Recording of Transactions-II - Class 11 Accountancy - Chapter 4 - Notes, NCERT Solutions & Extra Questions
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Extra Questions - Recording of Transactions-II | Financial Accounting 1 | Accountancy | Class 11
Write any three objectives of Book-keeping.
Objectives of Book-keeping:
Knowledge of Sale and Purchase of Goods: The maintenance of account books helps in recording the total sales and purchases that occur during a specific period. This ensures that businesses can track all commercial transactions accurately.
Knowledge of Income and Expenses: This objective focuses on recording various types of income and expenses. Through meticulous record-keeping, businesses can easily determine the net profit or loss for a particular period.
Record of Assets and Liabilities: One of the prime objectives of book-keeping is to keep a detailed record of assets and liabilities. This allows businesses to assess their financial position at the end of the accounting period, providing a clear and concise financial overview.
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Briefly state how the cash book is both journal and a ledger.
The cash book acts as both a journal and a ledger. As a journal, it records all transactions involving cash and bank in a chronological order. As a ledger, it features the cash account and the bank account, providing the functionality to track the balance of cash on hand and bank balances directly from the cash book itself. The dual functionality simplifies the bookkeeping process by eliminating the need for separate entries in the journal and the ledger, thereby serving as a primary book for all cash and banking transactions. This implies no separate Cash or Bank account is needed in the ledger, making the cash book a principal book in accounting.
What is the purpose of contra entry?
A contra entry is used when a transaction involves both cash and bank accounts simultaneously but does not result in an actual increase or decrease in cash resources. For example, transferring money from a cash account to a bank account or vice versa. In such cases, both sides of the transaction are recorded in the cash book itself (one side in the cash column and the other in the bank column), and these entries are marked with a 'C', indicating that they are contra transactions that do not require posting to any ledger since they self-balance within the cash book.
What are special purpose books?
Special purpose books, also known as subsidiary books or daybooks, are part of accounting journals designed to record and handle specific types of transactions efficiently. This specialization fosters increased efficiency, accuracy, and speed in processing similar types of transactions. Examples of special purpose books include:
- Sales book for recording credit sales
- Purchases book for recording credit purchases
- Cash book for recording all cash transactions
- Sales return and purchases return books for recording goods returned.
The use of special purpose books is optimal for businesses with a high volume of transactions, making it easier to manage and track specific financial activities.
What is petty cash book? How it is prepared?
The petty cash book is used to record small or petty cash expenses. It is maintained by the petty cashier who handles minor disbursements and is replenished from the main cash periodically - often governed by the imprest system. Under the imprest system, a fixed amount is assigned to the petty cashier, and at specified intervals, or when the petty cash is nearly exhausted, this amount is topped up to the original level after verifying the expenditures.
The petty cash book is usually tabulated with columns for date, details of expenditure, voucher number, debit, and credit amounts, with separate columns allocated for different types of expenses (e.g., stationery, transport).
Explain the meaning of posting of journal entries?
Posting of journal entries refers to the process of transferring the details recorded in the journal into respective accounts maintained in the ledger. This is a crucial step in the accounting cycle as it ensures that entries are recorded in the accounts that they affect, becoming the foundation for preparing financial statements. Each debit and credit in the journal entries is posted to the corresponding debit and credit side of the respective ledger accounts. This process allows account balances to be calculated and tracked and is essential for maintaining the integrity of financial data.
Define the purpose of maintaining subsidiary journal.
The purpose of maintaining subsidiary journals is to categorize and streamline the recording of transactions with similar characteristics. This method significantly reduces repetitive work in the general ledger, ensures more efficiency in record-keeping, and improves the accuracy of financial data. Subsidiary journals also facilitate faster retrieval and review of transactional details, promoting better financial management and auditing processes.
Write the difference between return Inwards and return ouwards.
Difference Between Return Inwards and Return Outwards
Return Inwards (Sales Returns) refers to the goods returned by customers to the business. These returns may occur because of defects, incorrect orders, or dissatisfaction with the product. This impacts the sales revenue recorded in the financial statements.
Return Outwards (Purchases Returns) involves the return of goods by the business to its suppliers. Reasons might include receiving damaged goods, incorrect items, or over-delivery. Return outwards reduces the total purchases the business reports.
What do you understand by ledger folio?
Ledger Folio (L.F.) refers to the page number of the ledger book where a particular account is recorded. It is used in various accounting books like journals and subsidiary books to indicate where the corresponding entries can be found in the ledger. This reference aids in tracking and cross-verifying accounting entries, ensuring coherence and accuracy in financial documentation.
What is difference between trade discount and cash discount?
Difference Between Trade Discount and Cash Discount
Trade Discount is a reduction granted by a vendor on the list price of the goods at the time of the sale. It is given based on the quantity purchased or established business relationships and does not appear in the accounting records.
Cash Discount, on the other hand, is offered to encourage prompt payment of the invoice amount within a specified period. It helps to enhance cash flow and is recorded in the accounting books, affecting the actual transaction price.
Write the process of preparing ledger from a journal.
The process of preparing a ledger from a journal involves several key steps:
1. Identifying Journal Entries: Review journal entries for accuracy and completeness.
2. Posting: Transfer the debit and credit components of each journal entry to their respective accounts in the ledger. This involves writing each transaction into the debit or credit side of the account as appropriate.
3. Balancing: Calculate the balance of each account after all entries have been posted. This is done by totaling both the debit and credit sides and finding the difference.
4. Carrying Balances Forward: If an account remains open, carry the balance forward as the opening balance for the next period.
What do you understand by Imprest amount in petty cash book?
The Imprest amount in a petty cash book refers to a fixed sum of money provided to the petty cashier. This amount is used to cover small, repetitive expenses over a specific period (usually weekly or monthly). At the end of the period, the petty cashier replenishes the amount spent, bringing the fund back to the preset imprest level. This system ensures controlled spending and simplifies monitoring of petty cash transactions.
Explain the need for drawing up the special purpose books.
Special purpose books are fundamental in accounting for efficiently handling, categorizing, and recording large volumes of transactions that a business encounters daily. The primary need for these books arises from the complexity and volume of transactions, which make single-entry bookkeeping or a general journal insufficient and cumbersome.
Utilizing special purpose books such as Cash Books, Purchases Books, Sales Books, etc., helps in streamlining the accounting process. This leads to enhanced accuracy in recording transactions by distributing the workload into specific areas. Moreover, it facilitates quicker preparation of financial statements and aids in detailed tracking, ultimately improving financial analysis and management decision-making. Special purpose books also enable effective monitoring and internal control measures by segregating duties among different accounting staff.
