NCERT Solutions for Class 11 Accountancy Financial Accounting I Chapter 3: Recording of Transactions I

Chapter at a glance

Test Your Understanding

Question TYU – I

1. Double entry accounting requires that: (i) All transactions that create debits to asset accounts must create credits to liability or capital accounts; (ii) A transaction that requires a debit to a liability account require a credit to an asset account; (iii) Every transaction must be recorded with equal debits equal total credits.
2. State different kinds of transactions that increase and decrease capital.
3. Does debit always mean increase and credit always mean decrease?
4. Which of the following answers properly classifies these commonly used accounts: (1) Building (2) Wages (3) Credit sales (4) Credit purchases (5) Electricity charges due but not yet paid (6) Godown rent paid in advance (7) Sales (8) Fresh capital introduced (9) Drawings (10) Discount paid

Answer

1. (iii) — every transaction has equal debits and credits; a debit to an asset can also be matched by a credit to another asset or to revenue, so (i) and (ii) are not always true.

2. Capital increases with fresh capital introduced and with profit (revenues/gains). Capital decreases with drawings and with losses (expenses).

3. No. Whether a debit means increase or decrease depends on the type of account: a debit increases assets and expenses but decreases liabilities, capital and revenues.

4. (ii) — Building and prepaid rent are assets; credit purchases (creditors) and outstanding electricity are liabilities; fresh capital is capital; sales and credit sales are revenue; wages, drawings and discount paid are shown in the expense/deduction column.

3. No 4. (ii)

Question TYU – II

State the title of the accounts affected, type of account and the account to be debited and account to be credited:
1. Bhanu commenced business with cash 1,00,000
2. Purchased goods on credit from Ramesh 40,000
3. Sold goods for cash 30,000
4. Paid salaries 3,000
5. Furniture purchased for cash 10,000
6. Borrowed from bank 50,000
7. Sold goods to Sarita 10,000
8. Cash paid to Ramesh on account 20,000
9. Rent paid 1,500

Answer

Question TYU – III

Choose the Correct Answer:
1. The ledger folio column of journal is used to: (a) Record the date on which amount posted to a ledger account. (b) Record the number of ledger account to which information is posted. (c) Record the number of amounts posted to the ledger account. (d) Record the page number of the ledger account.
2. The journal entry to record the sale of services on credit should include: (a) Debit to debtors and credit to capital. (b) Debit to cash and Credit to debtors. (c) Debit to fees income and Credit to debtors. (d) Debit to debtors and Credit to fees income.
3. The journal entry to record purchase of equipment for ₹ 2,00,000 cash and a balance of ₹ 8,00,000 due in 30 days include: (a) Debit equipment for ₹ 2,00,000 and Credit cash ₹ 2,00,000. (b) Debit equipment for ₹ 10,00,000 and Credit cash ₹ 2,00,000 and creditors ₹ 8,00,000. (c) Debit equipment ₹ 2,00,000 and Credit debtors ₹ 8,00,000. (d) Debit equipment ₹ 10,00,000 and Credit cash ₹ 10,00,000.
4. When an entry is made in journal: (a) Assets are listed first. (b) Accounts to be debited listed first. (c) Accounts to be credited listed first. (d) Accounts may be listed in any order.
5. If a transaction is properly analysed and recorded: (a) Only two accounts will be used to record the transaction. (b) One account will be used to record transaction. (c) One account balance will increase and another will decrease. (d) Total amount debited will equals total amount credited.
6. The journal entry to record payment of monthly bill will include: (a) Debit monthly bill and Credit capital. (b) Debit capital and Credit cash. (c) Debit monthly bill and Credit cash. (d) Debit monthly bill and Credit creditors.
7. Journal entry to record salaries will include: (a) Debit salaries Credit cash. (b) Debit capital Credit cash. (c) Debit cash Credit salary. (d) Debit salary Credit creditors.

Answer

For Q1 the L.F. column shows the page (folio) number of the ledger account to which the entry is posted.

