Recording of Transactions - II

Questions For Practice

Short Answers
1. Briefly state how the cash book is both journal and a ledger.
Ans) Cash book is journal in the sense that all cash transactions are primarily recorded in the cash book with narration and therefore, these
are posted to the relevant accounts in the ledger. Cash book is also ledger in the sense that it serves the purpose of cash account and bank
account (in case of triple column cash book)
2. What is the purpose of contra entry?
Ans) The purpose of Contra Entry is to record reverse or offset an entry on the other side of an account. If a debit entry is recorded in an
account, contra entry will be recorded on the credit side and vice-versa.
Debit and credit aspects of a single transaction are entered in the same account, but in different columns. Each entry in this case is viewed as
a contra entry of the other.
3. What are special purpose books?
Ans) Special purpose books are :
1. Cash Book
2. Purchases Book
3. Purchases Return (Return Outwards) Book
4. Sales Book
5. Sales Return (Return Inwards) Book
6. Journal Proper
4. What is petty cash book? How it is prepared?
Ans) Businesses generally keep small amounts of cash to meet small miscellaneous payments such as entertainment expenses and stationery
costs. Such payments are generally recorded in the book called as petty cash. It is prepared by imprest system whereby an amount is paid in
advance called as 'Float' & it is a fixed amount. This is the maximum amount of cash that can be held at any time. Each time cash level runs
low, the petty cash imprest is injected with cash by drawing a cheque. The amount of reimbursement is equal to the expenses paid through
petty cash since the time of last reimbursement. Petty cash balance after reimbursement reverts to back to the level of the float.

5. Explain the meaning of posting of journal entries?

Ans) Posting is the process of transferring the entries from the books of original entry (journal) to the
ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful conclusion
and to further the accounting process.
6. Define the purpose of maintaining subsidiary journal.
Ans) Subsidiary books are maintained because it may be impossible to record each transaction into the ledger as it occurs. Subsidiary books
record the details of the transactions and therefore help the ledger to become brief. Future reference and any desired analysis becomes easy
as transactions of similar nature are recorded together in subsidiary books.
7. Write the difference between return Inwards and return outwards.
Ans ) Return Outwards:
Faulty or wrong goods that the business returns back to suppliers.
Return Inwards:
Faulty or wrong goods that the customers return back to the business
8. What do you understand by ledger folio?
Ans ) Ledger folio is page number of an entry in the company's ledger. A ledger folio in accounting is often abbreviated LF.
9. What is difference between trade discount and cash discount?
Ans)
Cash Discount

Trade Discount

Is a reduction granted by
Is a reduction granted by supplier from the list price
supplier from the invoice of goods or services on
price in consideration of business consideration re:
immediate or prompt
buying in bulk for goods
payment
and longer period when in
terms of services

As an incentive in credit
management to
encourage prompt
payment

Allowed to promote the

sales

Not shown in the

supplier bill or invoice

Shown by way of
deduction in the invoice
itself

Cash discount account is Trade discount account is

opened in the ledger
not opened in the ledger
Allowed on payment of
money

Allowed on purchase of
goods

It may vary with the time

period within which
payment is received

It may vary with the

quantity of goods
purchased or amount of
purchases made

10. Write the process of preparing ledger from a journal.

Ans) The complete process of posting from journal to ledger is as follows:
Step 1 : Locate in the ledger, the account to be debited as entered in the journal.
Step 2 : Enter the date of transaction in the date column on the debit side.
Step 3 : In the Particulars column write the name of the account through
which it has been debited in the journal.
Step 4 : Enter the page number of the journal in the folio column and in the
journal write the page number of the ledger on which a particular account appears.
Step 5 : Enter the relevant amount in the amount column on the debit side.
It may be noted that the same procedure is followed for making the entry on
the credit side of that account to be credited. An account is opened only once
3

in the ledger and all entries relating to a particular account is posted on the
debit or credit side, as the case may be.
11. What do you understand by Imprest amount in petty cash book?
Ans) Imprest amount in petty cash book an amount paid in advance called as 'Float' & it is a fixed amount. This is the maximum amount of
cash that can be held at any time. Each time cash level runs low, the petty cash imprest is injected with cash by drawing a cheque. The amount
of reimbursement is equal to the expenses paid through petty cash since the time of last reimbursement. Petty cash balance after
reimbursement reverts to back to the level of the float.
Long Answers
1. Explain the need for drawing up the special purpose books.
Ans) A small business may be able to record all its transactions in one book only, i.e., the journal. But as the business expands and the
number of transactions becomes large, it may become cumbersome to journalise each transaction. For quick, efficient and accurate recording
of business
transactions, Journal is sub-divided into special journals. Many of the business transactions are repetitive in nature. They can be easily
recorded in special journals, each meant for recording all the transactions of a similar nature. For example, all cash transactions may be
recorded in one book, all credit sales transactions in another book and all credit purchases transactions in yet another book and so on.
These special journals are also called daybooks or subsidiary books. Transactions that cannot be recorded in any special journal are recorded
in journal called the Journal Proper. Special journals prove economical and make division of labour possible in accounting work.
Q.2. What is n Cash Book? Explain the types of cash book.
Ans) Cash book is used to record cash receipts and cash payments side by side. Cash book is ruled like a ledger account with the debit and
credit sides and the balance represents cash in hand at the end of accounting period. Besides being a book of original entry, the Cash Book
also serves as a ledger account. As such there is no need to open a separate cash account in the ledger. The basic form of Cash Book
remaining the same, additional columns may be provided on either side, if necessary. Cash book may be of following types: (i) Simple Cash
Book Simple Cash Book has only one amount column on each side. This book serves the purpose of cash account. It is suited to concerns
which have only cash transactions. (ii) Two-column Cash Book Two-column Cash Book has two amount columns: one for cash and another
for Bank on each side. This book serves the purpose of cash account as well as Bank account. It is suited to concerns which have cash
transactions and banking transactions. A business concern need not maintain a separate account for the banking transactions. At the end of
the accounting period the cash book reveals not only cash in hand but balance at bank also. There may be a two-column cash book containing
cash column and discount column also. On the debit side, all cash receipts and discount allowed to customers arc recorded. On the credit side,
4