What is cash book? Explain the types of cash book.
The cash book is a special journal used for recording all cash receipts and cash payments. It acts like both a journal and a ledger, consolidating cash transactions in one place. It is typically updated regularly to provide a current summary of the organization's cash position.
There are several types of cash books:
1. Single Column Cash Book: Records only cash transactions, listing cash receipts on the left (debit side) and cash payments on the right (credit side).
2. Double Column Cash Book: Includes two columns on each side - one for cash and another for bank transactions. It records cash deposits and withdrawals alongside direct cash transactions.
3. Petty Cash Book: Managed by a petty cashier, this records small day-to-day expenses. It operates under the imprest system, often used to track minor cash disbursements.
Each type serves a specific function and aids in the efficient management of cash-related transactions, ensuring clarity and control over financial activities.
What is contra entry? How can you deal this entry while preparing double column cash book?
Contra entry is a type of transaction that involves both the cash account and bank account simultaneously. In bookkeeping, a contra entry is recorded when the same transaction affects both the cash and the bank balances. In a double column cash book, which includes two columns for recording transactions – one for cash and one for the bank, contra entries are common.
When you prepare a double column cash book and encounter transactions such as cash deposits into the bank or withdrawals from the bank, both columns are used for recording. For instance, if you deposit cash into the bank, you record it on the debit side in the bank column and on the credit side in the cash column. The opposite is applied for withdrawals. These entries are marked with a "C" to indicate they are contra entries, which means they do not require further posting to the ledger. This practice ensures clarity and avoids duplication in recording, maintaining accuracy in both cash and bank balances in the financial reports.
What is petty cash book? Write the advantages of petty cash book?
The petty cash book is a financial journal that records small, frequent expenditures such as office supplies, postage, and minor cash payments. It is maintained by a petty cashier and generally uses the imprest system, in which a fixed amount is reserved for covering these costs.
Advantages of the Petty Cash Book:
1. Efficiency in Managing Small Expenditures: By separating minor expenses from the main cash book, it simplifies cash management and improves financial control over small transactions.
2. Reduces Errors and Fraud: Maintaining a petty cash book helps in tracking cash flows accurately, reducing the risk of errors and potential misappropriation of funds.
3. Saves Time: It saves time for the main cashier by handling small transactions separately and simplifies the accounting process by allowing quick entries and reconciliations.
4. Enhances Accountability: Every transaction is recorded immediately, enhancing accountability and facilitating better monitoring and auditing of cash flows.
5. Convenience: Provides convenience in managing out-of-pocket expenses and immediate payments, ensuring operational processes run smoothly without financial delays.
Describe the advantages of sub-dividing the Journal.
Sub-dividing the journal into various special purpose books offers several key advantages. Efficiency in recording is enhanced as repetitive and similar nature transactions are grouped. This organization makes processing data faster. Accuracy is improved through reduced clutter and specialization in journal handling. Additionally, the division of labor can be applied as different books can be managed by specialized staff, promoting expertise and accountability in different areas. Sub-division also allows for the speedy retrieval of financial information, necessary for quick decision making. Each book’s clearer focus reduces mix-ups and fosters a streamlined workflow, crucial for large volumes of transactions. Cost reduction is another benefit, as specialist handling can decrease the incidence of errors and mismanagement.
What do you understand by balancing of account?
Balancing of an account involves equalizing the debit and credit sides by determining the difference and recording it on the lesser side. This action makes the total amounts on both sides of the account equal. This calculated difference is noted as "balance c/d" (carried down) and it represents either a debit or credit balance, depending on which side of the account is heavier. Balancing helps in summarizing the net effect or position of all transactions related to that account for a given period. It provides a clear snapshot of an entity's financial standing for that particular account. The balance is then brought forward ("balance b/d") to the next accounting period, indicating it as an ongoing value. Balancing is pivotal in maintaining accuracy in financial records and preparing financial statements.
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Enter the following transactions in a simple cash book for December 2016:
₹ | ||
---|---|---|
01 | Cash in hand | 12,000 |
05 | Cash received from Bhanu | 4,000 |
07 | Rent Paid | 2,000 |
10 | Purchased goods Murari for cash | 6,000 |
15 | Sold goods for cash | 9,000 |
18 | Purchase stationery | 300 |
22 | Cash paid to Rahul on account | 2,000 |
28 | Paid salary | 1,000 |
30 | Paid rent | 500 |
To record the transactions given in a simple cash book for December 2016, we will format the single column cash book as follows:
Simple Cash Book
Date | Receipts | L.F. | Amount (₹) | Date | Payments | L.F. | Amount (₹) |
---|---|---|---|---|---|---|---|
2016 Dec 01 | Balance b/d | 12,000 | 2016 Dec 07 | Rent Paid | 2,000 | ||
2016 Dec 05 | Cash received from Bhanu | 4,000 | 2016 Dec 10 | Purchased goods for cash | 6,000 | ||
2016 Dec 15 | Sold goods for cash | 9,000 | 2016 Dec 18 | Purchase stationery | 300 | ||
2016 Dec 22 | Cash paid to Rahul on account | 2,000 | |||||
2016 Dec 28 | Paid salary | 1,000 | |||||
2016 Dec 30 | Paid rent | 500 | |||||
2016 Dec 31 | Balance c/d | 13,200 | |||||
25,000 | 25,000 |
Explanation:
Receipts side:
Starting balance brought down (
Balance b/d
): ₹12,000 on Dec 1.Cash received from Bhanu: ₹4,000 on Dec 5.
Cash from selling goods: ₹9,000 on Dec 15.
Payments side:
Rent paid: ₹2,000 on Dec 7.
Purchased goods for cash: ₹6,000 on Dec 10.
Purchase stationery: ₹300 on Dec 18.
Cash paid to Rahul on account: ₹2,000 on Dec 22.
Paid salary: ₹1,000 on Dec 28.
Paid rent: ₹500 on Dec 30.
Balance carried down (
Balance c/d
): The remaining cash balance on December 31 which is ₹13,200.
This format ensures all transactions are recorded chronologically with proper credits and debits within the month specified.
