	(Being cash received from Mr. Ashish)

Step 1 : Locate the account in ledger i.e., Mr. Ashish Account.

Step 2 : Enter the date of transaction in the date column of the debit side of Mr. Ashish Account.

Step 3 : In the ‘particular column of the debit side of Mr. Ashish Account the name of corresponding account is to be written i.e., ‘sales’.

Step 4 : Enter the page number of the ledger in the journal folio column of Mr. Ashish Account.

Step 5 : Entry the amount in the Amount column.

Step 6 : Some steps are to be followed to part entries in the credit side of Mr. Ashish Account.

Step 7: After entering all the transactions for a particular period balance the account by totalling both sides and write the difference in shorter side as ‘Balance c/d’.

Step 8 : Total of account is to be writted on either sides.

14. What is a Journal? Give a specimen of Journal showing at least five entries.

Ans. Journal is book of original or primary entries in which the business transactions are recorded in chronological order i.e. as and when they take place. A transaction is recorded in the Journal in the form of an entry and process of recording a transactions in a Journal is known as journalising.

Format of a Journal

Date	Particulars	L. F.	Amount Dr. (₹)	Amount Cr. (₹)

(i) Date: Date of transaction is recorded in the order of their occurence.

(ii) Particular: Details of business transactions like, name of the parties involved and the name of related accounts, are recorded.

(iii) L.F.: Page number of ledger account when entry is posted.

(iv) Debit Amount: Amount of debit account is written.

(v) Credit Amount: Amount of credit account is written.

Recording of a Journal Entry

Date	Particulars
01.04.2022	Started business with cash ₹1,00,000
03.04.2022	Opened a bank account ₹20,000
04.04.2022	Purchased goods for cash ₹25,000
05.04.2022	Goods sold for cash ₹30,000
06.05.2022	Goods sold to Mr. X ₹2,000

Book of Mr. A

Date	Particulars		L. F.	Amount Dr. (₹)	Amount Cr. (₹)
2022
April 1	Cash A/c	Dr.		1,00,000
	To Capital A/c				1,00,000
April 3	Bank A/c	Dr.		20,000
	To Cash A/c				20,000
	(Being bank account opened with cash)
April 4	Purchase A/c	Dr.		25,000
	To Cash A/c				25,000
	(Being goods purchased for cash)
April 5	Cash A/c	Dr.		30,000
	To Sales A/c				30,000
	(Being goods sold for cash)
April 6	Mr. X's A/c	Dr.		2,000
	To Sales A/c	2,000
	(Being good sold to Mr. X an credit)
		Total		1,77,000	1,77,000

15. Differentiate between source documents and vouchers.

Ans.

Source document	Voucher
1. Source document is an evidence of transactions or event having taken place.	1. Accounting voucher is a written document containing an analysis of business transaction.
2. It contains complete details of the transactions.	2. It is prepared on the basis of evidence of the transaction i.e. Source document.
3. It is a proof of transactions having taken place.	3. It is an analysis of transaction
4. It is signed by the maker.	4. It is prepared and signed usually by an accountant and countersigned by the authorised signatory.

16. Accounting equation remains intact under all circumstances. Justify the statement with the help of an example.

Ans. According to the dual-aspect concept, every transaction simultaneously, has two effects of equal amount, i.e. debit and credit. However, in any case, the equality of total assets with the total claims of business (sum of capital and liabilities) is not distributed. This equality is algebraically represented as :

Assets = Total Claims

Or

Assets = Liabilities + Capital

or, Liabilities = Assets – Capital

or, Capital = Assets – Liabilities

In any circumstance the above equation cannot be changed. For example,

(i) Business started with cash ₹1,00,000

Cash A/c

To Capital A/c

Dr.

Assets	=	Liabilities	+	Capital
Cash				1,00,000
1,00,000

Assets decrease, as cash is invested into the business and capital increases. Thus the equality between LHS and RHS remains intact.

(ii) Goods purchased on credit ₹20,000

	Assets	=	Liabilities	+	Capital
Cash	Stock		Creditors
1,00,000	20,000	=	20,000	+	100,000

Assets increase as well as liability increases, without disturbing the equality.

(iii) Goods purchased with cash ₹25,000

	Assets	=	Liabilities	+	Capital
Cash	Stock
1,00,000	20,000	=	20,000	+	1,00,000
(25,000)	25,000

As goods are purchased for cash, so cash balance reduces by ₹25,000, but on the other hand, stock balance increases by ₹25,000. Thus the total balance of LHS remains equal to the total claims.

17. Explain the double entry mechanism with an illustrative.

Ans. Double Entry System refers to a system of accounting which recognizes and records both aspects of a transaction.

Double Entry System is based on the Principle of "Dual Aspect", which states that every transaction has two aspects: a Debit and a Credit of equal amount.

In simple words, every debit must have a corresponding credit of equal amount in one or more accounts and vice-versa.

For example, if a firm has purchased machinery for cash, then in this transaction, two accounts will be affected: Machinery and Cash. Under the Double Entry System, both these aspects are recorded: Machinery will be debited and Cash will be credited for the same amount.

If a transaction affects more than two accounts, then the total amount debited must be equal to the total amount credited.

Features of the Double Entry System:

(i) It is a systematic and scientific method of recording financial transactions.

(ii) Every transaction has two-fold effect: the aspect of receiving and the aspect of giving.

(iii) With the help of rules of debit and credit, one aspect is debited and other aspect is credited.

(iv) The total of all debits and all credits must be equal. The arithmetical accuracy can be checked by preparing Trial Balance.

Numerical Questions

18. Prepare accounting equation on the basis of the following:

(a) Harsha started business with cash ₹2,00,000

(b) Purchased goods from Naman for cash ₹40,000

(c) Sold goods to Bhanu costing ₹10,000 for ₹12,000

(d) Bought furniture on credit ₹7,000

Ans.

				Assets	=		Liabilities + Capital
S. No.	Transactions	Cash (₹)	Stock (₹)	Debtor (₹)	Furniture (₹)	Creditors (₹)	Capital
(a)	Harsha started business with cash	2,00,000	0	0	0	0	2,00,000
(b)	Purchased goods from Naman for Cash	(40,000)	40,000	0	0	0	0
	New Equation	1,60,000	40,000	0	0	0	2,00,000
(c)	Sold goods to Bhanu for ₹12,000 (costing ₹ 10,000)	0	(10,000)	12,000	0	0	2,000
	New Equation	1,60,000	30,000	12,000	0	0	2,02,000
(d)	Bought furniture on credit for ₹7,000	0	0	0	7,000	7,000	0
	New Equation	1,60,000	30,000	1,200	7,000	7,000	2,02,000
	Total				2,09,000		2,09,000

19. Prepare accounting equation from the following:	₹
(a) Kunal started business with cash	2,50,000
(b) He purchased furniture for cash	35,000
(c) He paid commission	2,000
(d) He purchases goods on credit	40,000
(e) He sold goods (Costing ₹ 20,000) for cash	26,000

Ans.

		Assets	=		Liabilities + Capital
S. No.	Transactions	Cash (₹)	Furniture (₹)	Stock (₹)	Creditors (₹)	Capital (₹)
(a)	Kunal started business with cash ₹2,50,000	2,50,000	0	0	0	2,50,000
(b)	He purchased furniture for cash ₹35,000	(35,000)	35,000	0	0	0
	New Equation	2,15,000	35,000	0	0	2,50,000
(c)	He paid commission of ₹2,000	(2,000)	0	0	0	(2,000)
	New Equation	2,13,000	35,000	0	0	2,48,000
(d)	He purchased goods on credit for ₹40,000	0	0	40,000	40,000	0
	New Equation	2,13,000	35,000	40,000	40,000	2,48,000
(e)	He sold goods (costing ₹20,000 for cash ₹26,000)	26,000	0	(20,000)	0	6,000
	New Equation	2,39,000	35,000	20,000	40,000	2,54,000
	Total	2,94,000			2,94,000

20. Mohit has the following transactions, prepare accounting equation:	₹
(a) Business started with cash	1,75,000
(b) Purchased goods from Rohit	50,000
(c) Sales goods on credit to Manish (costing ₹17,500)	20,000
(d) Purchased furniture for office use	10,000
(e) Cash paid to Rohit in full settlement	48,500
(f) Cash received from Manish	20,000
(g) Rent paid	1,000
(h) Cash withdrew for personal use	3,000

Ans.

		Assets =				Liabilities + Capital
S. No.	Transactions	Cash ₹	Stock ₹	Debtors ₹	Furniture ₹	Creditors ₹	Capital
(a)	Business started with cash ₹1,75,000	1,75,000	0	0	0	0	1,75,000
(b)	Purchased goods from Rohit ₹50,000	0	50,000	0	0	50,000	0
	New Equation	1,75,000	50,000	0	0	50,000	1,75,000
(c)	Sold goods on credit to Manish for ₹20,000 (costing ₹17,500)	0	(17,500)	20,000	0	0	2,500
	New Equation	1,75,000	32,500	0	0	50,000	1,77,500
(d)	Purchased furniture for office use for ₹10,000	(10,000)	0	0	10,000	0	0
	New Equation	1,65,000	32,500	20,000	10,000	50,000	1,77,500
(e)	Cash paid to Rohit in full settlement ₹48,500	(48,500)	0	0	0	(50,000)	1,500
	New Equation	1,16,500	32,500	20,000	10,000	0	1,79,000
(f)	Cash received from Manish ₹20,000	20,000	0	(20,000)	0	0	0
	New Equation	1,36,500	0	10,000	0	1,79,000	0
(g)	Rent paid of ₹1,000	(1000)	0	0	0	0	(1,000)
	New equation	1,36,500	32,500	0	10,000	0	1,79,000
(g)	Rent paid of ₹1,000	(1000)	0	0	0	0	(1,000)
	New equation	1,35,500	32,500	0	1,000	0	1,78,000
(h)	Cash withdraw for personal use of ₹3,000	(3,000)	0	0	0	0	(3,000)
	New Equation	1,32,500	32,500	0	10,000	0	1,75,000
	Total	1,75,000				1,75,000

21. Rohit has the following transactions:	₹
(a) Commenced business with cash	1,50,000
(b) Purchased machinery on credit	40,000
(c) Purchased goods for cash	20,000
(d) Purchased car for personal use	80,000
(e) Paid to creditors in full settlement	38,000
(f) Sold goods for cash costing ₹5,000	4,500
(g) Paid rent	1,000
(h) Commission received in advance	2,000

Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.