all cash payments and discount received from creditors are recorded (iii) Three-column Cash Book Three-column Cash Book is prepared
when there are a large number of cash and banking transactions. This Cash Book has three amount columns on each side, namely: cash
column, bank column and discount column. (iv) Petty Cash Book In order to make the task of the cashier easy. A petty cashier is appointed
and handed over a small sum of money. He meets out small payments like stationery, postage, conveyance cartage etc. At the end of the
given period, the petty cashier submits the account to the cashier who reimburses him for payments.
Q.3. What is contra entry ? How can you deal this entry while preparing double column Cash Book?
Ans) Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an
account, contra entry will be recorded on the credit side and vice-versa.
Debit and credit aspects of a single transaction are entered in the same account, but in different columns. Each entry in this case is viewed as
a contra entry of the other.
Just like cash transactions, all payments into the bank are recorded on the left side and all withdrawals/
payments through the bank are recorded on the right side of two column cash book. When cash is
deposited in the bank or cash is withdrawn from the bank, both the entries are recorded in the two column cash book. This is so because both
aspects of the transaction appear in the two column cash book itself. When cash is paid into the bank, the amount deposited is written on the
left side in the bank column and at the same time the same amount is entered on the right side in the cash column. The reverse entries are
recorded when cash is withdrawn from the bank for use in the office. Against such entries the word C, which stands for contra is written in the
L.F. column indicating that these entries are not to be posted to the ledger account.
Q.4. What is petty cash book ? Write the Advantages of petty cash book.
Ans) Petty cash book may be defined as a specialised cash book which is used by a petty cashier to record all the small payments such as
cartage. postage. stationery. conveyance etc. Following are the advantages of maintaining a petty cash book : (1) Saving of time The head
cashier is not bothered to make petty expenses and record their entries. This saves his time which can be utilised for other important matters.
(2) Saving of labour Petty Cash Book saves the labour of head cashier in recording each and every entry in Cash Book and posting them to
the ledger accounts. (3) Simple to adopt This is a simple method. Imprest system of petty cash facilitates its easy use. (4) Lesser mistakes
Since the petty cash book is maintained separately. the possibility of mistakes is reduced. The head cashier can check the accuracy of every
entry. (5) Control over payments The head cashier supervises the maintenance of petty cash book and verifies the different payments from
vouchers This reduces the chances of fraud and wrong payment.
Q.5. Describe the advantages of sub-dividing the journal.
Ans)Following arc the advantages of sub-division of journal i.e.. subsidiary books :

(1)The most important advantage of the sub-division of journal is that it permits division of labour which is very necessary in a large
organisation. The process of recording can be divided among several persons. each of whom is responsible for particular type of transactions.
(2)Since, there is a separate book for each class of transactions. The information relating to each class of transactions is available at one
place. Sub-division of journal provides classified information. Periodical details of important business transactions can be known very easily.
(3)Various accounting processes may be undertaken simultaneously because of the use of a number of books. This will lead to the work being
completed quickly and efficiently. (4)Errors and mistakes if any, in entering transactions can be located easily from subsidiary books. (5)There
is less wastage of stationery- because there will be no repetition of journal entries. The record can be made much briefer and a great amount of
clerical effort and stationery can be saved.
Q.6. What do you understand by balancing of account ?
Ans) Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with the object of ascertaining the net
position of each amount. Balancing of an account means that the two sides are totaled and the difference between them is shown on the side,
which is shorter in order to make their totals equal. The words balance c/d are written against the amount of the difference between the two
sides. The amount of balance is brought (b/d) down in the next accounting period indicating that it is a continuing account, till finally settled or
closed.
Numerical Questions
1. Enter the following transactions in a simple cash book for December 2005:
01 Cash in hand
05 Cash received from Bhanu
07 Rent Paid
10 Purchased goods Murari for cash
15 Sold goods for cash
18 Purchase stationery
22 Cash paid to Rahul on account
28 Paid salary
30 Paid rent

Rs.
12,000
4,000
2,000
6,000
9,000
300
2,000
1,000
500
(Ans. Cash in hand Rs. 13,200)

Solution:
Dr.
Date

Particulars

Cash book
L.
Amount
Date
F

P
2005
12,000
07 Dec

2005
01 Dec

To Balance b/d

05 Dec

To Bhannu

4,000

To Sales A/C

9,000

15 Dec

Particulars

2,000

10 Dec

By Purchase A/C

6,000

18 Dec

By Stationery A/C

300

22 Dec

By Rahul

2,000

28 Dec

By Salary A/C

1,000

30 Dec

By Rent A/C

500

31 Dec

By Balance c/d

13,200
25,000

2. Record the following transaction in simple cash book for November 2005:

L.
F

By Rent A/C

25,000

01 Cash in hand
04 Cash paid to Hari
07 Purchased goods
12 Cash received from Amit
16 Sold goods for cash
20 Paid to Manish
25 Paid cartage
31 Paid salary

Cr.
Amount

Rs
12,500
600
800
1,960
800
590
100
1,000
(Ans. Cash in hand Rs. 12,170)

Solution:
Dr.
Date

Particulars

Cash book
L.
Amount
Date
F

P
2005
12,500
04 Nov

2005
01 Nov

To Balance b/d

12 Nov

To Amit

1,960

To Sales A/C

800

16 Nov

Particulars

600

07 Nov

By Purchase A/C

800

20 Nov

By Manish

590

25 Nov

By Cartage A/C

100

31 Nov

By Salary A/C

1,000

31 Nov

By Balance c/d

12,170
15,260

3. Enter the following transaction in Simple cash book for December 2005 :

L.
F

By Hari

15,260

01 Cash in hand
06 Paid to Sonu
08 Purchased goods
15 Received cash from Parkash
20 Cash sales
25 Paid to S.Kumar
30 Paid rent

Cr.
Amount

Rs.
7,750
45
600
960
500
1,200
600
(Ans. Cash in hand Rs. 6,765)