Record the following transaction in simple cash book for November 2016:
₹ | ||
---|---|---|
01 | Cash in hand | 12,500 |
04 | Cash paid to Hari | 600 |
07 | Purchased goods | 800 |
12 | Cash received from Amit | 1,960 |
16 | Sold goods for cash | 800 |
20 | Paid to Manish | 590 |
25 | Paid cartage | 100 |
31 | Paid salary | 1,000 |
To record the transactions in a single column cash book for November 2016, we need to create tables for Receipts and Payments.
Cash Book
Dr.
Date | Receipts | L.F. | Amount ₹ |
---|---|---|---|
2016 Nov. 01 | Cash in hand | 12,500 | |
2016 Nov. 12 | Cash received from Amit | 1,960 | |
2016 Nov. 16 | Sold goods for cash | 800 | |
Total Receipts | 15,260 |
Cr.
Date | Payments | L.F. | Amount ₹ |
---|---|---|---|
2016 Nov. 04 | Cash paid to Hari | 600 | |
2016 Nov. 07 | Purchased goods | 800 | |
2016 Nov. 20 | Paid to Manish | 590 | |
2016 Nov. 25 | Paid cartage | 100 | |
2016 Nov. 31 | Paid salary | 1,000 | |
Total Payments | 3,090 |
To find the closing balance, we subtract the total payments from the total receipts.
$$ \text{Closing Balance} = \text{Total Receipts} - \text{Total Payments} = 15,260 - 3,090 = 12,170 $$
Cash Book
Dr.
Date | Receipts | L.F. | Amount ₹ |
---|---|---|---|
2016 Nov. 01 | Cash in hand | 12,500 | |
2016 Nov. 12 | Cash received from Amit | 1,960 | |
2016 Nov. 16 | Sold goods for cash | 800 | |
Total Receipts | 15,260 |
Cr.
Date | Payments | L.F. | Amount ₹ |
---|---|---|---|
2016 Nov. 04 | Cash paid to Hari | 600 | |
2016 Nov. 07 | Purchased goods | 800 | |
2016 Nov. 20 | Paid to Manish | 590 | |
2016 Nov. 25 | Paid cartage | 100 | |
2016 Nov. 31 | Paid salary | 1,000 | |
Total Payments | 3,090 | ||
Balance c/d | 12,170 | ||
Total | 15,260 |
Enter the following transaction in Simple cash book for December 2017:
₹ | ||
---|---|---|
01 | Cash in hand | 7,750 |
06 | Paid to Sonu | 45 |
08 | Purchased goods | 600 |
15 | Received cash from Parkash | 960 |
20 | Cash sales | 500 |
25 | Paid to S.Kumar | 1,200 |
30 | Paid rent | 600 |
To record the transactions for December 2017 in a simple cash book, we will list the cash receipts on the debit side and the cash payments on the credit side. Let’s create the cash book based on the given transactions.
Cash Book
Date | Receipts | LF | Amount (₹) | Date | Payments | LF | Amount (₹) |
---|---|---|---|---|---|---|---|
2017 | 2017 | ||||||
Dec 01 | Cash in hand | 7,750 | Dec 06 | Paid to Sonu | 45 | ||
Dec 15 | Cash from Parkash | 960 | Dec 08 | Purchased goods | 600 | ||
Dec 20 | Cash sales | 500 | Dec 25 | Paid to S. Kumar | 1,200 | ||
Dec 30 | Paid rent | 600 | |||||
Balance c/d | 7,365 | ||||||
9,210 | 9,210 | ||||||
Jan 01 | Balance b/d | 7,365 |
Overview:
The left side of the cash book records all cash receipts.
The right side of the cash book records all cash payments.
The book starts with the cash in hand on December 1st as ₹7,750.
It includes all the transactions specified, and balances the account at the end of the month with a carried forward balance to the next month.
The closing balance as of December 31st, 2017 is ₹7,365 which is carried forward to the next period (January 1st, 2018).
Record the following transactions in a bank column cash book for December 2016:
₹ | ||
---|---|---|
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 |
Below is the Bank Column Cash Book for recording the transactions of December 2016:
Books of [Business Name] Bank Column Cash Book
Date | Particulars | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
2016 Dec. 01 | To Capital (Started business with cash) | 80,000 | ||
2016 Dec. 04 | To Cash (Deposited in bank) | 50,000 | ||
By Bank (Contra Entry) | 50,000 | |||
2016 Dec. 10 | To Rahul (Received cash) | 1,000 | ||
2016 Dec. 15 | By Purchases (Bought goods for cash) | 8,000 | ||
2016 Dec. 22 | By Purchases (Bought goods by cheque) | 10,000 | ||
2016 Dec. 25 | By Shyam (Paid by cash) | 20,000 | ||
2016 Dec. 30 | To Bank (Drew from Bank for office use) | 2,000 | ||
By Cash (Contra Entry) | 2,000 | |||
2016 Dec. 31 | By Rent (Paid by cheque) | 1,000 |
Balances:
Cash balance carried down (c/d): ₹
Bank balance carried down (c/d): ₹
To get the balances carried down, we need to calculate the total receipts and the total payments for both cash and bank.
Let's calculate the totals:
Totals:
Cash Receipt:$$ 80,000 + 1,000 + 2,000 (Contra) = 83,000 $$ Cash Payment:$$ 50,000 (Contra) + 8,000 + 20,000 = 78,000 $$ Bank Receipt:$$ 50,000 + 2,000 (Contra) = 52,000 $$ Bank Payment:$$ 10,000 + 1,000 + 2,000 (Contra) = 13,000 $$
Balance carried down:
Cash Balance (c/d):$$ 83,000 - 78,000 = 5,000 $$ Bank Balance (c/d):$$ 52,000 - 13,000 = 39,000 $$
Thus, the final Cash Book with balances brought down (b/d) for the next period is:
Date | Particulars | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
2016 Dec. 01 | To Capital (Started business with cash) | 80,000 | ||
2016 Dec. 04 | To Cash (Deposited in bank) | 50,000 | ||
By Bank (Contra Entry) | 50,000 | |||
2016 Dec. 10 | To Rahul (Received cash) | 1,000 | ||
2016 Dec. 15 | By Purchases (Bought goods for cash) | 8,000 | ||
2016 Dec. 22 | By Purchases (Bought goods by cheque) | 10,000 | ||
2016 Dec. 25 | By Shyam (Paid by cash) | 20,000 | ||
2016 Dec. 30 | To Bank (Drew from Bank for office use) | 2,000 | ||
By Cash (Contra Entry) | 2,000 | |||
2016 Dec. 31 | By Rent (Paid by cheque) | 1,000 | ||
To Balance c/d | 5,000 | 39,000 | ||
Total | 83,000 | 52,000 | ||
2017 Jan. 01 | To Balance b/d | 5,000 | 39,000 |
This format records all transactions with both cash and bank columns, ensuring clarity for accounting purposes.