Question TYU – IV

Fill in the blanks:
1. Issued a cheque for ₹ 8,000 to pay rent. The account to be debited is ……
2. Collected ₹ 35,000 from debtors. The account to be credited is ……
3. Purchased office stationary for ₹ 18,000. The account to be credited is ……
4. Purchased new machine for ₹ 1,70,000 and issued cheque for the same. The account to be debited is ……
5. Issued cheque for ₹ 70,000 to pay off one of the creditors. The account to be debited is ……
6. Returned damaged office stationary and received ₹ 50,000. The account to be credited is ……
7. Provided services for ₹ 65,000 on credit. The account to be debited is ……

Answer

1. Rent 2. Debtors 3. Cash 4. Machine 5. Creditors 6. Office stationery 7. Debtors (customer)

Question TYU – V

Select Right Answer:
1. Voucher is prepared for: (i) Cash received and paid (ii) Cash/Credit sales (iii) Cash/Credit purchase (iv) All of the above
2. Voucher is prepared from: (i) Documentary evidence (ii) Journal entry (iii) Ledger account (iv) All of the above
3. How many sides does an account have? (i) Two (ii) Three (iii) one (iv) None of These
4. A purchase of machine for cash should be debited to: (i) Cash account (ii) Machine account (iii) Purchase account (iv) None of these
5. Which of the following is correct? (i) Liabilities = Assets + Capital (ii) Assets = Liabilities – Capital (iii) Capital = Assets – Liabilities (iv) Capital = Assets + Liabilities.
6. Cash withdrawn by the Proprietor should be credited to: (i) Drawings account (ii) Capital account (iii) Profit and loss account (iv) Cash account
7. Find the correct statement: (i) Credit a decrease in assets (ii) Credit the increase in expenses (iii) Debit the increase in revenue (iv) Credit the increase in capital
8. The book in which all accounts are maintained is known as: (i) Cash Book (ii) Journal (iii) Purchases Book (iv) Ledger
9. Recording of transaction in the Journal is called: (i) Casting (ii) Posting (iii) Journalising (iv) Recording

Answer

In Q7, statement (i) is also true (a decrease in an asset is credited); the NCERT key gives (iv).

Questions for Practice – Short Answers

Question SA – Q1

State the three fundamental steps in the accounting process.

Answer

1. Identifying and recording – identifying transactions of a financial nature from source documents and recording them in the journal (books of original entry).
2. Classifying – posting the journal entries to the respective ledger accounts and balancing them.
3. Summarising and communicating – preparing the trial balance and financial statements (Trading and P&L Account, Balance Sheet) and reporting them to users.

Question SA – Q2

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

Answer

1. They prove that a transaction actually took place, so entries are objective and verifiable.
2. They give the details needed for recording — date, parties, quantity, amount, terms, GST.
3. They are the basis of vouchers and of the journal entries.
4. Auditors and tax authorities verify the books against them.
5. They help detect and prevent errors and fraud and can be used as legal evidence.

Question SA – Q3

Should a transaction be first recorded in a journal or ledger? Why?

Answer

A transaction is first recorded in the journal. The journal is the book of original entry: it records each transaction in date order with both the debit and credit aspects and a narration. This gives a complete chronological record, reduces errors and makes it easy to locate any entry. The entries are then posted from the journal to the ledger (book of second entry), where they are classified account-wise.

Question SA – Q4

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

Answer

The debit is written first, against the margin, followed by “Dr.”. The credit is written on the next line, indented (moved a little to the right) and preceded by the word “To”.

Question SA – Q5

Why are some accounting systems called double accounting systems?

Answer

Because every transaction has two aspects — one account receives a benefit and another gives it — and both are recorded: one account is debited and another is credited with the same amount. This dual (double) recording is based on the dual aspect concept, so the system is called the double entry system. It keeps total debits equal to total credits and the accounting equation in balance.

Question SA – Q6

Give a specimen of an account.

Answer

Name of the Account

The left half is the debit (Dr.) side and the right half the credit (Cr.) side.

Question SA – Q7

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

Answer

Because capital is also a liability of the business — it is the amount the business owes to its owner (business entity concept). Both liabilities and capital are claims against the assets (Assets = Liabilities + Capital) and appear on the same side of the equation. Hence an increase in either is credited and a decrease is debited.

Question SA – Q8

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

Answer

The folio numbers create a cross-reference between the journal and the ledger:

1. The L.F. (ledger folio) entered in the journal shows the ledger page to which the entry has been posted, and the J.F. entered in the ledger shows the journal page from which it came.
2. They indicate that posting has been done, so no entry is left out or posted twice.
3. They make it easy to trace and check entries during verification and audit.

Question SA – Q9

What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner.

Answer

Question SA – Q10

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

Answer

A decrease in an asset is recorded as a credit. A decrease in a liability is recorded as a debit.