Solution:
Dr.
Date

Particulars

Cash book
L.
Amount
Date
F

P
2005
7,750
06 Dec

2005
01 Dec

To Balance b/d

15 Dec

To Parkash

960

To Sales A/C

500

20 Dec

Particulars

L.
F

By Sonu

45

08 Dec

By Purchase A/C

600

25 Dec

By S.Kumar

1,200

30 Dec

By Rent A/C

600

31 Dec

By Balance c/d

6,765

9,210

4. Record the following transactions in a bank column cash book for December 2005:
Rs.
01 Started business with cash
80,000
04 Deposited in bank
50,000
10 Received cash from Rahul
1,000
15 Bought goods for cash
8,000
22 Bought goods by cheque
10,000
25 Paid to Shyam by cash
20,000
30 Drew from Bank for office use
2,000
31 Rent paid by cheque
1,000
(Ans. Cash in hand Rs. 5,000: cash at bank Rs. 37,000)

Cr.
Amount

9,210

Solution:
Dr.
Date

Particulars

2005
01 Dec

To Balance b/d

04 Dec

To Cash A/C

10 Dec

To Rahul

30 Dec

To Bank A/C

L.F

Bank Column Cash book

Amount
Date
Particulars
Cash
Bank

2005
80,000
04 Dec
By Bank A/C

50,000

15 Dec

By Purchase A/C

1,000

22 Dec

By Purchase A/C

2,000

25 Dec

By Shyam

30 Dec

By Cash A/C

30 Dec

By Rent A/C

31 Dec

By Balance c/d

83,000

L.F
Cash

Bank

50,000
8,000
10,000
20,000

2,000
1,000

50,000

5. Prepare a double column cash book with the help of following information for December 2005 :
Rs.
1,20,000
50,000
20,000
20,000
20,000

01 Started business with cash

03 Cash paid into bank
05 Purchased goods from Sushmita
06 Sold goods to Dinker and received a cheque
10 Paid to Sushmita cash
14 Cheque received on December 06, 2005 deposited into bank
18 Sold goods to Rani
12,000
20 Cartage paid in cash
500
22 Received cash from Rani
12,000
27 Commission received
5,000
30 Drew cash for personal use
2,000
(Ans. Cash in hand Rs. 64,500 : Cash at bank Rs. 70,000)
10

Cr.
Amount

5,000

37,000

83,000

50,000

Solution:
Dr.
Date

Particulars

2005
01 Dec

To Balance b/d

03 Dec

To Cash A/C

06 Dec

To Dinker

14 Dec

To Cash A/C

22 Dec

To Rani

27 Dec

To Commission A/C

L.F

Double Column Cash book

Amount
Date
Particulars
Cash
Bank

2005
1,20,000
03 Dec
By Bank A/C

50,000

10 Dec

By Sushmita

14Dec

By Bank A/C

20 Dec

By Cartage A/C

12,000

30 Dec

By Drawings A/C

5,000

31 Dec

By Balance c/d

20,000

20,000

1,57,000

Cr.
Amount

L.F
Cash

50,000
20,000

70,000

20,000
500
2,000
64,500

70,000

1,57,000

70,000

6. Enter the following transactions in double column cash book of M/s Ambica Traders for November 2005:
Rs.
50,000
30,000
10,000
5,000
7,000
8,000

01 Commenced business with cash

03 Opened bank account with ICICI
05 Purchased goods for cash
10 Purchased office machine for cash
15 Sales goods on credit from Rohan and received cheque
18 Cash sales
20 Rohans cheque deposited into bank
22 Paid cartage by cheque
500
25 Cash withdrawn for personal use
2,000
30 Paid rent by cheque
1,000
(Ans. Cash in hand Rs. 11,000, Cash at bank Rs. 35,500)
11

Bank

Solution:
Dr.
Date

Particulars

2005
01 Nov

To Balance b/d

03 Nov

To Cash A/C

L.F

Double Column Cash book

Amount
Date
Particulars
Cash
Bank

2005
50,000
03 Nov
By Bank A/C

30,000

10,000
5,000

7,000

10 Nov

By Office Machine A/C

18 Nov

To Sales A/C

8,000

20 Nov

By Bank A/C

20 Nov

To Cash A/C

22 Nov

By Cartage A/C

25 Nov

By Drawings A/C

30 Nov

By Rent A/C

31 Nov

By Balance c/d

65,000

12

7,000
500
2,000
1,000

37,000

7. Prepare double column cash book from the following information for September 2005:
01 Cash In hand
Bank overdraft
03 Paid wages
05 Cash sales
10 Cash deposited into bank
15 Goods purchased and paid by cheque
20 Paid rent
25 Drew from bank for personal use
30 Salary paid

30,000

By Purchase A/C

To Sales A/C

7,000

05 Nov

15 Nov

L.F

Cr.
Amount
Cash
Bank

Rs.
7,500
3,500
200
7,000
4,000
2,000
500
400
1,000

11,000

35,500

65,000

37,000

(Ans. Cash in hand Rs. 8,800, Bank overdraft Rs. 1,900)

Solution:
Dr.
Date

To Balance b/d

Double Column Cash book

Amount
Date
Particulars
Cash
Bank

2005
7,500
01 Sep
By Balance b/d

05 Sep

To Sales A/C

7,000

10 Sep

To Bank A/C

31 Nov

To Balance c/d

2005
01 Sep

Particulars

L.F

14,500

Cr.
Amount
Cash
Bank

L.F

3,500

03 Sep

By Wage A/C

4,000

10 Sep

By Bank A/C

1,900

15 Sep

By Purchases A/C

20 Sep

By Rent A/C

25 Sep

By Drawings A/C

30 Sep

By Salary A/C

1,000

31 Nov

By Balance c/d

8,800

5,900

200

4,000
2,000
500
400

14,500

8. Enter the following transaction in a double column cash book of M/s.Mohit Traders for January 2005 :
01 Cash in hand
Bank overdraft
03 Goods purchased for cash
05 Paid wages
10 Cash sales
15 Deposited into bank
22 Sold goods for cheque which was deposited into
bank same day
13