Prepare a double column cash book with the help of following information for December 2016:
$₹$ | ||
---|---|---|
01 | Started business with cash | $1,20,000$ |
03 | Cash paid into bank | 50,000 |
05 | Purchased goods from Sushmita | 20,000 |
06 | Sold goods to Dinker and received a cheque | 20,000 |
10 | Paid to Sushmita cash | 20,000 |
14 | Cheque received on December 06, 2016 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 |
Double Column Cash Book
December 2016
Date | Receipts | L.F. | Cash (₹) | Bank (₹) | Date | Payments | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|---|---|---|---|---|
Dec. 01 | Capital | 1,20,000 | Dec. 03 | Bank (C) | 50,000 | 50,000 | |||
Dec. 06 | Dinker | 20,000 | Dec. 10 | Sushmita | 20,000 | ||||
Dec. 22 | Rani | 12,000 | Dec. 20 | Cartage | 500 | ||||
Dec. 27 | Commission | 5,000 | Dec. 30 | Drawings | 2,000 | ||||
Dec. 14 | Bank (C) | 20,000 | Dec. 31 | Balance c/d | 64,500 | 90,000 | |||
Total | 1,37,000 | 90,000 | Total | 1,37,000 | 90,000 |
January 2017
Date | Receipts | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
Jan. 01 | Balance b/d | 64,500 | 90,000 |
Explanation:
Dec 01: Business started with cash (₹ 1,20,000).
Dec 03: Cash paid into the bank (₹ 50,000) (Contra Entry).
Dec 06: Sold goods to Dinker and received a cheque of (₹ 20,000).
Dec 10: Paid (₹ 20,000) cash to Sushmita.
Dec 14: The cheque received from Dinker on Dec 06 was deposited into the bank (Contra Entry).
Dec 18: Sold goods to Rani for (₹ 12,000).
Dec 20: Paid (₹ 500) for cartage in cash.
Dec 22: Received (₹ 12,000) cash from Rani.
Dec 27: Received (₹ 5,000) as commission.
Dec 30: Drew (₹ 2,000) cash for personal use.
Notes:
The entries related to the bank are shown in both the cash and bank columns.
Contra Entries are marked with (C) indicating these are within the cash and bank columns only.
Enter the following transactions in double column cash book of M/s Ambica Traders for July 2017:
₹ | ||
---|---|---|
01 | Commenced business with cash | 50,000 |
03 | Opened bank account with ICICI | 30,000 |
05 | Purchased goods for cash | 10,000 |
10 | Purchased office machine for cash | 5,000 |
15 | Sales goods on credit from Rohan and received chaeque | 7,000 |
18 | Cash sales | 8,000 |
20 | Rohan's cheque deposited into bank | |
22 | Paid cartage by cheque | 500 |
25 | Cash withdrawn for personal use | |
30 | Paid rent by cheque | 1,000 |
Let's record the given transactions in a double column cash book for M/s Ambica Traders for July 2017. The double column cash book includes columns for both Cash and Bank transactions.
Double Column Cash Book for M/s Ambica Traders for July 2017
Cash Book (Dr. and Cr. sides)
Date | Particulars | L.F. | Cash (₹) | Bank (₹) | Date | Particulars | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|---|---|---|---|---|
2017 July 01 | To Capital a/c | 50,000 | 2017 July 03 | By Bank a/c | C | 30,000 | |||
2017 July 05 | To Sales a/c | 7,000 | 2017 July 05 | By Purchases a/c | 10,000 | ||||
20 | To Sales a/c | 8,000 | 2017 July 10 | By Office Equipment a/c | 5,000 | ||||
20 | To Rohan a/c (cheque deposited) | 7,000 | 2017 July 22 | By Cartage a/c (cheque) | 500 | ||||
2017 July 25 | By Drawings a/c | ||||||||
2017 July 30 | To Rent a/c (cheque) | 1,000 | |||||||
Totals: | 88,000 | 15,000 | 15,000 |
Contra entries, marked C in the L.F. column, represent internal transfers between Cash and Bank columns, and are not posted to the ledger.
You can now post each transaction from the cash book to specific ledger accounts as needed.
Prepare double column cash book from the following information for July 2017:
₹ | ||
---|---|---|
01 | Cash In hand Bank Overdraft | 7,500 |
03 | Paid wages | 200 |
05 | Cash Sales | 7,000 |
10 | Cash deposited into bank | 4,000 |
15 | Goods purchased and paid by cheque | 2,000 |
20 | Paid Rent | 500 |
25 | Drew from bank for personal use | 400 |
30 | Salary paid | 1,000 |
Here is the double column cash book prepared from the provided information for July 2017:
Books of [Your Business Name]
Double Column Cash Book
Date | Receipts | L.F. | Cash (₹) | Bank (₹) | Date | Payments | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|---|---|---|---|---|
2017 | 2017 | ||||||||
July 01 | Balance b/d | 7,500 | (3,500) | July 03 | Wages | 200 | |||
July 05 | Cash Sales | 7,000 | July 10 | Bank (Contra) | 4,000 | (4,000) | |||
July 15 | Purchases (via cheque) | 2,000 | |||||||
July 20 | Rent | 500 | |||||||
July 25 | Drawings (personal use) | 400 | |||||||
July 30 | Salary | 1,000 | |||||||
Balance c/d | 8,800 | (5,900) | |||||||
14,500 | (3,500) | 14,500 | (3,500) |
Balance b/d
Cash: ₹8,800
Bank: (₹5,900, indicating an overdraft)
Enter the following transaction in a double column cash book of M/s.Mohit Traders for January 2017:
$₹$ | ||
---|---|---|
Cash in hand | 3,500 | |