Ans.

22. Use accounting equation to show the effect of the following transactions of M/s Royal Traders:	₹
(a) Started business with cash	1,20,000
(b) Purchased goods for cash	10,000
(c) Rent received	5,000
(d) Salary outstanding	2,000
(e) Prepaid Insurance	1,000
(f) Received interest	700
(g) Sold goods for cash (costing ₹5,000)	7,000
(h) Goods destroyed by fire	500

Ans.

		Assets =			Liabilities + Capital
S. No.	Transactions	Cash (₹)	Stock (₹)	Prepaid Expenses (₹)	Outstanding Expenses (₹)	Capital (₹)
(a)	Business started with cash for ₹1,20,000	1,20,000	0	0	0	1,20,000
(b)	Purchased goods for cash	(10,000)	10,000	0	0	0
	New Equation	1,10,000	10,000	0	0	1,20,000
(c)	Rent received	5,000	0	0	0	5,000
	New Equation	1,15,000	10,000	0	0	1,25,000
(d)	Salary Outstanding for ₹2,000	0	0	0	2,000	(2,000)
	New Equation	1,15,000	10,000	0	2,000	1,23,000
(e)	Prepaid Insurance for ₹1,000	(1,000)	0	1,000	0	0
	New Equation	1,14,000	10,000	1,000	2,000	1,23,700
(f)	Received interest for ₹700	700	0	0	0	700
	New Equation	1,14,700	10,000	1,000	2,000	1,23,700
(g)	Sold goods for cash (costing ₹5,000)	7,000	(5,000)	0	0	2,000
	New equation	1,21,700	5,000	1,000	2,000	1,25,700
(h)	Goods destroyed by fire for ₹500	0	(500)	0	0	(500)
	New Equation	1,21,700	4,500	1,000	2,000	1,25,200
	Total	1,27,200			1,27,200

		Assets =			Liabilities + Capital
S. No.	Transactions	Cash (₹)	Machinery (₹)	Stock (₹)	Creditors (₹)	Capital (₹)
(a)	Business started with cash for ₹1,50,000	1,50,000	0	0	0	1,50,000
(b)	Purchased machinery on credit for ₹40,000	0	40,000	0	40,000	0
	New Equation	1,50,000	40,000	0	40,000	1,50,000
(d)	Purchased car for personal use of ₹80,000	(80,000)	0	0	0	(80,000)
	New Equation	50,000	40,000	20,000	40,000	70,000
(e)	Amount paid to creditors in full settlement for ₹38,000	(38,000)	0	0	(40,000)	2,000
	New Equation	12,000	40,000	20,000	0	72,000
(f)	Sold goods for cash ₹4,500 (costing ₹5,000)	4,500	0	(5,000)	0	(500)
	New Equation	16,500	40,000	15000	0	71,500
(g)	Rent paid of ₹1,000	(1,000)	0	0	0	(1,000)
	New Equation	15,500	40,000	15,000	0	70,500
(h)	Commission received in advance for ₹2,000	2,000	0	0	0	0
	New Equation	17,500	40,000	15,000	0	72,500
	Total	72,500			72,500

23. Show the accounting equation on the basis of the following transactions:
(a) Udit started business with:	₹
(i) Cash	5,00,000
(ii) Goods	1,00,000
(b) Purchased building for cash	2,00,000
(c) Purchased goods from Himani	50,000
(d) Sold goods to Ashu (Cost ₹25,000)	36,000
(e) Paid insurance premium	3,000
(f) Rent outstanding	5,000
(g) Depreciation on building	8,000
(h) Cash withdrawn for personal use	20,000
(i) Rent received in advance	5,000
(j) Cash paid to Himani on account	20,000
(k) Cash received from Ashu	30,000

Ans.

		Assets=				Liabilities + Capital
S. No.	Transactions	Cash (₹)	Stock (₹)	Building (₹)	Debtors (₹)	Creditors (₹)	Outstanding Expenses (₹)	Unaccrued Income (₹)	Capital (₹)
(a)	Started Business with cash and goods	5,00,000	1,00,000	0	0	0	0	0	6,00,000
(b)	Purchased building for cash	(2,00,000)	0	2,00,000	0	0	0	0	0
	New Equation	3,00,000	1,50,000	2,00,000	0	50,000	0	0	6,00,000
(c)	Purchased goods from Himani	0	50,000	0	0	50,000	0	0	0
	New Equation	3,00,000	1,50,000	2,00,000	0	50,000	0	0	6,00,000
(d)	Sold goods to Ashu (costing ₹25,000)	0	(25,000)	0	36,000	0	0	0	11,000
	New Equation	3,00,000	1,25,000	2,00,000	36,000	50,000	0	0	6,11,000
(e)	Paid insurance premium	(3,000)	0	0	0	0	0	0	(3,000)
	New Equation	2,97,000	1,25,000	2,00,000	36,000	50,000	0	0	6,08,000
(f)	Rent outstanding	0	0	0	0	0	5,000	0	(5,000)
	New Equation	2,97,000	1,25,000	2,00,000	36,000	50,000	5,000	0	6,03,000
(g)	Depreciation on building	0	0	(8,000)	0	0	0	0	(8,000)
	New equation	2,97,000	1,25,000	1,92,000	36,000	50,000	5,000	0	5,95,000
(h)	Cash withdrawn for personal use	(20,000)	0	0	0	0	0	0	(20,000)
	New Equation	2,77,000	1,25,000	1,92,000	36,000	50,000	5,000	0	5,75,000
(i)	Rent receive in advance	5,000	0	0	0	0	0	5,000	0
	New Equation	2,82,000	1,25,000	1,25,000	36,000	50,000	50,000	5,000	5,75,000
(j)	Cash paid to Himani on account	(20,000)	0	0	0	(20,000)	0	0	0
	New Equation	2,62,000	1,25,000	1,92,000	36,000	30,000	5,000	5,000	5,75,000
(k)	Cash received from Ashu	30,000	0	0	(30,000)	0	0	0	0
	New Equation	2,92,000	1,25,000	1,92,000	6,000	30,000	5,000	5,000	5,75,000
	Total	6,15,000				6,15,000

24. Show the effect of the following transactions on Assets, Liabilities and Capital through accounting
equation:

	₹
(a) Started business with cash	1,20,000
(b) Rent received	10,000
(c) Invested in shares	50,000
(d) Received dividend	5,000
(e) Purchase goods on credit from Ragani	35,000
(f) Paid cash for household expenses	7,000
(g) Sold goods for cash (costing ₹10,000)	14,000
(h) Cash paid to Ragani	35,000
(i) Deposited into bank	20,000

Ans.

		Asset =				Liabilities + Capital
S. No.	Transactions	Cash (₹)	Investment (₹)	Stock (₹)	Bank (₹)	Creditors (₹)	Capital
(a)	Started business with cash	1,20,000	0	0	0	0	1,20,000
(b)	Rent received	10,000	0	0	0	0	10,000
	New Equation	1,30,000	0	0	0	0	1,30,000
(c)	Amount Invested in shares	(50,000)	50,000	0	0	0	0
	New Equation	80,000	50,000	0	0	0	1,30,000
(d)	Received dividend	5,000	0	0	0	0	5,000
	New Equation	85,000	50,000	0	0	0	1,35,000
(e)	Purchased goods on credit from Ragani	0	0	35,000	0	35,000	0
	New Equation	85,000	50,000	35,000	0	35,000	1,35,000
(f)	Paid cash for household expenses	(7,000)	0	0	0	0	(7,000)
	New Equation	78,000	50,000	35,000	0	35,000	1,28,000
(g)	Sold goods for cash (costing ₹10,000)	14,000	0	(10,000)	0	0	4,000
	New equation	92,000	50,000	25,000	0	35,000	1,32,000
(h)	Cash paid to Ragani	(35,000)	0	0	0	(35,000)	0
	New equation	57,000	50,000	25,000	0	0	1,32,000
(i)	Deposited into bank	(20,000)	0	0	20,000	0	0
	New Equation	37,000	50,000	25,000	20,000	0	1,32,000
	Total	1,32,000				1,32,000

25. Show the effect of following transactions on the accounting equation:	₹
(a) Manoj started business with
(i) Cash	2,30,000
(ii) Goods	1,00,000
(iii) Building	2,00,000
(b) He purchased goods for cash	50,000
(c) He sold goods (costing ₹20,000)	35,000
(d) He purchased goods from Rahul	55,000
(e) He sold goods to Varun (costing ₹ 52,000)	60,000
(f) He paid cash to Rahul in full settlement	53,000
(g) Salary paid by him	20,000
(h) Received cash from Varun in full settlement	59,000
(i) Rent outstanding	3,000
(j) Prepaid Insurance	2,000
(k) Commission received by him	13,000
(l) Amount withdrawn by him for personal use	20,000
(m) Depreciation charge on building	10,000
(n) Fresh capital invested	50,000
(o) Purchased goods from Rakhi	10,000

Ans.