Questions for Practice – Long Answers

Question LA – Q1

Describe the events recorded in accounting systems and the importance of source documents in those systems?

Answer

Events recorded: Accounting records only those events (transactions) that are of a financial nature and can be measured in money, such as purchase and sale of goods, payment of expenses, receipt of income, purchase of assets, borrowing and repayment of loans, capital introduced and drawings. Events like a change in manager or employee morale are not recorded.

Source documents (cash memo, invoice/bill, receipt, pay-in slip, cheque, debit note, credit note) are written evidence of these transactions. Their importance:

1. They are the starting point of the accounting process; vouchers and journal entries are prepared from them.
2. They provide proof that the transaction is genuine, making records objective and verifiable.
3. They contain full details — date, parties, amount, terms, taxes.
4. They are used by auditors and tax authorities to verify the books.
5. They serve as legal evidence in case of disputes and help prevent fraud.

Question LA – Q2

Describe how debits and credits are used to analyse transactions.

Answer

Every transaction is analysed in four steps:

1. Identify the accounts affected (at least two).
2. Classify each account — asset, liability, capital, revenue or expense.
3. Decide the effect — whether each account increases or decreases.
4. Apply the rules:

Example: Furniture bought on credit from Ravi ₹ 20,000 — Furniture (asset) increases → debit; Ravi (liability) increases → credit. The debit and credit amounts are always equal.

Question LA – Q3

Describe how accounts are used to record information about the effects of transactions?

Answer

An account is a summarised record of all transactions relating to one item (a person, an asset, a liability, an income or an expense). It has two sides — debit (left) and credit (right).

1. After journalising, each amount is posted to the relevant account: the debit aspect on the debit side and the credit aspect on the credit side, with the date, the name of the other account and the J.F.
2. Increases are entered on one side and decreases on the other, according to the type of account.
3. At the end of the period each account is balanced: the difference between the two sides shows the net effect — for example, how much cash is left, how much a debtor owes, or the total expense on rent.
4. The balances of all accounts are used to prepare the trial balance and then the financial statements.

Thus accounts collect, classify and summarise the effects of all transactions on each item.

Question LA – Q4

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

Answer

A journal is the book of original entry in which transactions are recorded in chronological order, showing the accounts debited and credited, the amounts and a short explanation (narration).

Journal

Question LA – Q5

Differentiate between source documents and vouchers.

Answer

Question LA – Q6

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

Answer

Because of the dual aspect, every transaction affects the equation in a way that keeps Assets = Liabilities + Capital. It may increase both sides, decrease both sides, or change items within one side, but never only one side.

1. Started with cash ₹ 1,00,000 (b) Goods bought on credit ₹ 30,000 (c) Furniture for cash ₹ 10,000 (d) Goods costing ₹ 10,000 sold for ₹ 15,000 cash (e) Creditors paid ₹ 30,000 (f) Rent paid ₹ 2,000.

After every transaction total assets equal liabilities plus capital (finally ₹ 1,03,000 = ₹ 1,03,000), so the equation remains intact.

Question LA – Q7

Explain the double entry mechanism with an illustrative example.

Answer

Under the double entry system every transaction is recorded in two accounts with equal amounts — one debited and one credited — according to the rules of debit and credit. Total debits therefore always equal total credits, which allows arithmetic checking through a trial balance and gives a complete record of each account.

Example: Goods sold to Mohan on credit ₹ 8,000.

• Mohan (debtor, an asset) increases → debit Mohan A/c ₹ 8,000.
• Sales (revenue) increases → credit Sales A/c ₹ 8,000.

When Mohan later pays ₹ 8,000, Cash A/c is debited and Mohan A/c credited; Mohan’s account is then closed.

Questions for Practice – Numerical Questions

Question Num – Q1

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

Answer

Goods sold to Bhanu are on credit (Bhanu becomes a debtor); the profit of ₹ 2,000 increases capital.

Cash ₹ 1,60,000 + Goods ₹ 30,000 + Debtors ₹ 12,000 + Furniture ₹ 7,000 = ₹ 2,09,000; Creditors ₹ 7,000 + Capital ₹ 2,02,000 = ₹ 2,09,000

Question Num – Q2

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

Answer

Cash ₹ 2,39,000 + Furniture ₹ 35,000 + Goods ₹ 20,000 = ₹ 2,94,000; Creditors ₹ 40,000 + Capital ₹ 2,54,000 = ₹ 2,94,000

Question Num – Q3

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

Answer

Goods from Rohit are on credit; paying ₹ 48,500 for a debt of ₹ 50,000 gives a discount (gain) of ₹ 1,500, which increases capital.