03 | Bank overdraft | 2,300 |
05 | Paid wages | 1,200 |
10 | Cash sales | 200 |
15 | Deposited into bank | 8,000 |
22 | Sold goods for cheque which was deposited into | 6,000 |
bank same day | 2,000 | |
25 | Paid rent by cheque | 1,200 |
28 | Drew from bank for personal use | 1,000 |
31 | Bought goods by cheque | 1,000 |
Here's the Double Column Cash Book for M/s Mohit Traders for January 2017:
Cash Book
Date | Receipts | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
2017 | ||||
Jan. 01 | Balance b/d | 3,500 | - | |
Jan. 10 | Cash Sales | 200 | - | |
Jan. 22 | Sales (Cheque deposited same day) | - | 6,000 | |
Total | 3,700 | 6,000 |
Date | Payments | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
2017 | Paid Wages | 1,200 | - | |
Jan. 15 | Deposited into Bank | - | 8,000 | |
Jan. 25 | Paid Rent by Cheque | - | 1,200 | |
Jan. 28 | Drew from Bank for Personal Use | - | 1,000 | |
Jan. 31 | Bought Goods by Cheque | - | 1,000 | |
Jan. 31 | Bank Overdraft | - | 2,300 | |
Total | 1,200 | 13,500 |
Balance c/d on January 31, 2017:
Cash: ₹2,300
Bank: ( - ) (indicating an overdraft of ₹2,300)
Summary:
Total Receipts:
Cash: ₹3,700
Bank: ₹6,000
Total Payments:
Cash: ₹1,200
Bank: ₹13,500
Prepare double column cash book from the following transactions for the year August 2017:
Date | Description | Amount (₹) |
---|---|---|
01 | Cash in hand | 17,500 |
01 | Cash at bank | 5,000 |
03 | Purchased goods for cash | (3,000) |
05 | Received cheque from Jasmeet | 10,000 |
08 | Sold goods for cash | 7,000 |
10 | Jasmeet's cheque deposited into bank | - |
12 | Purchased goods and paid by cheque | (20,000) |
15 | Paid establishment expenses through bank | (1,000) |
18 | Cash sales | 7,000 |
20 | Deposited into bank | (10,000) |
24 | Paid trade expenses | (500) |
27 | Received commission by cheque | 6,000 |
29 | Paid Rent | (2,000) |
30 | Withdrew cash for personal use | (1,200) |
31 | Salary paid | (6,000) |
Books of XYZ
Double Column Cash Book
Date | Particulars | L.F. | Cash (₹) | Bank (₹) | Date | Particulars | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|---|---|---|---|---|
2017 | 2017 | ||||||||
Aug 01 | Balance b/d | 17,500 | 5,000 | Aug 03 | Purchase goods (Cash) | 3,000 | |||
Aug 08 | Cash sales | 7,000 | Aug 12 | Purchase goods (Cheque) | 20,000 | ||||
Aug 18 | Cash sales | 7,000 | Aug 15 | Paid establishment expenses (Bank) | 1,000 | ||||
Aug 27 | Received commission (Cheque) | 6,000 | Aug 20 | Cash deposited into bank (Contra) | C | 10,000 | |||
Aug 24 | Trade expenses | 500 | |||||||
Aug 29 | Rent | 2,000 | |||||||
Aug 30 | Personal withdrawal (Drawings) | 1,200 | |||||||
Aug 31 | Salary | 6,000 | |||||||
Aug 10 | Jasmeet's cheque deposited (Contra) | 10,000 | |||||||
Total | 41,500 | 36,000 | Total | 41,500 | 36,000 | ||||
Aug 31 | Balance c/d | 8,800 | 10,000 | ||||||
Sep 01 | Balance b/d | 8,800 | 10,000 |
The balances on August 31 for cash in hand and cash at the bank are ₹8,800 and ₹10,000 respectively.
M/s Ruchi trader started their cash book with the following balances on July 2017: cash in hand ₹ 1,354 and balance in bank current account ₹7,560. He had the following transaction in the month of July 2017:
Date | Description | ₹ |
---|---|---|
03 | Cash sales | 2,300 |
05 | Purchased goods, paid by cheque | 6,000 |
08 | Cash sales | 10,000 |
12 | Paid trade expenses | 700 |
15 | Sales goods, received cheque (deposited same day) | 20,000 |
18 | Purchased motor car paid by cheque | 15,000 |
20 | Cheque received from Manisha (deposited same day) | 10,000 |
22 | Cash Sales | 7,000 |
25 | Manisha's 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
Below is the Bank Column Cash Book for M/s Ruchi Trader for the month of July 2017 based on the given transactions:
Bank Column Cash Book
Date | Particulars | L.F. | Cash (₹) | Bank (₹) |
---|---|---|---|---|
2017 | ||||
July 01 | Balance b/d | 1,354 | 7,560 | |
July 03 | Cash Sales | 2,300 | ||
July 05 | Purchased goods (Cheque) | 6,000 | ||
July 08 | Cash Sales | 10,000 | ||
July 12 | Paid trade expenses | (700) | ||
July 15 | Sales goods (Cheque) | 20,000 | ||
July 18 | Purchased motor car (Cheque) | 15,000 | ||
July 20 | Cheque received from Manisha | 10,000 | ||
July 22 | Cash Sales | 7,000 | ||
July 25 | Manisha's cheque dishonoured | (10,000) | ||
July 28 | Paid Rent | (2,000) | ||
July 29 | Paid telephone expenses (Cheque) | 500 | ||
July 31 | Cash withdrawn for personal use | (2,000) | ||
Total | 15,954 | 6,060 |
Balances:
Cash Balance on July 31, 2017: ₹15,954
Bank Balance on July 31, 2017: ₹6,060
Here, the cash receipts are added to the cash balance, and the cash payments are subtracted. The bank transactions are separately recorded in the bank column resulting in the final balances.
Prepare petty cash book from the following transactions. The imprest amount is ₹ 2,000 .