		Asset =					Liabilities + Capital
S. No.	Transactions	Cash (₹)	Stock (₹)	Building (₹)	Debtors (₹)	Prepaid Expenses	Creditors (₹)	Outstanding Expenses (₹)	Capital (₹)
(a)	Manoj started the business with cash, goods, building	2,30,000	1,00,000	2,00,000	0	0	0	0	5,30,000
(b)	He purchased goods for cash	(50,000)	50,000	0	0	0	0	0	0
New Equation	1,80,000	1,50,000	2,00,000	0	0	0	0	0	5,30,000
(c)	He sold goods (costing ₹20,000)	35,000	(20,000)	0	0	0	0	0	15,000
	New Equation	2,15,000	1,30,000	2,00,000	0	0	0	0	5,45,000
(d)	He purchased goods from Rahul ₹55,000	0	55,000	0	0	0	55,000	0	0
	New Equation	2,15,000	1,85,000	2,00,000	0	0	55,000	0	5,45,000
(e)	He sold goods to Varun (costing ₹52,000)	0	(52,000)	0	60,000	0	0	0	8,000
	New Equation	2,15,000	1,33,000	2,00,000	60,000	0	55,000	0	5,53,000
(f)	He paid cash to Rahul in full settlement	(53,000)	0	0	0	0	(55,000)	0	2,000
	New Equation	1,62,000	1,33,000	2,00,000	60,000	0	0	0	5,55,000
(g)	Salary paid by him ₹20,000	0	0	0	0	0	0	0	(20,000)
	New equation	1,42,000	1,33,000	2,00,000	60,000	0	0	0	5,35,000
(h)	Received cash from Varun in full settlement ₹59,000	59,000	0	0	60,000	0	0	0	(1,000)
	New Equation	2,01,000	1,33,000	2,00,000	0	0	0	0	5,34,000
(i)	Rent outstanding for ₹ 3,000	0	0	0	0	0	0	3,000	(3,000)
	New Equation	2,01,000	1,33,000	2,00,000	0	0	0	3,000	5,31,000
(j)	Prepaid Insurance for ₹2,000	(2,000)	0	0	0	2,000	0	0	0
	New Equation	1,99,000	1,33,000	2,00,000	0	2,000	0	3,000	5,31,000
(k)	Commission received by him for ₹13,000	13,000	0	0	0	0	0	0	13,000
	New Equation	2,12,000	1,33,000	2,00,000	0	2,000	0	3,000	5,44,000
(l)	Amount withdrawn by him for personal use ₹20,000	(20,000)	0	0	0	0	0	0	(20,000)
	New Equation	1,92,000	1,33,000	2,00,000	0	2,000	0	3,000	5,24,000
(m)	Depreciation charge on building for ₹10,000	0	0	(10,000)	0	0	0	0	(10,000)
	New equation	1,92,000	1,33,000	1,90,000	0	2,000	0	3,000	5,14,000
(n)	Fresh capital invested for ₹50,000	50,000	0	0	0	0	0	0	50,000
	New Equation	2,42,000	1,33,000	1,90,000	0	2,000	0	3,000	5,64,000
(o)	Purchased goods from Rakhi	0	10,000	0	0	0	10,000	0	0
	New Equation	2,42,000	1,43,000	1,90,000	0	2,000	10,000	3,000	5,64,000
	Total	5,77,000				5,77,000

26. Transactions of M/s. Vipin Traders are given below.

Show the effects on Assets, Liabilities and Capital with the help of accounting equation.

	₹
(a) Business started with cash	1,25,000
(b) Purchased goods for cash	50,000
(c) Purchase furniture from R.K. Furniture	10,000
(d) Sold goods to Parul Traders (Costing ₹7,000 vide Bill no. 5674)	9,000
(e) Paid cartage	100
(f) Cash Paid to R.K. furniture in full settlement	9,700
(g) Cash sales (costing ₹10,000)	12,000
(h) Rent received	4,000
(i) Cash withdrew for personal use	3,000

Ans.

		Assets =				Liabilities + Capital
S. No.	Transactions	Cash (₹)	Stock (₹)	Furniture (₹)	Debtors (₹)	Creditors (₹)	Capital (₹)
(a)	Business started with cash for ₹1,25,000	1,25,000	0	0	0	0	1,25,000
(b)	Purchased goods for cash ₹50,000	(50,000)	50,000	0	0	0	0
	New Equation	75,000	50,000	0	0	0	1,25,000
(c)	Purchase furniture from R.K Furniture	0	0	10,000	0	10,000	0
	New Equation	75,000	50,000	10,000	0	10,000	1,25,000
(d)	Sold goods to Parul Traders (costing ₹7,000)	0	(7,000)	0	9,000	0	2,000
	New Equation	75,000	43,000	10,000	9,000	10,000	1,27,000
(e)	Paid cartage for ₹100	(100)	0	0	0	0	(100)
	New Equation	74,900	43,000	10,000	9,000	10,000	1,26,900
(f)	Cash paid to R.K. Furniture in full settlement	(9,700)	0	0	0	(10,000)	300
	New Equation	65,200	43,000	10,000	9,000	0	1,27,200
(g)	Cash sales (costing ₹10,000)	12,000	(10,000)	0	0	0	2,000
	New Equation	77,200	33,000	10,000	9,000	0	1,29,200
(h)	Rent received for ₹4,000	4,000	0	0	0	0	4,000
	New Equation	81,200	33,000	10,000	9,000	0	1,33,200
(i)	Cash withdrawn for personal use for ₹3,000	(3,000)	0	0	0	0	(3,000)
	New Equation	78,200	33,000	10,000	9,000	0	1,30,200
	Total	1,30,200				1,30,200

27. Bobby opened a consulting firm and completed these transactions during November, 2005:

(a) Invested ₹4,00,000 cash and office equipment with ₹1,50,000 in a business called Bobbie Consulting.

(b) Purchased land and a small office building. The land was worth ₹1,50,000 and the building worth
₹3,50,000. The purchase price was paid with ₹2,00,000 cash and a long term note payable for ₹ 8,00,000.

(c) Purchased office supplies on credit for ₹12,000.

(d) Bobbie transferred title of motor car to the business. The motor car was worth ₹90,000.

(e) Purchased for ₹30,000 additional office equipment on credit.

(f) Paid ₹7,500 salary to the office manager.

(g) Provided services to a client and collected ₹30,000.

(h) Paid ₹4,000 for the month’s utilities.

(i) Paid supplier created in transaction (c).

(j) Purchased new office equipment by paying ₹93,000 cash and trading in old equipment with a
recorded cost of ₹7,000.

(k) Completed services of a client for ₹26,000. This amount is to be paid within 30 days.

(l) Received ₹19,000 payment from the client created in transaction (k).

(m) Bobby withdrew ₹20,000 from the business.

Analyse the above stated transactions and open the following T-accounts:

Cash, client, office supplies, motor car, building, land, long term payables, capital, withdrawals, salary, expense and utilities expense.

Ans. (a) The transaction (a) increases assets by ₹5,50,000 (cash ₹4,00,000 and office equipment ₹1,50,000), it will be debited and on the other hand it will increase the capital by ₹5,50,000 so it will be credited in capital account.

(b) Purchase of land and small office building are assets. On one hand, the purchase of these items will increase their individual accounts and this will increase the total amount of the assets in the business, so, both the accounts will be debited. On the other hand, payment in cash on the purchase of these assets will decrease the cash balance, so cash account will be credited to the extent of amount paid.

After payment for building in cash, the balance of Building account will be transfered to creditors account. This will increase the amount of the creditors, which in turn will increase the total liabilities of the business. Long term payable are regarded as loan to the business that will increase both cash balance (due to intake of loan) as well as liabilities of the business.

(c) Here, office supplies is an expense, so according to the golden rule, ‘All expenses are debited’, it will be debited on one hand while on the other hand `office supplies' has been purchased on credit, so it will increase the liability on account of which supplier’s account will be credited.

(d) Amount invested (motor car) by the proprietor in the business would increase both the capital and assets.

(e) Purchase of additional equipment increases the assets, hence, office equipment account will be debited. Further as the office equipment was purchased on credit, it increase the amount of the creditors for office equipment and the creditors account will be credited.

(f) Salary is an expense and as all the expenses are debited, so the payment of salary to the manager will be debited to the Salary account. And on the other hand the payment of the salary in cash decreases the cash balance (Assets) so the cash account would be credited (as decrease in assets is credited).

(g) Amount received or receivable from services rendered to the client is revenue for the business. All revenues are to be credited so Client services account will be credited. On the other hand, cash received in exchange of service would increase the cash balance. It would be debited to the Cash
account.

(h) The `utilities' has been treated as a revenue expenses. All expenses are to be debited. Amount paid for utilities would be debited to utilities Account. They have been paid in cash so the cash-account will be credited (as this decreases assets).

(i) Payment to the supplier (creditors) will be debited. It results in the decrease in liabilities. Further as the payment has been made in cash, so it results in decrease in the cash balance (assets) and hence the Cash account will be credited.

(j) Purchase of the equipments will be debited in the Equipment Account (as there is increase in the assets). Also as the equipments of worth ₹1,00,000 and ₹93,000 have been purchased for cash and old equipments of worth ₹7,000 have been enchanged so the purchase of the equipments will be debited in the Office Equipment Account and equipment of ₹7,000 will be credited in the same account.

(k) Receipt from `Client Service' is revenue. All revenues are credited. The Client services account will be credited and client is considered as debtors, so the client account will be debited.

(l) The client has been considered as Debtors. The amount received from the client will lead to the
decreases in the debtors balance and the client account will be credited. Receipts from the client will increase the cash balance (assets), and hence the cash account will be debited.

(m) The amount withdrawn by the proprietor is considered as `drawings'. According to the Business Entity Concept, drawings decreases the owner's capital. Thus, the Drawings account will be debited.

On the other hand as drawings have been made in cash, decrease in cash means cash account will be credited with the amount of drawings.

T-Accounts

Dr.

Captial Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(a)	By Cash A/c		4,00,000
				(a)	By Office Equipment A/c		1,50,000
				(d)	By Motor Car A/c		90,000

Dr.

Office Equipment Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(a)	By Cash A/c		4,00,000
				(a)	By Office Equipment A/c		1,50,000
				(d)	By Motor Car A/c		90,000

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(a)	To Capital A/c		1,50,000
(e)	To Creditors for office equipment A/c		30,000
(j)	To Cash A/c		93,000

Dr.

Cash Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(a)	To Capital A/c		4,00,000	(b)	By Land A/c		4,000
(b)	To Long term payable A/c		3,00,000	(b)	By Building A/c		50,000
(g)	To Client Services A/c		30,000	(f)	By Salaries A/c		7,500
(i)	To Client A/c		19,000	(h)	By Utilities A/c		4,000
				(i)	By Suppliers A/c		12,000
				(j)	By Office Equipment A/c		93,000
				(m)	By Drawings A/c		20,000

Dr.

Land Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(b)	To Cash A/c		1,50,000

Dr.

Building Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(b)	To Cash A/c		50,000
(b)	To Creditors for Building A/c		3,00,000

Dr.

Office Suppliers Account (Expenses)

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(c)	To Supplier A/c		12,000

Dr.

Motor Cars Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(d)	To Capital A/c		90,000

Dr.

Supplier's Account (Creditors)

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(i)	To Cash A/c		12,000	(c)	By Office Suppliers A/c		12,000

Dr.

Creditors for Office Equipment

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(e)	By Officer equipment A/c		30,000

Dr.

Salaries Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(f)	To Cash A/c		7,500

Dr.

Client Services Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(g)	By Cash A/c		30,000
				(k)	By Client A/c		26,000

Dr.