Cash ₹ 1,32,500 + Goods ₹ 32,500 + Furniture ₹ 10,000 = ₹ 1,75,000; Capital ₹ 1,75,000 = ₹ 1,75,000

Question Num – Q4

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 for ₹ 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.

Answer

A car bought for personal use is drawings (reduces capital). Commission received in advance is a liability.

Cash ₹ 17,500 + Machinery ₹ 40,000 + Goods ₹ 15,000 = ₹ 72,500; Comm. recd. in advance ₹ 2,000 + Capital ₹ 70,500 = ₹ 72,500

Question Num – Q5

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

Answer

Cash ₹ 1,21,700 + Goods ₹ 4,500 + Prepaid insurance ₹ 1,000 = ₹ 1,27,200; Outstanding salary ₹ 2,000 + Capital ₹ 1,25,200 = ₹ 1,27,200

Note: The cash balance works out to ₹ 1,21,700; the ₹ 1,21,200 printed in the textbook answer is a misprint (with it the two sides would not balance).

Question Num – Q6

Show the accounting equation on the basis of the following transaction: (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

Answer

Cash ₹ 2,92,000 + Goods ₹ 1,25,000 + Building ₹ 1,92,000 + Debtors ₹ 6,000 = ₹ 6,15,000; Creditors ₹ 30,000 + O/s rent ₹ 5,000 + Rent recd. in adv. ₹ 5,000 + Capital ₹ 5,75,000 = ₹ 6,15,000

Question Num – Q7

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 house hold 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

Answer

Household expenses paid from business cash are drawings.

Cash ₹ 37,000 + Shares ₹ 50,000 + Goods ₹ 25,000 + Bank ₹ 20,000 = ₹ 1,32,000; Capital ₹ 1,32,000 = ₹ 1,32,000

Question Num – Q8

Show the effect of following transaction 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

Answer

3. is a cash sale. In (f) discount received ₹ 2,000 increases capital; in (h) discount allowed ₹ 1,000 reduces capital.

Cash ₹ 2,42,000 + Goods ₹ 1,43,000 + Building ₹ 1,90,000 + Prepaid ins. ₹ 2,000 = ₹ 5,77,000; Creditors ₹ 10,000 + O/s rent ₹ 3,000 + Capital ₹ 5,64,000 = ₹ 5,77,000

Question Num – Q9

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

Answer

Cash ₹ 78,200 + Goods ₹ 33,000 + Furniture ₹ 10,000 + Debtors ₹ 9,000 = ₹ 1,30,200; Capital ₹ 1,30,200 = ₹ 1,30,200

Question Num – Q10

Bobby opened a consulting firm and completed these transactions during November, 2017: (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 ₹ 3,00,000. (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) Purchase 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.

Answer

Analysis of transactions

The salary in (f) is read as ₹ 7,500 (printed “₹ 75,00”). In (j) the new equipment costs ₹ 1,00,000: ₹ 93,000 cash plus old equipment of ₹ 7,000.

T-accounts

Cash A/c

Client A/c

Office Supplies A/c

Motor Car A/c

Building A/c

Land A/c

Long-term Note Payable A/c

Capital A/c

Withdrawals A/c

Salary Expense A/c

Utilities Expense A/c

Office Equipment A/c

Accounts Payable A/c

Service Revenue A/c

Question Num – Q11

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

Answer

Journal

Question Num – Q12

Enter the following Transactions in the Journal of Mudit (2017):
Jan 01 Commenced business with cash ₹ 1,75,000 and 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 ₹ 300

Answer

“Goods purchased for Sudhir” means bought on credit from Sudhir. The discount on payment to Sudhir is discount received (the textbook prints “allowed”).

Journal

Question Num – Q13

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

Answer

Journal

Question Num – Q14

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.

Answer

Journal

Question Num – Q15

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. (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

Answer

Journal

Question Num – Q16

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 ₹ 30,000
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

Answer

Goods brought in by the owner are debited to Stock A/c.

Journal

Ledger

Cash A/c

Stock A/c

Capital A/c

Purchases A/c

Harish A/c

Sales A/c

Furniture A/c

Sundry Expenses A/c

Bank A/c