Date | Description | ₹ |
---|---|---|
01 January | Paid cartage | 50 |
02 January | STD charges | 40 |
02 January | Bus fare | 20 |
03 January | Postage | 30 |
04 January | Refreshment for employees | 80 |
06 January | Courier charges | 30 |
08 January | Refreshment of customer | 50 |
10 January | Cartage | 35 |
15 January | Taxi fare to manager | 70 |
18 January | Stationery | 65 |
20 January | Bus fare | 10 |
22 January | Fax charges | 30 |
25 January | Telegrams charges | 35 |
27 January | Postage stamps | 200 |
29 January | Repair on furniture | 105 |
30 January | Laundry expenses | 115 |
31 January | Miscellaneous expenses | 100 |
Below is the petty cash book for January, reflecting the given transactions:
Books of [Your Company Name]
Petty Cash Book
For the Month of January
Date | Particulars | Voucher No. | Total | Cartage | Bus Fare | Postage | Refreshment | STD/Fax | Stationery | Taxi Fare | Courier | Telegram | Repair | Laundry | Misc |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan 01 | Cash (Imprest Amount) | 2000.00 | |||||||||||||
Jan 01 | Paid cartage | 50.00 | 50.00 | ||||||||||||
Jan 02 | STD charges | 40.00 | 40.00 | ||||||||||||
Jan 02 | Bus fare | 20.00 | 20.00 | ||||||||||||
Jan 03 | Postage | 30.00 | 30.00 | ||||||||||||
Jan 04 | Refreshment for employees | 80.00 | 80.00 | ||||||||||||
Jan 06 | Courier charges | 30.00 | 30.00 | ||||||||||||
Jan 08 | Refreshment for customer | 50.00 | 50.00 | ||||||||||||
Jan 10 | Cartage | 35.00 | 35.00 | ||||||||||||
Jan 15 | Taxi fare for manager | 70.00 | 70.00 | ||||||||||||
Jan 18 | Stationery | 65.00 | 65.00 | ||||||||||||
Jan 20 | Bus fare | 10.00 | 10.00 | ||||||||||||
Jan 22 | Fax charges | 30.00 | 30.00 | ||||||||||||
Jan 25 | Telegram charges | 35.00 | 35.00 | ||||||||||||
Jan 27 | Postage stamps | 200.00 | 200.00 | ||||||||||||
Jan 29 | Repair on furniture | 105.00 | 105.00 | ||||||||||||
Jan 30 | Laundry expenses | 115.00 | 115.00 | ||||||||||||
Jan 31 | Miscellaneous expenses | 100.00 | 100.00 | ||||||||||||
Total | 1065.00 | 85.00 | 30.00 | 230.00 | 180.00 | 70.00 | 65.00 | 70.00 | 30.00 | 35.00 | 105.00 | 115.00 | 100.00 | ||
Balance c/d | 935.00 | ||||||||||||||
Feb 01 | Balance b/d | 935.00 | |||||||||||||
Feb 01 | Cash (Replenished) | 1065.00 |
Totals
Imprest Amount (Initial Cash): ₹2,000
Total Expenditure: ₹1,065
Balance Carried Forward: ₹935
Record the following transactions during the week ending Dec.30, 2014 with a weekly imprest ₹ 500 .
Date | Description | ₹ |
---|---|---|
24 January | Stationery | 100 |
25 January | Bus fare | 12 |
25 January | Cartage | 40 |
26 January | Taxi fare | 80 |
27 January | Wages to casual labour | 90 |
29 January | Postage | 80 |
Based on the given transactions for the week ending Dec. 30, 2014, here is the recording in the Petty Cash Book using the given weekly imprest of ₹ 500.
Petty Cash Book
Date | Particulars | Voucher No. | Total (₹) | Stationery (₹) | Bus Fare (₹) | Cartage (₹) | Taxi Fare (₹) | Wages (₹) | Postage (₹) | Miscellaneous (₹) |
---|---|---|---|---|---|---|---|---|---|---|
24-Jan-2014 | To Cash | 500 | ||||||||
24-Jan-2014 | Stationery | 100 | 100 | |||||||
25-Jan-2014 | Bus Fare | 12 | 12 | |||||||
25-Jan-2014 | Cartage | 40 | 40 | |||||||
26-Jan-2014 | Taxi Fare | 80 | 80 | |||||||
27-Jan-2014 | Wages to casual labour | 90 | 90 | |||||||
29-Jan-2014 | Postage | 80 | 80 |
Summary
Particulars | Amount (₹) |
---|---|
Cash Received | 500 |
Total Expenses | 402 |
Balances Left | 98 |
Remarks
The total expenses for the week are ₹ 402.
The balance left to be carried forward or reimbursed is ₹ 98.
The Petty Cashier should request for a reimbursement of ₹402 to restore the imprest balance to ₹500 for the next week.
Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2017:
Date | Description | Quantity | Rate (₹) | Total (₹) |
---|---|---|---|---|
01 January | Bought from Rahul Traders (Invoice no. 20041) | |||
40 Registers | 40 | 60 | 2400 | |
80 Gel Pens | 80 | 15 | 1200 | |
50 Note Books | 50 | 20 | 1000 | |
Trade discount 10% | -460 | |||
15 January | Bought from Global Stationers (Invoice no. 1132) | |||
40 Ink Pads | 40 | 8 | 320 | |
50 Files | 50 | 10 | 500 | |
20 Color Books | 20 | 20 | 400 | |
Trade discount 5% | -61 | |||
23 January | Purchased from Lamba Furniture (Invoice no. 3201) | |||
2 Chairs | 2 | 600 | 1200 | |
1 Table | 1 | 1000 | 1000 | |
25 January | Bought from Mumbai Traders (Invoice no. 1111) | |||
10 Paper Rim | 10 | 100 | 1000 | |
400 Drawing Sheets | 400 | 3 | 1200 | |
20 Packets Water Colour | 20 | 40 | 800 |
Books of M/s Gupta Traders
Purchases (Journal) Book
Date | Invoice No. | Name of the Supplier | Amount (₹) |
---|---|---|---|
2017 | |||
Jan. 01 | 20041 | Rahul Traders | |
40 Registers | 2,400 | ||
80 Gel Pens | 1,200 | ||
50 Note Books | 1,000 | ||
Less: Trade discount 10% | -460 | ||
4,140 | |||
Jan. 15 | 1132 | Global Stationers | |
40 Ink Pads | 320 | ||
50 Files | 500 | ||
20 Color Books | 400 | ||
Less: Trade Discount 5% | -61 | ||
1,159 | |||
Jan. 23 | 3201 | Lamba Furniture | |
2 Chairs | 1,200 | ||
1 Table | 1,000 | ||
2,200 | |||
Jan. 25 | 1111 | Mumbai Traders | |
10 Paper Rim | 1,000 | ||
400 Drawing Sheets | 1,200 | ||
20 Packets Water Colour | 800 | ||
3,000 | |||
Jan. 31 | Total | 10,499 |
Summary
Total purchases from Rahul Traders: ₹4,140
Total purchases from Global Stationers: ₹1,159
Total purchases from Lamba Furniture: ₹2,200
Total purchases from Mumbai Traders: ₹3,000
Grand Total: ₹10,499
Enter the following transactions in sales (journal) book of M/s.Bansal electronics:
Date | Description | Quantity | Rate (₹) | Total (₹) |
---|---|---|---|---|
01 January | Sold to Amit Traders (Bill no. 4321) | |||
20 Pocket Radio | 20 | 70 | 1400 | |
2 T.V. set, B&W (6") | 2 | 800 | 1600 | |
10 January | Sold to Arun Electronics (Bill no. 4351) | |||
5 T.V. sets (20”) B&W | 5 | 3000 | 15000 | |
2 T.V. sets (21") Colour | 2 | 4800 | 9600 | |
22 January | Sold to Handa Electronics (Bill no. 4399) | |||
10 Tape recorders | 10 | 600 | 6000 | |
5 Walkman | 5 | 300 | 1500 | |
28 January | Sold to Harish Trader (Bill no. 4430) | |||
10 Mixer Juicer Grinder | 10 | 800 | 8000 |
Books of M/s Bansal Electronics
Sales (Journal) Book
Date | Invoice No. | Name of the Customer | Quantity | Rate (₹) | Amount (₹) |
---|---|---|---|---|---|
2017 | |||||
01 January | 4321 | Amit Traders | 3,000 | ||
- 20 Pocket Radios | 20 | 70 | 1,400 | ||
- 2 T.V. sets, B&W (6") | 2 | 800 | 1,600 | ||
10 January | 4351 | Arun Electronics | 24,600 | ||
- 5 T.V sets (20”) B&W | 5 | 3000 | 15,000 | ||
- 2 T.V. sets (21") Colour | 2 | 4800 | 9,600 | ||
22 January | 4399 | Handa Electronics | 7,500 | ||
- 10 Tape recorders | 10 | 600 | 6,000 | ||
- 5 Walkman | 5 | 300 | 1,500 | ||
28 January | 4430 | Harish Trader | 8,000 | ||
- 10 Mixer Juicer Grinder | 10 | 800 | 8,000 | ||
Total | 43,100 |
Prepare a purchases return (journal) book from the following transactions for April 2017.