Utilities Account (Expenses)

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(h)	To Cash A/c		4,000

Dr.

Client Accounts (Debtors)

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(k)	To Client Services A/c		26,000	(l)	By Cash A/c		19,000

Dr.

Drawings Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
(m)	To Cash A/c		20,000

Dr.

Long term Payable Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(b)	By Cash A/c		3,00,000

Dr.

Creditors for Building Account

Cr.

S. No.	Particulars	J. F.	Amount (₹)	S. No.	Particulars	J. F.	Amount (₹)
				(b)	By Building A/c		3,00,000

28. Journalise the following transactions in the books of Himanshu:

2017		₹
Dec. 01	Business started with cash	75,000
Dec. 07	Purchased goods for cash	10,000
Dec. 09	Sold goods to Swati	5,000
Dec. 12	Purchased furniture	3,000
Dec. 18	Cash received from Swati in full settlement	4,000
Dec. 25	Paid rent	1,000
Dec. 30	Paid salary	1,500

Ans.

In the Books of Himanshu

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Dec. 01	Cash A/c	Dr.		75,000
	To Capital A/c			75,000
	(Being started business with cash)
Dec.07	Purchases A/c	Dr.		10,000
	To Cash A/c				10,000
	(Being goods purchased for cash)
Dec.12	Furniture A/c	Dr.		3,000
	To Cash A/c				3,000
	(Being furniture purchased for cash)
Dec.18	Cash A/c	Dr.		4,000
	Discount Allowed A/c	Dr.		1,000
	To Swati’s A/c				5,000
	(Being cash received from Swati and discount allowed)
Dec.25	Rent A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being rent paid in cash)
Dec.30	Salary A/c	Dr.		1,500
	To Cash A/c				1,500
	(Being salary paid in cash)
	Total			1,00,500	1,00,500

29. Enter the following transactions in the Journal of Mudit :

2017		₹
Jan.01	Commenced business with cash	1,75,000
Jan.01	Building	1,00,000
Jan.02	Goods purchased for cash	75,000
Jan.03	Sold goods to Ramesh	30,000
Jan.04	Paid wages	500
Jan.06	Sold goods for cash	10,000
Jan.10	Paid for trade expenses	700
Jan.12	Cash received from Ramesh	29,500
	Discount allowed	500
Jan.14	Goods purchased for Sudhir	27,000
Jan.18	Cartage paid	1,000
Jan.20	Drew cash for personal use	5,000
Jan.22	Goods use for house hold	2,000
Jan.25	Cash paid to Sudhir	26,700
	Discount allowed	300

Ans.

In the Books of Mudit

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Jan. 01	Cash A/c	Dr.		1,75,000
	To Capital A/c				1,75,000
	(Being commenced business with cash)
Jan. 01	Building A/c	Dr.		1,00,000
	To Cash A/c				1,00,000
	(Being commenced business with building)
Jan. 02	Purchases A/c	Dr.		75,000
	To Cash A/c				75,000
	(Being goods purchased for cash)
Jan. 03	Ramesh A/c	Dr.		30,000
	To Sales A/c				30,000
	(Being goods sold to Ramesh)
Jan. 04	Wages A/c	Dr.		500
	To Cash A/c				500
	(Being wages paid in cash)
Jan. 06	Cash A/c	Dr.		10,000
	To Sales A/c				10,000
	(Being goods sold for cash)
Jan. 10	Trade Expenses A/c	Dr.		700
	To Cash A/c				700
	(Being trade expenses paid in cash)
Jan. 12	Cash A/c	Dr.		29,500
	Discount Allowed A/c	Dr.		500
	To Ramesh				30,000
	(Being cash received from Ramesh and discount allowed to him)
Jan. 14	Purchases A/c	Dr.		27,000
	To Sudhir's A/c				27,000
	(Being goods purchased from Sudhir on credit)
Jan. 18	Cartage A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being cartage paid in cash)
Jan. 20	Drawings A/c	Dr.		5,000
	To Cash A/c				5,000
	(Being Cash withdrawn for personal use)
Jan. 22	Drawings A/c	Dr.		2,000
	To Purchases A/c				2,000
	(Goods drawn from business for households use)
Jan. 25	Sudhir's A/c	Dr.		27,000
	To Cash A/c				26,700
	To Discount Received A/c				300
	(Being cash paid to Sudhir and discount received)				300
		Total		4,83,200	4,83,200

30. Journalise the following transactions:

2017		₹
Dec. 01	Hema started business with cash	1,00,000
Dec. 02	Open a bank account with SBI	30,000
Dec. 04	Purchased goods from Ashu	20,000
Dec. 06	Sold goods to Rahul for cash	15,000
Dec.10	Bought goods from Tara for cash	40,000
Dec.13	Sold goods to Suman	20,000
Dec.16	Received cheque from Suman	19,500
	Discount allowed	500
Dec. 20	Cheque given to Ashu on account	10,000
Dec.22	Rent paid by cheque	2,000
Dec.23	Deposited into bank	16,000
Dec.25	Machine purchased from Parigya	10,000
Dec.26	Trade expenses	2,000
Dec.28	Cheque issued to Parigya	10,000
Dec.29	Paid telephone expenses by cheque	1,200
Dec.31	Paid salary	4,500

Ans.

In the Books of Hema

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Dec. 01	Cash A/c	Dr.		1,00,000
	To Capital A/c			1,00,000
	(Being business started with cash)
Dec. 02	Bank A/c	Dr.		30,000
	To Cash A/c				30,000
	(Being bank account opened wiht SBI)
Dec. 04	Purchases A/c	Dr.		20,000
	To Ashu's A/c				20,000
	(Being goods purchased from Ashu)
Dec. 06	Cash A/c	Dr.		15,000
	To Sales A/c				15,000
	(Being goods sold for cash)
Dec. 10	Purchases A/c	Dr.		40,000
	To Cash A/c				40,000
	(Being goods purchased for cash)
Dec.13	Suman's A/c	Dr.		20,000
	To Sales A/c				20,000
	(Being goods sold to Suman)
De. 16	Bank A/c	Dr.		19,500
	Discount Allowed A/c	Dr.		500
	To Suman's A/c				20,000
	(Being cheque received from Suman and discount allowed)
Dec. 20	Ashu's A/c	Dr.		10,000
	To Bank A/c				10,000
	(Being cheque forwarded to Ashu)
Dec. 22	Rent A/c	Dr.		2,000
	To Bank A/c				2,000
	(Being rent paid by cheque)
Dec. 23	Bank A/c	Dr.		16,000
	To Cash A/c				16,000
	(Being cash deposited into bank)
Dec. 25	Machinery A/c	Dr.		10,000
	To Parigya's A/c	Dr.			10,000
	(Being machinery purchased from Parigya)
Dec. 26	Trade Expenses A/c	Dr.		2,000
	To Cash A/c				2,000
	(Being trade expenses paid)
Dec. 28	Parigya's A/c	Dr.		10,000
	To Bank A/c				10,000
	(Being cheque issued to Parigya)
Dec. 29	Telephone Expenses A/c	Dr.		1,200
	To Bank A/c				1,200
	(Being telephone expenses paid through cheque)
Dec. 30	Salary A/c	Dr.		4,500
	To Cash A/c				4,500
	(Being salary paid)
		Total		3,00,700	3,00,700

31. Journalise the following transactions in the books of Harpreet Bros.:

(a) ₹1,000 due from Rohit are now bad debts.

(b) Goods worth ₹ 2,000 were used by the proprietor.

(c) Charge depreciation @ 10% p.a for two month on machine costing ₹ 30,000.

(d) Provide interest on capital of ₹ 1,50,000 at 6% p.a. for 9 months.

(e) Rahul become insolvent, who owed ₹ 2,000, a final dividend of 60 paise in a rupee is received from his estate.

Ans.

In the Books of Harpreet Bros.

Journal Entries

S. No.	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
(a)	Bad Debt A/c	Dr.		1,000
	To Rohit (Debtors) A/c				1,000
	(Being amount from Rohit became bad debt)
(b)	Drawings A/c	Dr.		2,000
	To Purchase A/c				2,000
	(Being goods withdrawn by proprietor for personal use)
(c)	Depreciation A/c	Dr.		500
	To Machinery A/c				500
	(Being depreciation charged on machinery @ 10% p.a. for two months)				500
	$$\bigg[30,000×\frac{10}{100}×\frac{2}{12} =500\bigg]$$

S. No.	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
(a)	Bad Debt A/c	Dr.		1,000
	To Rohit (Debtors) A/c				1,000
	(Being amount from Rohit became bad debt)
(b)	Drawings A/c	Dr.		2,000
	To Purchase A/c				2,000
	(Being goods withdrawn by proprietor for personal use)
(c)	Depreciation A/c	Dr.		500
	To Machinery A/c				500
	(Being depreciation charged on machinery @ 10% p.a. for two months)				500
	$$\bigg[30,000×\frac{10}{100}×\frac{2}{12} =500\bigg]$$
(d)	Interest on Capital A/c	Dr.		6,750
	To Capital A/c				6,750
	(Being interest on capital at 6% p.a. due for 9 months)
	$$\bigg[=1,50,000×\frac{6}{100}×\frac{9}{12}\\= 6,750\bigg]$$
(e)	Cash A/c	Dr.		1,200
	Bad Debt A/c	Dr.		800
	To Rahul (Debtor) A/c				2,000
	(Being received from Rahul 60 paise in a rupee and rest amount considered as bad debt)
		Total		12,250	12,250

32. Prepare Journal from the transactions given below:

	₹
(a) Cash paid for installation of machine	500
(b) Goods given as charity	2,000
(c) Interest charge on capital @ 7% p.a. when total capital were	70,000
(d) Received ₹1,200 of a bad debts written-off last year.	70,000
(e) Goods destroyed by fire	2,000
(f) Rent outstanding	1,000
(g) Interest on drawings	900
(h) Sudhir Kumar who owed me ₹ 3,000 has failed to pay the amount.
He pays me a compensation of 45 paise in a rupee.
(i) Commission received in advance	7,000

Ans.