Rs.
3,500
2,300
1,200
200
8,000
6,000
2,000

5,900

25 Paid rent by cheque

28 Drew from bank for personal use
31 Bought goods by cheque
Solution:
Dr.
Date

1,200
1,000
1,000
(Ans. Cash in hand Rs. 4,100 Cash at bank Rs. 2,500)

To Balance b/d

Double Column Cash book

Amount
Date
Particulars
Cash
Bank

2005
3,500
01 Jan
By Balance b/d

10 Jan

To Sales A/C

8,000

15 Jan

To Cash A/C

22 Jan

To Sales A/C

2005
01 Jan

Particulars

L.F

11,500

Cr.
Amount
Cash
Bank

L.F

2,300

03 Jan

By Purchases A/C

1,200

6,000

05 Jan

By wages A/C

200

2,000

15 Jan

By Bank A/C

25 Jan

By Rent A/C

1,200

28 Jan

By Drawings A/C

1,000

31 Jan

By Purchases A/C

1,000

31 Jan

By Balance c/d

8,000

6,000

4,100

2,500

11,500

8,000

9. Prepare double column cash book from the following transactions for the year December 2005:
01 Cash in hand
Cash at bank
03 Purchased goods for cash
05 Received cheque from Jasmeet
08 Sold goods for cash
10 Jasmeets cheque deposited into bank
14

Rs.
17,500
5,000
3,000
10,000
7,000

12 Purchased goods and paid by cheque

15 Paid establishment expenses through bank
18 Cash sales
20 Deposited into bank
24 Paid trade expenses
27 Received commission by cheque
29 Paid Rent
30 Withdrew cash for personal use
31 Salary paid
Solution:
Dr.
Date

20,000
1,000
7,000
10,000
500
6,000
2,000
1,200
6,000
(Ans. Cash in hand Rs. 8,800 cash at bank Rs. 10,000)
Double Column Cash book

Particulars

L.F

Amount
Cash

2005
01 Dec

To Balance b/d

17,500

05 Dec

To Jasmeet

08 Dec

To Sales A/C

10 Dec

To Cash A/C

15 Dec

To Sales A/C

20 Dec
27 Dec

To Cash A/C

Particulars

L.F

Amount

Bank

Cash

Bank

2005
03 Dec

By Purchases A/C

10,000

10 Dec

By Bank A/C

7,000

12 Dec

By Purchases A/C

20,000

15 Dec

By Establishment Expenses
A/C

1,000

20 Dec

By Bank A/C

20 Dec

By Trade ExpensesA/C

500

29 Dec

By Rent A/C

2,000

29 Dec

By Drawings A/C

1,200

29 Dec

By Salary A/C

6,000

31 Dec

By Balance c/d

8,800

10,000

41,500

31,000

5,000

10,000

3,000

10,000

7,000

10,000

10,000

To Commission A/C

6,000

41,500

15

Date

Cr.

31,000

10. M/s Ruchi trader started their cash book with the following balances on Dec.
01 2005 : cash in hand Rs.1,354 and balance in bank current account Rs.7560.
He had the following transaction in the month of December, 2005:
Rs.
2,300
6,000
10,000
700
20,000
15,000
10,000
7,000

03 Cash sales
05 Purchased goods, paid by cheque
08 Cash sales
12 Paid trade expenses
15 Sales goods, received cheque(deposited same day)
18 Purchased motor car paid by cheque
20 Cheque received from Manisha(deposited same day)
22 Cash Sales
25 Manishas cheque returned dishonoured
28 Paid Rent
2,000
29 Paid telephone expenses by cheque
500
31 Cash withdrawn for personal use
2,000
Prepare bank column cash book
(Ans. Cash in hand Rs. 15,954 cash at bank Rs. 6,060)

16

Solution:
Dr.
Date

Bank Column Cash book

Particulars

L.F

Amount
Cash

2005
01 Dec

To Balance b/d

1,354

03 Dec

To Sales A/C

08 Dec

To Sales A/C

15 Dec

To Sales A/C

20 Dec

To Manisha

22 Dec

To Sales A/C

Date

Cr.
Particulars

L.F

Bank

2005
05 Dec

By Purchases A/C

2,300

12 Dec

By Trade Expenses A/C

10,000

18 Dec

By Motor Car A/C

15,000

20,000

25 Dec

By Dishonoured Cheque

10,000

10,000

28 Dec

By Rent A/C

29 Dec

By Telephone Expenses A/C

31 Dec

By Drawings A/C

2,000

31 Dec

By Balance c/d

15,954

6,060

20,654

31,000

7,560

7,000

20,654

6,000

37,560

Rs.

17

700

2,000

Petty Cash Book

11. Prepare petty cash book from the following transactions. The imprest amount is Rs.2,000.
January
01 Paid cartage
02 STD charges
02 Bus fare
03 Postage
04 Refreshment for employees
06 Courier charges
08 Refreshment of customer

Amount
Cash
Bank

50
40
20
30
80
30
50

500

10 Cartage
15 Taxi fare to manager
18 Stationery
20 Bus fare
22 Fax charges
25 Telegrams charges
27 Postage stamps
29 Repair on furniture
30 Laundry expenses
31 Miscellaneous expenses

35
70
65
20
30
35
200
105
115
100
(Ans. Cash balance Rs. 925)

Solution:
Dr.
Receipts

2,000

Petty Cash Book

Date

Voucher
No.

Particulars

Total

P
Jan
01
01
02
02
03
04
06
08
10
15
18
20
22
25
27
29
30
31

To Cash A/C
By Cartage
By STD charges
By Bus fare
By Postage
By Refreshment
By Courier Charges
By Refreshment
By Cartage
By Taxi fare
By Stationery
By Bus fare
By Fax charges
By Telegrams
charges
By Postage stamps
By Repair
By Laundry
By Miscellaneous

50
40
20
30
80
30
50
35
70
65
20
30

18

By Balance c/d

Telephone
Charges

925

Postage
Charges

Travelling
Charges

Refreshment

Stationery
Charges

Repairs

Laundry
Expense

Miscellaneous
Expense

50
40
20
30
80
30
50
35
70
65
20
30

35
200
105
115
100
1075

31

Cartages

Cr.