Date | Description | Amount (₹) |
---|---|---|
05 April | Returned goods to M/s Kartik Traders | |
10 April | Goods returned to Sahil Pvt. Ltd. | 2,500 |
17 April | Goods returned to M/s Kohinoor Traders | |
(List price ₹ 2,000 less 10% trade discount) | 1,800 | |
28 April | Return outwards to M/s Handa Traders |
To prepare the Purchases Return (Journal) Book for the month of April 2017, we need to list and total the returns of goods purchased on credit. Here’s how you can format the Purchases Return Journal Book:
Purchases Return (Journal) Book
Date | Debit Note No. | Name of the Supplier | Amount (₹) |
---|---|---|---|
2017 | |||
05 April | M/s Kartik Traders | - | |
10 April | Sahil Pvt. Ltd. | 2,500 | |
17 April | M/s Kohinoor Traders (₹2,000 less 10%) | 1,800 | |
28 April | M/s Handa Traders | - | |
Total | 4,300 |
In this Purchases Return (Journal) Book:
Each return is listed with its date.
The description of the transaction is mentioned.
Amount returned is specified.
For entries like the one on 5 April and 28 April, where the amount is not specified, you would need the exact return amount to complete the journal accurately.
Prepare Return Inward Journal (Book) from the following transactions of M/s Bansal Electronics for July 2017:
Date | Description | Amount (₹) |
---|---|---|
04 July | M/s Gupta Traders returned the goods | 1,500 |
10 July | Goods returned from M/s Harish Traders | 800 |
18 July | M/s Rahul Traders returned the goods not as per specifications | 1,200 |
28 July | Goods returned from Sushil Traders | 1,000 |
Here is the Return Inward (Sales Return) Journal for M/s Bansal Electronics for the month of July 2017:
Date | Credit Note No. | Name of the Customer | Amount (₹) |
---|---|---|---|
04 July | 001 | M/s Gupta Traders | 1,500 |
10 July | 002 | M/s Harish Traders | 800 |
18 July | 003 | M/s Rahul Traders | 1,200 |
28 July | 004 | M/s Sushil Traders | 1,000 |
Total | 4,500 |
This completes the Return Inward Journal for the specified transactions.
Prepare proper subsidiary books and post them to the ledger from the following transactions for the month of February 2017:
2017
February
Date | Description | Amount (₹) |
---|---|---|
01 Jan | Goods sold to Sachin | 5,000 |
04 Jan | Purchase from Kushal Traders | 2,480 |
06 Jan | Sold goods to Manish Traders | 2,100 |
07 Jan | Sachin returned goods | 600 |
08 Jan | Returns to Kushal Traders | 280 |
10 Jan | Sold to Mukesh | 3,300 |
14 Jan | Purchased from Kunal Traders | 5,200 |
15 Jan | Furniture purchased from Tarun | 3,200 |
17 Jan | Bought from Naresh | 4,060 |
20 Jan | Return to Kunal Traders | 200 |
22 Jan | Return inwards from Mukesh | 250 |
24 Jan | Purchased goods from Kirit & Co. for list price of ₹5,700 less 10% trade discount | 5,130 |
25 Jan | Sold to Shri Chand goods ₹6,600 less 5% trade discount | 6,270 |
26 Jan | Sold to Ramesh Brothers | 4,000 |
28 Jan | Return outwards to Kirit & Co. ₹1,000 less 10% trade discount | 900 |
28 Jan | Ramesh Brothers returned goods | 500 |
Here are the subsidiary books based on the given transactions:
Sales (Journal) Book
Date | Invoice No. | Customer | Amount (₹) |
---|---|---|---|
01 Jan 2017 | 1 | Sachin | 5,000 |
06 Jan 2017 | 2 | Manish Traders | 2,100 |
10 Jan 2017 | 3 | Mukesh | 3,300 |
25 Jan 2017 | 4 | Shri Chand | 6,270 |
26 Jan 2017 | 5 | Ramesh Brothers | 4,000 |
Total | 20,670 |
Sales Return (Journal) Book
Date | Credit No. | Customer | Amount (₹) |
---|---|---|---|
07 Jan 2017 | 1 | Sachin | 600 |
22 Jan 2017 | 2 | Mukesh | 250 |
28 Jan 2017 | 3 | Ramesh Brothers | 500 |
Total | 1,350 |
Purchases (Journal) Book
Date | Invoice No. | Supplier | Amount (₹) |
---|---|---|---|
04 Jan 2017 | 1 | Kushal Traders | 2,480 |
14 Jan 2017 | 2 | Kunal Traders | 5,200 |
17 Jan 2017 | 3 | Naresh | 4,060 |
24 Jan 2017 | 4 | Kirit & Co. | 5,130 |
Total | 16,870 |
Purchases Return (Journal) Book
Date | Debit Note No. | Supplier | Amount (₹) |
---|---|---|---|
08 Jan 2017 | 1 | Kushal Traders | 280 |
20 Jan 2017 | 2 | Kunal Traders | 200 |
28 Jan 2017 | 3 | Kirit & Co. | 900 |
Total | 1,380 |
Ledger Posting
Sales Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
01 Jan | To Sachin | 5,000 | |
06 Jan | To Manish Traders | 2,100 | |
10 Jan | To Mukesh | 3,300 | |
25 Jan | To Shri Chand | 6,270 | |
26 Jan | To Ramesh Brothers | 4,000 | |
Total | 20,670 |
Sales Return Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
07 Jan | To Sachin | 600 | |
22 Jan | To Mukesh | 250 | |
28 Jan | To Ramesh Brothers | 500 | |
Total | 1,350 |
Purchases Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
04 Jan | By Kushal Traders | 2,480 | |
14 Jan | By Kunal Traders | 5,200 | |
17 Jan | By Naresh | 4,060 | |
24 Jan | By Kirit & Co. | 5,130 | |
Total | 16,870 |
Purchases Return Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
