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)

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