35
200
105
115
100
85

70

295

110

130

65

105

115

100

2,000

2,000
Feb
01
01

925
1075

To Balance b/d
To Cash

12. Record the following transactions during the week ending Dec.30, 2005 with a weekly imprest Rs. 500
Rs.
100
12
40
80
90
80
(Ans. Cash balance Rs. 98)

24 Stationery
25 Bus fare
25 Cartage
26 Taxi fare
27 Wages to casual labour
29 Postage
Solution:
Dr.
Receipts

500

Petty Cash Book

Date

Voucher
No.

Particulars

P
2005
Dec
01
24
25
25
26
27
29

31

To Cash A/C
By Stationery
By Bus Fare
By Cartage
By Taxi fare
By Wages
By Postage

100
12
40
80
90
80

By Balance c/d

402
98

500

98
402
19

Total

500
2006
Jan 1
01
01

To Balance b/d
To Cash

Cr.
Cartages

Postage
Charges

Travelling
Charges

Wages

Stationery
Charges

100
12
40
80
90
80
40

80

92

90

100

Other Subsidiary Books

13. Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2005 :
01 Bought from Rahul Traders as per invoice no.20041
40 Registers @ Rs.60 each
80 Gel Pens @ Rs.15 each
50 note books @ Rs.20 each
Trade discount 10%.
15 Bought from Global Stationers as per invoice no.1132
40 Ink Pads @ Rs.8 each
50 Files @ Rs.10 each
20 Color Books @ Rs. 20 each
Trade Discount 5%
23 Purchased from Lamba Furniture as per invoice no.3201
2 Chairs @ 600 per chair
1 Table @ 1000 per table
25 Bought from Mumbai Traders as per invoice no.1111
10 Paper Rim @ Rs.100 per rim
400 drawing Sheets @ Rs.3 each
20 Packet water colour @ Rs.40 per packet
(Ans: Total of purchases book Rs. 8,299)
Solution :
Purchase Journal (Book)
Date Invoi Name of Supplier
L.
Amount
ce
(Account to be credited)
F.
No.
Details
Total

2005
July
01
2004 Rahul Traders:
2,400
1
40 Registers @ Rs.60 each
1,200
80 Gel Pens @ Rs.15 each
1,000
50 note books @ Rs.20 each
4,600
Less: Trade discount 10%
(460)
4,140
20

15

Global Stationers :
40 Ink Pads @ Rs.8 each
1132 50 Files @ Rs.10 each
20 Color Books @ Rs. 20 each

320
500
400
1220
(61)

Less :Trade Discount 5%

25

Mumbai Traders:
1111 10 Paper Rim @ Rs.100 per rim
400 drawing Sheets @ Rs.3 each
20 Packet water colour @ Rs.40 per
packet
Purchase A/C

Dr.

1,159

1,000
1,200
800

3,000
8,299

14. Enter the following transactions in sales (journal) book of M/s.Bansal electronics:
September
01 Sold to Amit Traders as per bill no.4321
20 Pocket Radio @ 70 per Radio
2, T.V. set, B&W.(6) @ 800 Per T.V.
10 Sold to Arun Electronics as per bill no.4351
5 T.V. sets (20) B&W @ Rs.3,000 per T.V.
2 T.V. sets (21) Colour @ Rs. 4,800 per T.V.
22 Sold to Handa Electronics as per bill no.4,399
10 Tape recorders @ Rs. 600 each
5 Walkman @ Rs. 300 each
28 Sold to Harish Trader as per bill no.4430
10 Mixer Juicer Grinder @ Rs. 800 each.
(Ans. Total of sales book Rs. 43,100)

21

Solution :
Date

Sept.
01

10

22

28

Bill
No.

4321

4351

4,399

4430

Sales Journal (Book)

Name of Customer
(Account to be debited)

L.F.

Amount
Details

Total

Amit Traders:
20 Pocket Radio @ 70 per Radio
2, T.V. set, B&W.(6) @ 800 Per T.V.

1,400
1,600

3,000

Arun Electronics:
5 T.V. sets (20) B&W @ Rs.3,000 per T.V.
2 T.V. sets (21) Colour @ Rs. 4,800 per T.V.

15,000
9,600

24,600

Handa Electronics:
10 Tape recorders @ Rs. 600 each
5 Walkman @ Rs. 300 each

6,000
1,500

7,500

Harish Trader:
10 Mixer Juicer Grinder @ Rs. 800 each

8000

8,000

Sales A/C

Cr.

43,100

15. Prepare a purchases return (journal) book from the following transactions for January 2006.
Rs.
05 Returned goods to M/s Kartik Traders
1,200
10 Goods returned to Sahil Pvt. Ltd.
2,500
17 Goods returned to M/s Kohinoor Traders.
for list price Rs.2,000 less 10% trade discount.
28 Return outwards to M/s Handa Traders
550
(Ans. Total of purchases return book Rs. 6,050)
22

Solution :
Purchase Return Journal (Book)
Date Debit Name of Supplier
L.F.
Note (Account to be debited)
No.
2006
Jan
01

10
17

28

M/s Kartik Traders

Amount
Details

Total

1,200

1,200

2,500

2,500

2,000
(200)

1,800

550

550

Sahil Pvt. Ltd:

M/s Kohinoor Traders:
List price
Add:Trade Discount10%
M/s Handa Traders:
Purchase Return A/C

Cr.

6,050

16. Prepare Return Inward Journal(Book) from the following transactions of M/s Bansal Electronics for November 2005:
Rs.
04 M/s Gupta Traders returned the goods
1,500
10 Goods returned from M/s Harish Traders
800
18 M/s Rahul Traders returned the goods not as per specifications
1,200
28 Goods returned from Sushil Traders
1,000
(Ans : Total of sales return Rs. 4,500)

23

Solution :
Sales Return Journal (Book)
Date Credit Name of customer
Note (Account to be credited)
No.