Journal Entries

S. No.	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
(a)	Machinery A/c	Dr.		500
	To Cash A/c				500
	(Being cash paid for installation of machinery)
(b)	Charity A/c	Dr.		2,000
	To Purchases A/c				2,000
	(Being goods given as charity)
(c)	Interest on Capital A/c $$\bigg[70,000×\frac{7}{100} = 4,900\bigg]$$	Dr.			4,900
	(Being interest on capital charged @ 7% p.a.)
(d)	Cash A/c	Dr.		1,200
	To Bad Debt Recovered A/c				1,200
	(Being cash received from debtors which was previously written off as bad)
(e)	Goods Destroyed by Fire A/c	Dr.		2,000
	To Purchases A/c				2,000
	(Being goods destroyed by fire)
(f)	Rent A/c	Dr.		1,000
	To Rent Outstanding A/c				1,000
	(Being rent due but not paid)
(g)	Drawings A/c	Dr.		900
	To Interest on Drawings A/c				900
	(Being interest allowed on drawings)
(h)	Cash A/c$$\bigg[3,000×\frac{45}{100} =1,350\bigg]$$	Dr.
	Bad Debt A/c [3,000 – 1,350 = 1,650]	Dr.		1,650
	To Sudhir Kumar's A/c				3,000
	To Sudhir Kumar's A/c
	(Being Sudhir Kumar declared insolvent and cash received from him 45 paise in a rupee in full settlement)
(i)	Commission A/c	Dr.		7,000
	To Commission Received in Advance A/c				7,000
	(Being commission received in advance)
	(Note: If it is assumed, commission in adavance already credited as commission)
	OR
	Cash A/c	Dr.		7,000
	To Commission Received in Advance A/c				7,000
	(Being commission received in advance)
	(Note: If it is assumed, commission in advance not already credited as commission)
		Total		22,500	22,500

33. Journalise the following transactions, post to the ledger:

2017		₹
Nov. 01	Business started with (i) Cash	1,50,000
	(ii) Goods	50,000
Nov. 03	Purchased goods from Harish	50,000
Nov. 05	Sold goods for cash	12,000
Nov. 08	Purchase furniture for cash	5,000
Nov. 10	Cash paid to Harish on account	15,000
Nov. 13	Paid sundry expenses	200
Nov. 15	Cash sales	15,000
Nov. 18	Deposited into bank	5,000
Nov. 20	Drew cash for personal use	1,000
Nov. 22	Cash paid to Harish in full settlement of account	14,700
Nov. 25	Good sold to Nitesh	7,000
Nov. 26	Cartage paid	200
Nov. 27	Rent paid	1,500
Nov. 29	Received Cash from Nitesh	6,800
	Discount allowed	200
Nov. 30	Salary paid	3,000

Ans.

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Nov. 01	Cash A/c	Dr.		1,50,000
	Stock A/c	Dr.		50,000
	To Capital A/c				2,00,000
	(Being started business with cash)
Nov. 03	Purchases A/c	Dr.		30,000
	To Harish A/c				30,000
	(Being goods purchased from Harish)
Nov.05	Cash A/c	Dr.		12,000
	To Sales A/c				12,000
	(Being goods sold for cash)
Nov. 08	Furniture A/c	Dr.		5,000
	To Cash A/c				5,000
	(Being furniture purchased for cash)
Nov. 10	Harish's A/c	Dr.		15,000
	To Cash A/c				15,000
	(Being cash paid to Harish)
Nov. 13	Sundry Expenses A/c	Dr.		200
	To Cash A/c				200
	(Being sundry expenses paid)
Nov. 15	Cash A/c	Dr.		15,000
	To Sales A/c				15,000
	(Being goods sold for cash)
Nov. 18	Bank A/c	Dr.		5,000
	To Cash A/c				5,000
	(Being cash deposited into bank)
Nov. 20	Drawing A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being cash withdrawn for personal use)
Nov. 22	Harish's A/c	Dr.		15,000
	To Cash A/c				14,700
	To Discount Received A/c				300
	(Being payment made to Harish and discount received)
Nov. 25	Nitesh's A/c	Dr.		7,000
	To Sales A/c				7,000
	(Being goods sold to Nitesh)
Nov. 26	Cartage A/c	Dr.		200
	To Cash A/c				200
	(Being cartage paid)
Nov. 27	Rent A/c	Dr.		1,500
	To Cash A/c				1,500
	(Being rent paid)
Nov. 29	Cash A/c	Dr.		6,800
	Discount Allowed A/c			200
	To Nitesh's A/c				7,000
	(Cash received from Nitesh and discount allowed)
Nov. 30	Salary A/c	Dr.		3,000
	To Cash A/c				3,000
	(Being salary paid)
		Total		3,16,900	3,16,900

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 01	To Capital A/c		1,50,000	Nov. 08	By Furniture A/c		5,000
Nov. 05	To Sales A/c		12,000	Nov. 10	By Harish A/c		15,000
Nov. 15	To Sales A/c		15,000	Nov. 13	By Sundry Expenses A/c		200
Nov. 29	To Nitesh A/c		6,800	Nov. 18	By Bank A/c		5,000
				Nov. 20	By Drawings A/c		1,000
				Nov. 22	By Harish A/c		14,700
				Nov. 26	By Cartage A/c		200
				Nov. 27	By Rent A/c		1,500
				Nov. 30	By Salaries A/c		3,000
				Nov. 30	By Balance c/d		1,38,200
			1,83,800				1,83,800

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 03	To Balance c/d		2,00,000	Nov. 01	By Cash A/c		1,50,000
				Nov. 01	By Stock A/c		50,000
			2,00,000				2,00,000

Dr.

Stock Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 01	To Capital A/c		50,000	Nov. 30	By Balance c/d		50,000
			50,000				50,000

Dr.

Cartage Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 26	To Cash A/c		200	Nov. 30	By Balance c/d		200
Nov. 26	To Cash A/c		200	Nov. 30	By Balance c/d		200
			200				200

Dr.

Rent Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 27	To Cash A/c		1,500	Nov. 30	By Balance c/d		1,500
			1,500				1,500

Dr.

Salary Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov. 30	To Cash A/c		3,000	Nov. 30	By Balance c/d		3,000
			3,000				3,000

Dr.

Furniture Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.08	To Cash A/c		5,000	Nov. 30	By Balance c/d		5,000
			5,000				5,000

Dr.

Nitesh's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.25	To Sales A/c		7,000	Nov.29	By Cash A/c		6,800
				Nov.29	By Discount Allowed A/c		200
			7,000				7,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.30	To Balance c/d		34,000	Nov.05	By Cash A/c		12,000
				Nov.15	By Cash A/c		15,000
				Nov.25	By Nitesh A/c		7,000
			34,000				34,000

Dr.

Purchase Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.03	To Harish A/c		30,000	Nov.30	By Balance c/d		12,000
				30,000			30,000

Dr.

Harish Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.03	To Harish A/c		30,000	Nov.30	By Balance c/d		12,000
				30,000			30,000

Dr.

Sundry Expenses Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.13	To Cash A/c		200	Nov.30	By Balance c/d		200
			200				200

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.18	To Cash A/c		5,000	Nov.30	By Balance c/d		5,000
			5,000				5,000

Dr.

Drawings Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.20	To Cash A/c		1,000	Nov.30	By Balance c/d		1,000
			1,000				1,000

Dr.

Discount Received Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.30	To Balance c/d		300	Nov.30	By Harish’s A/c		300
			300				300

Dr.

Discount Allowed Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Nov.30	To Nitesh’s A/c		200	Nov.30	By Balance c/d		200
			200				200

34. Journalise the following transactions in the Journal of M/s. Goel Brothers and post them to the ledger.

2017		₹
Jan. 01	Started business with cash	1,65,000
Jan. 02	Opened bank account in PNB	80,000
Jan. 04	Goods purchased from Tara	22,000
Jan.05	Goods purchased for cash	30,000
Jan.08	Goods sold to Naman	12,000
Jan.10	Cash paid to Tara	22,000
Jan.15	Cash received from Naman	11,700
	Discount allowed	300
Jan. 16	Paid wages	200
Jan. 18	Furniture purchased for office use	5,000
Jan. 20	Withdrawn from bank for personal use	4,000
Jan. 22	Issued cheque for rent	3,000
Jan. 23	Goods issued for household purpose	2,000
Jan. 24	Drawn cash from bank for office use	6,000
Jan. 26	Commission received	1,000
Jan. 27	Bank charges	200
Jan. 28	Cheque given for insurance premium	3,000
Jan. 29	Paid salary	7,000
Jan. 30	Cash sales	10,000

Ans.

In the Books of M/s Goel Brothers

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Jan.01	Cash A/c	Dr.		1,65,000
	To Capital A/c				1,65,000
	(Being started business with cash)
Jan.02	Bank A/c	Dr.		80,000
	To Cash A/c				80,000
	(Being bank account opened in PNB)
Jan.04	Purchases A/c	Dr.		22,000
	To Tara's A/c				22,000
	(Being goods purchased from Tara)
Jan.05	Purchases A/c	Dr.		30,000
	To Cash A/c				30,000
	(Being goods purchased for cash)
Jan.08	Naman's A/c	Dr.		12,000
	To Sales A/c				12,000
	(Being sale of goods to Naman)
Jan.10	Tara's A/c	Dr.		22,000
	To Cash A/c				22,000
	(Being cash paid to Tara)
Jan.15	Cash A/c	Dr.		11,700
	Discount Allowed A/c	Dr.		300
	To Naman's A/c				12,000
	(Being cash received from Naman and discount allowed )
Jan.16	Wages A/c	Dr.		200
	To Cash A/c				200
	(Being wages paid)
Jan.18	Furniture A/c	Dr.		5,000
	To Cash A/c				5,000
	(Being furniture purchased for cash)
Jan.20	Drawings A/c	Dr.		4,000
	To Bank A/c				4,000
	(Being cash withdrawn for personal use)
Jan.22	Rent A/c	Dr.		3,000
	To Bank A/c				3,000
	(Being rent paid through cheque)
Jan.23	Drawings A/c	Dr.		2,000
	To Purchases A/c				2,000
	(Being goods drawn for household purpose)
Jan.24	Cash A/c	Dr.		6,000
	To Bank A/c				6,000
	(Being cash drawn from bank)
Jan.26	Cash A/c	Dr.		1,000
	To Commission A/c				1,000
	(Being commission received)
Jan.27	Bank Charges A/c	Dr.		200
	To Bank A/c				200
	(Being bank charged charges)
Jan.28	Insurance A/c	Dr.		3,000
	To Bank A/c				3,000
	(Being insurance paid through cheque)
Jan.29	Salary A/c	Dr.		7,000
	To Cash A/c				7,000
	(Being salary paid)
Jan.30	Cash A/c	Dr.		10,000
	To Sales A/c				10,000
	(Being cash received for sale of goods)				10,000
		Total		3,84,400	3,84,400

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan. 01	To Capital A/c		1,65,000	Jan. 02	By Bank A/c		80,000
Jan. 15	To Naman A/c		11,700	Jan. 05	By Purchase A/c		30,000
Jan. 24	To Bank A/c		6,000	Jan. 10	By Tara A/c		22,000
Jan. 26	To Commission A/c		1,000	Jan. 16	By Wages A/c		200
Jan. 30	To Sales A/c		10,000	Jan. 18	By Furniture A/c		5,000
				Jan. 29	By Salaries A/c		7,000
				Jan. 31	By Balance c/d		49,500
			1,93,700				1,93,700

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Balance c/d		1,65,000	Jan.01	By Cash A/c		1,65,000
			1,65,000				1,65,000

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.02	To Cash A/c		80,000	Jan.20	By Drawings A/c		4,000
				Jan.22	By Rent A/c		3,000
				Jan.24	By Cash A/c		6,000
				Jan.27	By Bank charges A/c		200
				Jan.28	By Insurance A/c		3,000
				Jan.31	By Balance c/d		63,800
			80,000				80,000

Dr.