L.F.

Amount
Details

Total

2005
Nov
04

M/s Gupta Traders

1,500

10

M/s Harish Traders

800

18

Rahul Traders

1,200

28

Sushil Traders

1,000

Sales Return A/C

Dr.

4,500

Recording, Posting and Balancing

17. Prepare proper subsidiary books and post them to the ledger from the following transactions for the month of February 2006:
Rs.
01 Goods sold to Sachin
5,000
04 Purchase from Kushal Traders
2,480
06 Sold goods to Manish Traders
2,100
07 Sachin returned goods
600
08 Returns to Kushal Traders
280
10 Sold to Mukesh
3,300
14 Purchased from Kunal Traders
5,200
15 Furniture purchased from Tarun
3,200
17 Bought of Naresh
4,060
20 Return to Kunal Traders
200
22 Return inwards from Mukesh
250
24 Purchased goods from Kirit & Co. for list price of
5,700
less 10% trade discount
25 Sold to Shri Chand goods
6600
24

less 5% trade discount

26 Sold to Ramesh Brothers
4,000
28 Return outwards to Kirit and Co.
1,000
less 10% trade discount
28 Ramesh Brothers returned goods
500.
Ans : (Total of sales book Rs.20,670, purchases book Rs.16,870, Purchases return book Rs.1,380, sales return book Rs.1,350).
Solution :
Purchase Journal (Book)
Date Invoice Name of Supplier
No.
(Account to be credited)

L.F.

Amount
Details

Total

2006
Feb
04

Kushal Traders

2,480

14

Kunal Traders

5,200

17

Naresh

4,060

24

Kirit & Co
Less : 10% trade discount
Purchase A/C

Date Bill
No.

Sales Journal (Book)

Name of Customer
(Account to be debited)

5,700
(570)
Dr.

16870

L.F.

Amount
Details

2006
Feb
01
06
25

Sachin
Manish Traders

5130

Total

5,000
2,100

10

Mukesh

25

Shri Chand
less 5% trade discount

26

3,300
6,600
(330)

Ramesh Brothers
Sales A/C

6,270
4,000

Cr.

20,670

Purchase Return Journal (Book)

Date Debit Name of Supplier
Note (Account to be debited)
No.

L.F.

Amount
Details

Total

2006
Feb
08

Kushal Traders

280

20

Kunal Traders

200

28

Kirit and Co

1000

less 10% trade discount

(100)

Purchase Return A/C

26

Cr.

900
1,380

Sales Return Journal (Book)

Date Credit Name of customer
Note (Account to be credited)
No.

L.F.

Amount
Details

Total

2006
Feb
07

Sachin

600

22

Mukesh

250

28

Ramesh Brothers

500

Sales Return A/C

Dr.

1,350

Journal Proper
Particulars

Date

L.F

Amount
Debit

2006
Feb
15
Furniture A/C
To Tarun
(Being furniture purchased from Tarun )

Dr.
Date

Particulars

2006
Feb
01 To Sales

Total

3,200
3,200

Sachin A/C
J.F. Amount Date Particulars

2006
Feb
5,000
07 By Sales Return
By balance b/d
5,000

Cr.
J.F. Amount

6,00
4,400

Total
5,000

27

Credit

Dr.
Date

Particulars

2006
Feb
06
To Sales

Dr.
Date

Particulars

2006
Feb
10
To Sales

Total

Dr.
Date

Particulars

2006
Feb
25 To Sales

28

Manish Traders A/C

J.F. Amount Date Particulars

2006
Feb
2,100
28 By Balance c/d

Mukesh A/C
J.F. Amount Date Particulars

2006
Feb
3,300
22 By Sales Return
28 By balance b/d
3,300

Total

Shri Chand A/C

J.F. Amount Date Particulars

6,270

By balance b/d

Cr.
J.F. Amount

2,100

Cr.
J.F. Amount

250
3,050
3,300

Cr.
J.F. Amount

6,270

Dr.
Date

Particulars

2006
Feb
26
To Sales

Ramesh Brothers A/C

J.F. Amount Date Particulars

2006
Feb
4,000
28 By Sales Return
28 By balance b/d

Total

Dr.
Date
2006
Feb
28

Particulars

4,000

J.F.

To balance b/d

Total

Sales A/C
Amount Date

2006
Feb
20,670
01
06
10
25
26

4,000

Particulars

J.F.

Cr.
Amount

By Sachin
By Manish Traders
By Mukesh
By Shri Chand
By Ramesh Brothers

5,000
2,100
3,300
6,270
4,000

Total

20670

Dr.
Date

Particulars

2006
Feb
07
22
28

To Sachin
To Mukesh
To Ramesh Brothers

Sales Return A/C

Amount
Date

2006
Feb
600
28
250
500

Total

1,350

29

500
3,500

Total

20,670

J.F.

Cr.
J.F. Amount

Particulars

By balance b/d

J.F.

Cr.
Amount

1,350

1,350

Dr.
Date

Kushal Traders A/C

Particulars
J.F. Amount Date Particulars

2006
2006
Feb
Feb
04
To Purchase Return
280
04
By Purchase
28
To balance b/d
2,200
Total

2,480

Total

Dr.
Date

Kunal Traders A/C

Particulars
J.F. Amount Date Particulars

2006
2006
Feb
Feb
20
To Purchase Return
200
14
By Purchase
28
To balance b/d
5,000
Total

Dr.
Date

Particulars

2006
Feb
28
To balance b/d
Total

5,200

Total

Naresh A/C
J.F. Amount Date Particulars

2006
Feb
4,060 17
By Purchase
4,060

Total

Dr.
Date

Kirit & Co A/C

Particulars
J.F. Amount Date Particulars

2006
2006
Feb
Feb
28 To Purchase Return
900
24 By Purchase
28 To balance b/d
4,230
Total

30

5,130

Total

Cr.
J.F. Amount

2,480

2,480
Cr.
J.F. Amount

5,200

5,200
Cr.
J.F. Amount

4,060
4,060
Cr.
J.F. Amount

5130

5,130

Dr.
Date

Particulars

2006
Feb
04
14
17
24

To Kushal Traders
To Kunal
To Naresh
To Kirit
Total

Dr.
Date

Particulars

2006
Feb
28 To balance b/d

Purchases A/C
J.F. Amount Date Particulars

2006
Feb
2,480
28
By balance b/d
5,200
4,060
5130
16,870

Purchase Return A/C

J.F. Amount Date

2006
Feb
1,380
08
20
28
1,380

Cr.
J.F. Amount

16,870

16,870

Particulars

By Kushal Traders
By Kunal
By Kirit

Cr.
J.F. Amount

280
200
900
1,380

Total
Dr.
Date

Particulars

2006
Feb
To Tarun

Dr.
Date

Particulars

2006
Feb
28 To balance b/d

31

Furniture A/C
J.F. Amount Date Particulars

2006
Feb
3,200
28
by balance b/d

Cr.
J.F. Amount

Tarun A/C
J.F. Amount Date Particulars

2006
Feb
3,200
15 By Furniture

Cr.
J.F. Amount

3,200

3,200

18. The following balances of ledger of M/s Marble Traders on April 01, 2006
Cash in hand
Cash at bank
Bills receivable
Ramesh (Cr.)
Stock (Goods)
Bills payable
Rahul (Dr.)
Himanshu (Dr.)
Transactions during the month were:
01 Goods sold to Manish
02 Purchased goods from Ramesh
03 Received cash from Rahul in full settlement
05 Cash received from Himanshu on account
06 paid to Ramesh by cheque
08 Rent paid by cheque
10 Cash received from manish
12 Cash sales
14 Goods returned to Ramesh
15 Cash paid to Ramesh in full settlement
Discount received
18 Goods sold to Kushal
20 Paid trade expenses
21 Drew for personal use
22 Goods return from Kushal
24 Cash received from Kushal
26 Paid for stationery
27 Postage charges
28 Salary Paid
29 Goods purchased from Sheetal Traders
30 Sold goods to Kirit
Goods purchased from Handa Traders
32

Rs.
6,000
12,000
7,000
3,000
5,400
2,000
9,700
10,000
Rs.
3,000
8,000
9,200
4,000
6,000.
1,200
3,000
6,000
1,000
3,700
300
10,000
200
1,000
1,200
6,000
100
60
2,500
7,000
6000
5,000

Journlise the above transactions and post them to the ledger.

Solution
Journal
Date

Particulars

L.F

Amount
Debit

April
2006
01

02

03

05

06
33

Cash in hand
Cash at bank
Bills receivable
Stock (Goods)
Rahul
Himanshu
To Bills payable
To Ramesh
To Capital (Balancing figure)
(Being previous years balance brought into the books)

Dr.
Dr.
Dr.
Dr.
Dr.
Dr.

Credit

6,000
12,000
7,000
5,400
9,700
10,000
7,000
3,000
40100

Manish
To Sales A/C
( Being goods sold to Manish)

Dr.

Purchase A/C
To Ramesh
(Being goods purchased from Ramesh)

Dr.

Cash A/C
Discount allowed A/C
To Rahul
(Being cash received from Rahul in full settlement)

Dr.
Dr.

Cash A/C
To Himanshu
(Being cash received from Himanshu on account)

Dr.

Ramesh
To Bank A/C

Dr.

3,000
3,000

8,000
8,000

9,200
500
9,700

4,000
4,000

6,000
6,000

(Being amount paid to Ramesh by cheque)

08

10

12

14

15

18

20

21

22

34

Rent A/C
To Bank A/C
(Being rent paid by cheque)

Dr.

Cash A/C
To Manish
(Being cash received from Manish)

Dr.

Cash A/C
To Sales A/C
(Being goods sold for cash)

Dr.

Ramesh
To Purchase return
(Being goods purchased from Ramesh returned)

Dr.

Ramesh
Discount Received A/C
To Cash A/C
(Being cash paid to Ramesh in full-settlement)

Dr.
Dr.

Kushal
To Sales A/C
(Being goods sold for Kushal)

Dr.

Trade Expenses A/C

To Cash
(Being trading expenses paid)

Dr.

Drawings A/C
To Cash A/C
(Being cash drawn for personal use)

Dr.

Sales return A/C

To Kushal
(Being goods return from Kushal)

Dr.

1,200
1,200

3,000
3,000

6,000
6,000

1,000
1,000

3,700
300
4,000

10,000
10,000

200
200

1,000
1,000

1,200
1,200

24

26

27

28

29

30

35

Cash A/C
To Kushal
(Being goods cash received from Kushal)

Dr.

6,000
6,000

Stationery A/C
Cash
(Being stationery purchased)

Dr.

Postage A/C
To Cash
(Being postage charges paid)

Dr.

Salary A/ C
To Cash
(Being salary paid)

Dr.

Purchase A/C
To Sheetal Traders
(Being goods purchased from Sheetal Traders

Dr.

Kirit
To Sales A/C
(Being goods sold for Kirit)

Dr.

Purchase A/C
To Handa Traders
(Being goods purchased from Handa Traders)
TOTAL

Dr.