Tara's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.10	To Cash A/c		22,000	Jan.04	By Purchases A/c		22,000
			22,000				22,000

Dr.

Purchases Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.04	To Tara’s A/c		22,000	Jan.23	By Drawings A/c		2,000
Jan.05	To Cash A/c		30,000	Jan.31	By Balance c/d		50,000
			52,000				52,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Balance c/d		22,000	Jan.08	By Naman A/c		12,000
				Jan.30	By Cash A/c		10,000
			22,000				22,000

Dr.

Naman's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.08	To Sales A/c		12,000	Jan.15	By Cash A/c		11,700
				Jan.15	By Discount Allowed A/c		300
			12,000				12,000

Dr.

Discount Allowed Account

Cr.

Dr.

Wages Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.15	To Naman A/c		300	Jan.31	By Balance c/d		300
			300				300

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.16	To Cash A/c		200	Jan.31	By Balance c/d		200
			200				200

Dr.

Furniture Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.18	To Cash A/c		5,000	Jan.31	By Balance c/d		5,000
			5,000				5,000

Dr.

Drawing Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.20	To Bank A/c		4,000	Jan.31	By Balance c/d		6,000
Jan.23	To Purchases A/c		2,000
			6,000				6,000

Dr.

Rent Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.22	To Bank A/c		3,000	Jan.31	By Balance c/d		3,000
			3,000				3,000

Dr.

Commission Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Balance c/d		1,000	Jan.26	By Cash A/c		1,000
			1,000				1,000

Dr.

Bank Charges Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.27	To Bank A/c		200	Jan.31	By Balance c/d		200
			200				200

Dr.

Insurance Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.18	To Bank A/c		3,000	Jan.31	By Balance c/d		3,000
			3,000				3,000

Dr.

Salary Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.29	To Cash A/c		7,000	Jan.31	By Balance c/d		7,000
			7,000				7,000

35. Give journal entries of M/s. Mohit traders; post them to the Ledger from the following transactions:

August, 2017	₹
1 Commenced business with cash	1,10,000
2 Opened bank account with H.D.F.C.	50,000
3 Purchased furniture	20,000
7 Bought goods for cash from M/s. Rupa Traders	30,000
8 Purchased good from M/s. Hema Traders	42,000
10 Sold goods for cash	30,000
14 Sold goods on credit to M/s. Gupta Traders	12,000
16 Rent paid	4,000
18 Paid trade expenses	1,000
20 Received cash from Gupta Traders	12,000
22 Goods return to Hema Traders	2,000
23 Cash paid to Hema Traders	40,000
25 Bought postage stamps	100
30 Paid salary to Rishabh	4,000

Ans.

In the Book of M/s. Mohit Traders

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Aug.01	Cash A/c	Dr.		1,10,000
	To Capital A/c				1,10,000
	(Being business commenced with cash)
Aug.02	Bank A/c	Dr.		50,000
	To Cash A/c				50,000
	(Being bank account opened with H.D.F.C.)
Aug.03	Furniture A/c	Dr.		20,000
	To Cash A/c				20,000
	(Being furniture purchased)
Aug.07	Purchases A/c	Dr.		30,000
	To Cash A/c				30,000
	(Being goods purchased for cash)
Aug.08	Purchases A/c	Dr.		42,000
	To M/s. Hema Trader's A/c				42,000
	(Being goods purchased from M/s. Hema Traders)
Aug.10	Cash A/c	Dr.		30,000
	To Sales A/c				30,000
	(Being goods sold for cash)
Aug.14	M/s. Gupta Trader's A/c	Dr.		12,000
	To Sales A/c				12,000
	(Being goods sold to M/s Gupta Traders)
Aug.16	Rent A/c	Dr.		4,000
	To Cash A/c				4,000
	(Being rent paid in cash)
Aug.18	Trade Expenses A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being trade expenses paid in cash)
Aug. 20	Cash A/c	Dr.		12,000
	To M/s. Gupta Trader's A/c				12,000
	(Being cash received from M/s. Gupta Traders)
Aug. 22	M/s. Hema Trader's A/c	Dr.		2,000
	To Purchases Return A/c				2,000
	(Being goods returned to Hema Traders)
Aug. 23	M/s. Hema Traders's A/c	Dr.		40,000
	To Cash A/c				40,000
	(Being cash paid to Hema Traders)
Aug. 25	Postage Stamps A/c	Dr.		100
	To Cash A/c				100
	(Being postage stamps purchased)
Aug. 30	Salaries A/c	Dr.		4,000
	To Cash A/c				4,000
	(Being salaries paid in cash)
		Total		3,57,100	3,57,100

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.01	To Capital A/c		1,10,000	Aug.02	By Bank A/c		50,000
Aug.10	To Sales A/c		30,000	Aug.03	By Furniture A/c		20,000
Aug.20	To M/s. Gupta Traders A/c		12,000	Aug.07	By Purchases A/c		30,000
				Aug.16	By Rent A/c		4,000
				Aug.18	By Trade Expenses A/c		1,000
				Aug.23	By M/s. Hema Traders A/c		40,000
				Aug.25	By Postage Stamps A/c		100
				Aug.30	By Salaries A/c		4,000
				Aug.31	By Balance c/d		2,900
			1,52,000				1,52,000

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.31	To Balance c/d		1,10,000	Aug.01	By Cash A/c		1,10,000
			1,10,000				1,10,000

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.02	To Cash A/c		50,000	Aug.31	By Balance c/d		50,000
			50,000				50,000

Dr.

Furniture Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.03	To Cash A/c		20,000	Aug.31	By Balance c/d		20,000
			20,000				20,000

Dr.

Purchases Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.03	To Cash A/c		30,000	Aug.31	By Balance c/d		72,000
Aug.08	To M/s. Hema Traders A/c		42,000
			72,000				72,000

Dr.

M/s. Hema Traders Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.22	To Purchase Return A/c		2,000	Aug.08	By Purchases A/c		42,000
Aug.23	To Cash A/c		40,000
			42,000				42,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.31	To Balance c/d		42,000	Aug.10	By Cash A/c		30,000
				Aug.14	By M/s. Gupta Traders A/c		12,000
			42,000				42,000

Dr.

M/s. Gupta Traders Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.14	To Sales A/c		12,000	Aug.20	By Cash A/c		12,000
			12,000				12,000

Dr.

Rent Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.16	To Cash A/c		4,000	Aug.31	By Balance c/d		4,000
			4,000				4,000

Dr.

Trader Expenses Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.18	To Cash A/c		1,000	Aug.31	By Balance c/d		1,000
			1,000				1,000

Dr.

Purchase Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.31	To Balance c/d		2,000	Aug.22	By M/s. Hema Traders A/c		2,000
			2,000				2,000

Dr.

Postage Stamps Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.25	To Cash A/c		100	Aug.31	By Balance c/d		100
			100				100

Dr.

Salaries Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Aug.30	To Cash A/c		4,000	Aug.31	By Balance c/d		4,000
			4,000				4,000

36. Journalise the following transactions in the Books of the M/s. Bhanu Traders and Post them into the Ledger.

December, 2017	₹
1 Started business with cash	92,000
2 Deposited into bank	60,000
4 Bought goods on credit from Himani	40,000
6 Purchased goods from cash	20,000
8 Returned goods to Himani	4,000
10 Sold goods for cash	20,000
14 Cheque given to Himani	36,000
17 Goods sold to M/s. Goyal Traders(*)	3,50,000
19 Drew cash from bank for personal use	2,000
21 Goyal Traders returned goods	3,500
22 Cash deposited into bank	20,000
26 Cheque received from Goyal Traders	31,500
28 Goods given as charity	2,000
29 Rent paid	3,000
30 Salary paid	7,000
31 Office machine purchased for cash	3,000

(*) There is an error in NCERT. The amount of goods sold to M/s. Goyal Traders is 35,000.

Ans.