100
100

60
60

2,500
2,500

7,000
7,000

6,000
6,000

5,000
5,000
135,060

135,060

Dr.
Date
2006
April
01
03
10
12
24

Cash A/C
Particulars
J.F. Amount Date

2006
April
To Balance b/d
6, 000 05
To Rahul
9,200
15
To Manish
3,000
20
To Sales
6,000
21
To kushal
6,000
26
27
28
30

Total
Dr.
Date

Particulars

2006
April
01

To Balance b/d

Total
Dr.
Date
2006
April
01

36

24,200
Bank A/C
J.F. Amount Date

2006
April
12,000 06
08
30

12,000

Particulars

Cr.
J.F. Amount

By Himanshu
By Ramesh
By Trade Expenses
By Drawings
By Stationery
By Postage
By Salary
By Balance c/d

4,000
3,700
200
1,000
100
60
2,500
12,640

Total

24,200

Particulars

Cr.
J.F. Amount

By Ramesh
By Rent
By Balance c/d

6,000
1,200
4,800

Total

12,000

Bills receivable A/C

Particulars
J.F. Amount Date Particulars

2006
April
To Balance b/d
7,000 30
By Balance c/d

Cr.
J.F. Amount

7,000

Dr.
Date

Particulars

2006
April
01

To Balance b/d

Dr.
Date

Particulars

2006
April
01

To Balance b/d

Total
Dr.
Date

Particulars

2006
April
01

To Balance b/d

Total
Dr.
Date

Particulars

2006
April
30

To Balance c/d

37

Stock A/C
J.F. Amount Date Particulars

2006
April
5,400 30
By Balance c/d

Cr.
J.F. Amount

5,400

Rahul A/C
Cr.
J.F. Amount Date Particulars
J.F. Amount

2006
April
9,700 03
By Cash
9,200
By Discount Allowed
500

9,700

Total

Himanshu A/C
J.F. Amount Date Particulars

2006
April
10,000 05
By Cash
30
To Balance b/d
10,000

Total

Bills payable A/C

J.F. Amount Date Particulars

2006
April
7,000
01
By Balance b/d

9,700
Cr.
J.F. Amount

4,000
6,000
10,000
Cr.
J.F. Amount

7,000

Dr.
Date

Particulars

2006
April
30

To Balance c/d

Dr.
Date
2006
April
06
14
15

Tarun A/C
J.F. Amount Date Particulars

2006
April
3,000
01
By Balance b/d

Cr.
J.F. Amount

Ramesh A/C
Particulars
J.F. Amount Date Particulars

2006
April
To Bank
6,000
01
By Balance b/d
To Purchase Return
1,000
02
By Purchase
To Bank
3,700
Discount Received
300

Cr.
J.F. Amount

Total
Dr.
Date

Particulars

2006
April
30

To Balance c/d

Dr.
Date

Particulars

2006
April
01

To Sales

38

11,000

Total

3,000

3,000
8,000

11,000

Capital A/C
J.F. Amount Date Particulars

2006
April
40,100 30
By Balance b/d

Cr.
J.F. Amount

Manish A/C
J.F. Amount Date Particulars

2006
April
3,000
10
By Cash

Cr.
J.F. Amount

40100

3,000

Dr.
Date

Particulars

2006
April
30

To balance c/d

Total
Dr.
Date

Particulars

2006
April
22

To Kushal

Dr.
Date

Particulars

2006
April
02
29
30

To Ramesh
To Sheetal Traders
To Handa Traders
Total

Dr.
Date

Particulars

2006
April
08

To Bank

39

Sales A/C
J.F. Amount Date

2006
April
25,000 01
12
18
30
25,000

Particulars

Cr.
J.F. Amount

By Manish
By Cash
By Kushal
By Kirit

3,000
6,000
10,000
6,000

Total

25,000

Sales Return A/C

J.F. Amount Date Particulars

2006
April
1,200
30
By balance c/d

Cr.
J.F. Amount

Purchases A/C
J.F. Amount Date Particulars

2006
April
8,000
30
By balance c/d
7,000
5,000

Cr.
J.F. Amount

20,000

Total

Rent A/C
J.F. Amount Date Particulars

2006
April
1,200
30
By balance c/d

1,200

20,000

20,000
Cr.
J.F. Amount

1,200

Dr.
Date

Particulars

2006
April
30

To balance c/d

Dr.
Date

Particulars

2006
April
03

To Rahul

Dr.
Date

Particulars

2006
April
30

To balance c/d

Dr.
Date

Particulars

2006
April
18

To Sales

Total

40

Purchase Return A/C

J.F. Amount Date Particulars

2006
April
1,000
14
By Ramesh

Cr.
J.F. Amount

Discount Allowed A/C

J.F. Amount Date Particulars

2006
April
500
30
By balance c/d

Cr.
J.F. Amount

Discount Received A/C

J.F. Amount Date Particulars

2006
April
300
14
By Ramesh

Cr.
J.F. Amount

Kushal A/C
J.F. Amount Date

2006
April
10,000 22
24
30

Cr.
J.F. Amount

10,000

Particulars

1,000

500

300

By Sales Return
By Cash
By balance c/d

1,200
6,000
2,800

Total

10,000

Dr.
Date

Particulars

2006
April
20

To Cash

Dr.
Date

Particulars

2006
April
20

To Cash

Dr.
Date

Particulars

2006
April
26

To Cash

Dr.
Date

Particulars

2006
April
27

To Cash

41

Trade Expenses A/C

J.F. Amount Date Particulars

2006
April
200
30
By balance c/d

Cr.
J.F. Amount

Drawing A/C
J.F. Amount Date Particulars

2006
April
1,000
30
By balance c/d

Cr.
J.F. Amount

Stationery A/C
J.F. Amount Date Particulars

2006
April
100
30
By balance c/d

Cr.
J.F. Amount

Postage A/C
J.F. Amount Date Particulars

2006
April
60
30
By balance c/d

Cr.
J.F. Amount

200

1,000

100

60

Dr.
Date

Particulars

2006
April
28

To Cash

Dr.
Date

Particulars

2006
April
30

To balance c/d

Dr.
Date

Particulars

2006
April
30

To Sales

Dr.
Date

Particulars

2006
April
30

To balance c/d

42

Salary A/C
J.F. Amount Date Particulars

2006
April
2,500
30
By balance c/d

Cr.
J.F. Amount

Sheetal Traders A/C

J.F. Amount Date Particulars

2006
April
7,000
29
By Purchases

Cr.
J.F. Amount

Kirit A/C
J.F. Amount Date Particulars

2006
April
6,000
30
By balance c/d

Cr.
J.F. Amount

Handa Traders A/C

J.F. Amount Date Particulars

2006
April
5,000
30
By Purchases

Cr.
J.F. Amount

2,500

7,000

6,000

5,000