In the Books of M/s. Bhanu Traders

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Dec.01	Cash A/c	Dr.		92,000
	To Capital A/c				92,000
	(Being business started with cash)
Dec.02	Bank A/c	Dr.		60,000
	To Cash A/c				60,000
	(Being cash deposited into bank)
Dec.04	Purchases A/c	Dr.		40,000
	To Himani A/c				40,000
	(Being goods purchased from Himani)
Dec.06	Purchases A/c	Dr.		20,000
	To Cash A/c				20,000
	(Being goods puchased fom cash)
Dec.08	Himani A/c	Dr.		4,000
	To Purchases Return A/c				4,000
	(Being goods returned to Himani)
Dec.10	Cash A/c	Dr.		20,000
	To Sales A/c				20,000
	(Being goods sold for cash)
De.14	Himani's A/c	Dr.		36,000
	To Bank A/c				36,000
	(Being cheque given to Himani)
Dec.17	M/s. Goyal Traders A/c	Dr.		35,000
	To Sales A/c				35,000
	(Being goods sold to M/s. Goyal Traders
Dec.19	Drawings A/c	Dr.		2,000
	To Bank A/c				2,000
	(Being cash withdrawn from bank for personal use)
Dec.21	Sales Return A/c	Dr.		3,500
	To M/s. Goyal Trader's A/c				3,500
	(Being goods returned by Goyal Traders)
Dec.22	Bank A/c	Dr.		20,000
	To Cash A/c				20,000
	(Being cash deposited into bank)
Dec.26	Bank A/c	Dr.		31,500
	To M/s. Goyal Trader's A/c				31,500
	(Being cheque received from M/s. Goyal Traders)
Dec.28	Charity A/c	Dr.		2,000
	To Purchase A/c				2,000
	(Being goods given as charity)
Dec.29	Rent A/c	Dr.		3,000
	To Bank A/c				3,000
	(Being rent paid)
Dec.30	Salaries A/c	Dr.		7,000
	To Cash A/c				7,000
	(Being salaries paid)
Dec.31	Office Machine A/c	Dr.		3,000
	To Cash A/c				3,000
	(Being office machinery purchased)
		Total		3,79,000	3,79,000

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.01	To Capital A/c		92,000	Dec.02	By Bank A/c		60,000
Dec.10	To Sales A/c		20,000	Dec.06	By Purchases A/c		20,000
				Dec.22	By Bank A/c		20,000
				Dec.30	By Salaries A/c		7,000
				Dec.31	By Office Machine A/c		3,000
				Dec.31	By Balance c/d		2,000
			1,12,000				1,12,000

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		92,000	Dec.01	By Cash A/c		92,000
			92,000				92,000

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.02	To Cash A/c		60,000	Dec.14	By Drawings A/c		2,000
Dec.22	To Cash A/c		20,000	Dec.06	By Himani A/c		36,000
Dec.26	To Goyal Traders A/c		31,500	Dec.29	By Rent (see note) A/c		3,000
				Dec.31	By Balance c/d		70,500
			1,11,500				1,11,500

Note: For transaction on December 29, 2017, it has been assumed that the rent of ₹3,000 is paid through cheque. If instead the rent would have been paid in cash, the cash account would have shown a credit (negative) balance and that is logically not correct.

Dr.

Purchases Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.04	To Himani A/c		40,000	Dec.28	By Charity A/c		2,000
Dec.06	To Cash A/c		20,000	Dec.31	By Balance c/d		58,000
			60,000				60,000

Dr.

Himani’s Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.08	To Purchase Return A/c		4,000	Dec.04	By Purchases A/c		40,000
Dec.14	To Bank A/c		36,000
			40,000				40,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		55,000	Dec.10	By Cash A/c		20,000
				Dec.26	By M/s. Goyal Traders A/c		35,000
			55,000				55,000

Dr.

M/s. Goyal Traders Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.17	To Sales A/c		35,000	Dec.21	By Sales Return A/c		3,500
				Dec.26	By Bank A/c		31,500
			35,000				35,000

Dr.

Purchases Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		4,000	Dec.08	By Himani A/c		4,000
			4,000				4,000

Dr.

Drawings Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.19	To Bank A/c		2,000	Dec.31	By Balance c/d		2,000
			2,000				2,000

Dr.

Sales Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.21	To M/s. Goyal Traders A/c		3,500	Dec.31	By Balance c/d		3,500
			3,500				3,500

Dr.

Charity Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.28	To Purchases A/c		2,000	Dec.31	By Balance c/d		2,000
			2,000				2,000

Dr.

Rent Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.21	To Cash A/c		3,000	Dec.31	By Balance c/d		3,000
			3,000				3,000

Dr.

Salaries Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.21	To Cash A/c		7,000	Dec.31	By Balance c/d		7,000
			7,000				7,000

Dr.

Office Machine Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.21	To Cash A/c		3,000	Dec.31	By Balance c/d		3,000
			3,000				3,000

37. Journalise the following transactions in the Books of M/s. Beauti Traders. Also post them in the ledger.

Dec. 2017	₹
1 Started business with cash	2,00,000
2 Bought office furniture	30,000
3 Paid into bank to open an current account	1,00,000
5 Purchased a computer and paid by cheque	2,50,000
6 Bought goods on credit from Ritika	60,000
8 Cash sales	30,000
9 Sold goods to Krishna on credit	25,000
12 Cash paid to Mansi on account	30,000
14 Goods returned to Ritika	2,000
15 Stationery purchased for cash	3,000
16 Paid wages	1,000
18 Goods returned by Krishna	2,000
20 Cheque given to Ritika	28,000
22 Cash received from Krishna on account	15,000
24 Insurance premium paid by cheque	4,000
26 Cheque received from Krishna	8,000
28 Rent paid by cheque	3,000
29 Purchased goods on credit from Meena Traders	20,000
30 Cash sales	14,000

In the Books of Beauti Traders

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Dec.01	Cash A/c	Dr.		2,00,000
	To Capital A/c				2,00,000
	(Being business started with cash)
Dec.02	Office Furniture A/c	Dr.		30,000
	To Cash A/c				30,000
	(Being office furniture purchased
Dec.03	Bank A/c	Dr.		1,00,000
	To Cash A/c				1,00,000
	(Being opened a current account)
Dec.05	Computer A/c	Dr.		2,50,000
	To Bank A/c				2,50,000
	(Being computer purchased and payment made through cheque)
Dec.06	Purchases A/c	Dr.		60,000
	To Ritika's A/c				60,000
	(Being goods purchased from Ritika on credit)
Dec.08	Cash A/c	Dr.		30,000
	To Sales A/c				30,000
	(Being goods sold for cash)
De.09	Krishna's A/c	Dr.		25,000
	To Sales A/c				25,000
	(Being goods sold to Krishna)
Dec.12	Mansi’s A/c	Dr.		30,000
	To Cash A/c				30,000
	(Being cash paid to Mansi on accounts)
	To Purchases Return A/c				2,000
Dec.14	Ritika's A/c	Dr.		2,000
	To Purchases Return A/c				2,000
	(Being goods returned to Ritika)
Dec.15	Stationery A/c	Dr.		3,000
	To Cash A/c				3,000
	(Being stationery purchased for cash)
Dec.16	Wages A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being wages paid)
Dec.18	Sales Return A/c	Dr.		2,000
	To Krishna A/c				2,000
	(Being goods returned by Krishna)
Dec.20	Ritika's A/c	Dr.		28,000
	To Bank A/c				28,000
	(Being cheque issued to Ritika)
Dec.22	Cash A/c	Dr.		15,000
	To Krishna's A/c			15,000
	(Being cash received from Krishna on account)
Dec.24	Insurance A/c	Dr.		4,000
	To Bank A/c				4,000
	(Being insurance premium paid through cheque)
Dec.26	Bank A/c	Dr.		8,000
	To Krishna's A/c				8,000
	(Being cheque received from Krishna)
Dec.28	Rent A/c	Dr.		3,000
	To Bank A/c				3,000
	(Being rent paid through cheque)
Dec.29	Purchases A/c	Dr.		20,000
	To Meena Trader's A/c				20,000
	(Being goods purchased on credit from Meena Traders)
Dec.30	Cash A/c	Dr.		14,000
	To Sales A/c				14,000
	(Being goods sold for cash)
		Total		8,25,000	8,25,000

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.01	To Capital A/c		2,00,000	Dec.02	By Office Furniture A/c		30,000
Dec.08	To Sales A/c		30,000	Dec.03	By Bank A/c		1,00,000
Dec.22	To Krishna A/c		15,000	Dec.12	By Mansi A/c		30,000
Dec.30	To Sales A/c		14,000	Dec.15	By Stationary A/c		3,000
				Dec.16	By Wages A/c		1,000
				Dec.31	By Balance c/d		95,000
			2,59,000				2,59,000

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		2,00,000	Dec.1	By Cash A/c		2,00,000
			2,00,000				2,00,000

Dr.

Office Furniture Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.02	To Cash A/c		30,000	Dec.31	By Balance c/d		30,000
			30,000				30,000

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
Dec.03	To Cash A/c		1,00,000	Dec.05	By Computer A/c		2,50,000
Dec.26	To Krishna A/c		8,000	Dec.20	By Ritika A/c		28,000
Dec.31	To Balance c/d (overdraft)		1,77,000	Dec.24	By Insurance A/c		4,000
				Dec.28	By Rent A/c		3,000
			2,85,000				2,85,000

Dr.

Computer Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.05	To Bank A/c		2,50,000	Dec.31	By Balance c/d		2,50.000
			2,50,000				2,50.000

Dr.

Purchases Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.29	To Menna Traders A/c		20,000
			80,000				80,000

Dr.

Ritika's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.14	To Purchases Return A/c		2,000	Dec.06	By Purchases A/c		60,000
Dec.20	To Bank A/c		28,000
Dec.31	To Balance c/d		30,000
			60,000				60,000

Dr.

Meena's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		20,000	Dec.29	By Purchases A/c		20,000
			20,000				20,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		69,000	Dec.08	By Cash A/c		30,000
				Dec.09	By Krishna A/c		25,000
				Dec.30	By Cash A/c		14,000
			69,000				69,000

Dr.

Krishna's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.09	To Sales A/c		25,000	Dec.18	By Sales Return A/c		2,000
				Dec.22	By Cash A/c		15,000
				Dec.26	By Bank A/c		8,000
			25,000				25,000

Dr.

Mansi's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.12	To Cash A/c		30,000	Dec.31	By Balance c/d		30,000
			30,000				30,000

Dr.

Purchases Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.31	To Balance c/d		2,000	Dec.31	By Ritika A/c		2,000
			2,000				2,000

Dr.

Stationary Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.15	To Cash A/c		3,000	Dec.31	By Balance c/d		3,000
			3,000				3,000

Dr.

Wages Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.16	To Cash A/c		1,000	Dec.31	By Balance c/d		1,000
			1,000				1,000

Dr.

Sales Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.18	To Krishna A/c		2,000	Dec.31	By Balance c/d		2,000
			2,000				2,000

Dr.

Insurance Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.24	To Bank A/c		4,000	Dec.31	By Balance c/d		4,000
			4,000				4,000

Dr.

Stationary Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Dec.28	To Bank A/c		3,000	Dec.31	By Balance c/d		3,000
			3,000				3,000

38. Journalise the following transactions in the books of Sanjana and post them into the ledger:

	January. 2017	₹
1	Cash in hand	6,000
	Cash at bank	55,000
	Stock of goods	40,000
	Due to Rohan	6,000
	Due from Tarun	10,000
3	Sold goods to Karuna	15,000
4	Cash sales	10,000
6	Goods sold to Heena	5,000
8	Purchased goods from Rupali	30,000
10	Goods returned from Karuna	2,000
14	Cash received from Karuna	13,000
15	Cheque given to Rohan	6,000
16	Cash received from Heena	3,000
20	Cheque received from Tarun	10,000
22	Cheque received from Tarun	2,000
25	Cash given to Rupali	18,000
26	Paid cartage	1,000
27	Paid salary	8,000
28	Cash sale	7,000
29	Cheque given to Rupali	12,000
30	Sanjana took goods for personal use	4,000
31	Paid General expense	500

Ans.

In the Books of Beauti Traders

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
Jan.01	Cash A/c	Dr.		6,000
	Bank A/c	Dr.		55,000
	Stock A/c	Dr.		40,000
	Tarun's A/c	Dr.		10,000
	To Rohan's A/c				6,000
	To Capital A/c				1,05,000
	(Being balance brought from the last month)
Jan.03	Karuna's A/c	Dr.		15,000
	To Sales A/c				15,000
	(Being goods sold to Karuna)
Jan.04	Cash A/c	Dr.		10,000
	To Sales A/c				10,000
	(Being goods sold for cash)
Jan.06	Heena's A/c	Dr.		5,000
	To Sales A/c				5,000
	(Being goods sold to Heena)
Jan.08	Purchases A/c	Dr.		30,000
	To Rupali's A/c				30,000
	(Being goods purchased from Rupali)
Jan.10	Sales Return A/c	Dr.		2,000
	To Karuna's A/c				2,000
	(Being goods returned by Karuna)
Jan.14	Cash A/c	Dr.		13,000
	To Karuna's A/c				13,000
	(Being cash received from Karuna)
Jan.15	Rohan's A/c	Dr.		6,000
	To Bank A/c				6,000
	(Being cheque issued to Rohan)
Jan.16	Cash A/c	Dr.		3,000
	To Heena's A/c				3,000
	(Being cash received from Heena)
Jan.20	Bank A/c	Dr.		10,000
	To Tarun's A/c				10,000
	(Being Cheque received from Tarun)
Jan.22	Bank A/c	Dr.		2,000
	To Heena's A/c				2,000
	(Being cheque received from Heena)
Jan.25	Rupali's A/c	Dr.		18,000
	To Cash A/c				18,000
	(Being goods returned by Rupali)
Jan.26	Cartage A/c	Dr.		1,000
	To Cash A/c				1,000
	(Being cartage paid)
Jan.27	Salaries A/c	Dr.		8,000
	To Cash A/c				8,000
	(Being salaries paid)
Jan.28	Cash A/c	Dr.		7,000
	To Sales A/c				7,000
	(Being goods sold for cash)
Jan.29	Rupali's A/c	Dr.		12,000
	To Bank A/c	Dr.			12,000
	(Being cheque issued to Rupali)
Jan.30	Drawings A/c	Dr.		4,000
	To Purchase A/c				4,000
	(Being goods withdrawn for personal use)
Jan.31	General Expenses A/c	Dr.		500
	To Cash A/c				500
	(Being expenses paid by cash)
		Total		2,57,500	2,57,500

Ledger

Dr.

Cash Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.01	To Balance b/d		6,000	Jan.25	By Rupali A/c		18,000
Jan.04	To Sales A/c		10,000	Jan.26	By Cartage A/c		1,000
Jan.14	To Karuna A/c		13,000	Jan.27	By Salaries A/c		8,000
Jan.16	To Heena A/c		3,000	Jan.31	By General Expenses A/c		500
Jan.28	To Sales A/c		7,000	Jan.31	By Balance c/d		11,500
			39,000				39,000

Dr.

Capital Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Balance c/d		1,05,000	Jan.01	By Balance b/d		1,05,000
			1,05,000				1,05,000

Dr.

Bank Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.01	To Balance b/d		55,000	Jan.15	By Rohan A/c		6,000
Jan.20	To Tarun A/c		10,000	Jan.29	By Rupali A/c		12,000
Jan.22	To Heena A/c		2,000	Jan.31	By Balance c/d		49,000
			67,000				67,000

Dr.

Stock Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.01	To Balance b/d		40,000	Jan.31	By Balance c/d		40,000
			40,000				40,000

Dr.

Rohan's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.15	To Bank A/c		6,000	Jan.01	By Balance c/d		6,000
			6,000				6,000

Dr.

Tarun's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.01	To Balance b/d		10,000	Jan.20	By Bank A/c		10,000
			10,000				10,000

Dr.

Sales Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Balance c/d		37,000	Jan.03	By Karuna A/c		15,000
				Jan.04	By Cash A/c		10,000
				Jan.06	By Heena A/c		5,000
				Jan.28	By Cash A/c		7,000
			37,000				37,000

Dr.

Karuna's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.03	To Sales A/c		15,000	Jan.10	By Sales Return A/c		2,000
				Jan.14	By Cash A/c		13,000
			15,000				15,000

Dr.

Heena's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.06	To Sales A/c		5,000	Jan.16	By Cash A/c		3,000
				Jan.22	By Bank A/c		2,000
			5,000				5,000

Dr.

Purchase Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.08	To Rupali A/c		30,000	Jan.30	By Drawings A/c		4,000
				Jan.31	By Balance c/d		26,000
			30,000				30,000

Dr.

Rupali's Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.25	To Cash A/c		18,000	Jan.08	By Purchases A/c		30,000
Jan.29	To Bank A/c		12,000
			30,000				30,000

Dr.

Sales Return Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.10	To Karuna A/c		2,000	Jan.31	By Balance c/d		2,000
			2,000				2,000

Dr.

Cartage Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.26	To Cash A/c		1,000	Jan.31	By Balance c/d		1,000
			1,000				1,000

Dr.

Salaries Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.27	To Cash A/c		8,000	Jan.31	By Balance c/d		8,000
			8,000				8,000

Dr.

Drawings Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.30	To Purchases A/c		4,000	Jan.31	By Balance c/d		4,000
			4,000				4,000

Dr.

General Expenses Account

Cr.

Date	Particulars	J. F.	Amount (₹)	Date	Particulars	J. F.	Amount (₹)
2017				2017
Jan.31	To Cash A/c		500	Jan.31	By Balance c/d		500
			500				500

39. Record journal entries for the following transactions in the books of Anudeep of Delhi:

(a) Bought goods ₹2,00,000 from Kanta of Delhi (CGST@ 9%, SGST @ 9%)

(b) Bought goods ₹1,00,000 for cash from Rajasthan (IGST @ 12%)

(c) Sold goods ₹1,50,000 to Sudhir of Punjab (IGST @ 18%)

(d) Paid for Railway Transport ₹10,000 (CGST @ 5% SGST @ 5%)

(e) Sold goods ₹1,20,000 to Sidhu of Delhi (CGST @ 9% SGST @ 9%)

(f) Bought Air-Conditioner for office use ₹60,000 (CGST@ 9%, SGST @ 9%)

(g) Sold goods ₹1,50,000 for cash to Sunil of Uttar Pradesh (IGST @ 18%)

(h) Bought Motor Cycle for business use ₹50,000 (CGST 14%, SGST @ 14%)

(i) Paid for Broadband services ₹4,000 (CGST @ 9%, SGST @ 9%)

(j) Bought goods ₹50,000 from Rajesh, Delhi (CGST @ 9%, SGST @ 9%)

Ans.

In the Books of Anudeep

Journal Entries

Date	Particulars		L. F.	Amount (Dr.) (₹)	Amount (Cr.) (₹)
2017
(a)	Purchases A/c	Dr.		2,00,000
	Input CGST A/c	Dr.		18,000
	Input SGST A/c	Dr.		18,000
	To Kanta's A/c				2,36,000
	(Being goods purchased on credit locally)
(b)	Purchases A/c	Dr.		1,00,000
	Input IGST A/c	Dr.		12,000
	To Cash A/c				1,12,000
	(Being goods purchased in cash from Rajasthan)
(c)	Sudhir A/c	Dr.		1,77,000
	To Sales A/c				1,50,000
	To Output IGST A/c				27,000
	(Being goods supplied on credit to Punjab)
(d)	Transport Charges A/c	Dr.		10,000
	Input CGST A/c	Dr.		500
	Input SGST A/c	Dr.		500
	To Bank A/c				11,000
	(Being transport charges paid)
(e)	Sidhu A/c	Dr.		1,41,600
	To Sales A/c				1,20,000
	To Output CGST A/c				10,800
	To Output SGST A/c				10,800
	(Being goods sold on credit locally)
(f)	Air Conditioner A/c	Dr.		60,000
	Input CGST A/c	Dr.		5,400
	Input SGST A/c	Dr.		5,400
	To Bank A/c				70,800
	(Being goods purchased locally)
(g)	Cash A/c	Dr.		1,77,000
	To Sales A/c				1,50,000
	To Output IGST A/c				27,000
	(Being goods supplied on credit to Uttar Pradesh)
(h)	Motor Cycle A/c	Dr.		50,000
	Input CGST A/c	Dr.		7,000
	Input SGST A/c	Dr.		7,000
	To Bank A/c				64,000
	(Being motorcycle purchased locally for office use)
(i)	Internet Charges A/c	Dr.		4,000
	Input CGST A/c	Dr.		360
	Input SGST A/c	Dr.		360
	To Bank A/c				4,770
	(Being broadband charges paid)
(j)	Purchases A/c	Dr.		50,000
	Input CGST A/c	Dr.		4,500
	Input SGST A/c	Dr.		4,500
	To Rajesh’s A/c				59,500
	(Being goods purchased on credit locally)
(k)	Purchases A/c	Dr.		50,000
	Input CGST A/c	Dr.		4,500
	Input SGST A/c	Dr.		4,500
	To Rajesh A/c				49,000
	(Being goods purchased on credit locally)
(l)	Output IGST A/c	Dr.		54,000
	Output CGST A/c	Dr.		12,000
	Output SGST A/c	Dr.		12,000
	To Input IGST A/c				12,000
	To Input CGST A/c				33,000
	To Input SGST A/c				33,000
	(Being GST set off and excess of CGST and SGST to be claimed as a refund)

Working Note 1

Particulars	IGST	CGST	SGST
Output	54,000	12,000	12,000
Input	12,000	35,760	35,760
Excess	42,000	–23,760	–23,760
Set off	–42,000	21,000	21,000
Payable	Nil	–2,760(Refund)	–2,760(Refund)