08 Jan | By Kushal Traders | 280 | |
20 Jan | By Kunal Traders | 200 | |
28 Jan | By Kirit & Co. | 900 | |
Total | 1,380 |
Relevant Individual Accounts
Sachin's Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
01 Jan | By Sales | 5,000 | |
07 Jan | To Sales Return | 600 | |
Balance | 4,400 |
Manish Traders' Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
06 Jan | By Sales | 2,100 |
Mukesh's Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
10 Jan | By Sales | 3,300 | |
22 Jan | To Sales Return | 250 | |
Balance | 3,050 |
Shri Chand's Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
25 Jan | By Sales | 6,270 |
Ramesh Brothers' Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
26 Jan | By Sales | 4,000 | |
28 Jan | To Sales Return | 500 | |
Balance | 3,500 |
Kushal Traders' Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
04 Jan | To Purchase | 2,480 | |
08 Jan | By Purchase Return | 280 | |
Balance | 2,200 |
Kunal Traders' Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
14 Jan | To Purchase | 5,200 | |
20 Jan | By Purchase Return | 200 | |
Balance | 5,000 |
Naresh's Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
17 Jan | To Purchase | 4,060 |
Kirit & Co.'s Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
24 Jan | To Purchase | 5,130 | |
28 Jan | By Purchase Return | 900 | |
Balance | 4,230 |
Tarun's Account
Date | Particulars | J.F. | Amount (₹) |
---|---|---|---|
15 Jan | To purchase of Furniture | 3,200 |
The following balances of ledger of M/s Marble Traders on April 01, 2017
2017
April
Description | Amount (₹) |
---|---|
Cash in hand | 6,000 |
Cash at bank | 12,000 |
Bills receivable | 7,000 |
Ramesh (Cr.) | 3,000 |
Stock (Goods) | 5,400 |
Bills payable | 2,000 |
Rahul (Dr.) | 9,700 |
Himanshu (Dr.) | 10,000 |
Transactions during the month were:
Date | Description | Amount (₹) |
---|---|---|
01 | Goods sold to Manish | 3,000 |
02 | Purchased goods from Ramesh | 8,000 |
03 | Received cash from Rahul in full settlement | 9,200 |
05 | Cash received from Himanshu on account | 4,000 |
06 | Paid to Ramesh by cheque | 6,000 |
08 | Rent paid by cheque | 1,200 |
10 | Cash received from Manish | 3,000 |
12 | Cash sales | 6,000 |
14 | Goods returned to Ramesh | 1,000 |
15 | Cash paid to Ramesh in full settlement | 3,700 |
Discount received | 300 | |
18 | Goods sold to Kushal | 10,000 |
20 | Paid trade expenses | 200 |
21 | Drew for personal use | 1,000 |
22 | Goods return from Kushal | 1,200 |
24 | Cash received from Kushal | 6,000 |
26 | Paid for stationery | 100 |
27 | Postage charges | 60 |
28 | Salary Paid | 2,500 |
29 | Goods purchased from Sheetal Traders | 7,000 |
30 | Sold goods to Kirit | 6,000 |
30 | Goods purchased from Handa Traders | 5,000 |
Journlise the above transactions and post them to the ledger.
To journalize the transactions and post them to the ledger, we'll follow a step-by-step approach. Let's start with the journal entries:
Journal Entries
Date | Details | Debit (₹) | Credit (₹) |
---|---|---|---|
April 01 | Cash in hand | 6,000 | |
Cash at bank | 12,000 | ||
Bills receivable | 7,000 | ||
Stock (Goods) | 5,400 | ||
Rahul | 9,700 | ||
Himanshu | 10,000 | ||
To Ramesh | 3,000 | ||
To Bills payable | 2,000 | ||
To Capital a/c | 45,100 | ||
(Being opening balances brought | |||
forward) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 01 | Manish a/c | 3,000 | |
To Sales | 3,000 | ||
(Goods sold to Manish) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 02 | Purchases a/c | 8,000 | |
To Ramesh | 8,000 | ||
(Goods purchased from Ramesh) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 03 | Cash a/c | 9,200 | |
Discount allowed a/c | 500 | ||
To Rahul | 9,700 | ||
(Cash received from Rahul in full | |||
settlement) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 05 | Cash a/c | 4,000 | |
To Himanshu | 4,000 | ||
(Cash received from Himanshu on | |||
account) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 06 | Ramesh a/c | 6,000 | |
To Bank | 6,000 | ||
(Paid to Ramesh by cheque) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 08 | Rent a/c | 1,200 | |
To Bank | 1,200 | ||
(Rent paid by cheque) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 10 | Cash a/c | 3,000 | |
To Manish | 3,000 | ||
(Cash received from Manish) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 12 | Cash a/c | 6,000 | |
To Sales | 6,000 | ||
(Cash sales) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 14 | Ramesh a/c | 1,000 | |
To Purchases returns | 1,000 | ||
(Goods returned to Ramesh) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 15 | Ramesh a/c | 3,700 | |
Discount received | 300 | ||
To Cash | 4,000 | ||
(Cash paid to Ramesh in full | |||
settlement) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 18 | Kushal a/c | 10,000 | |
To Sales | 10,000 | ||
(Goods sold to Kushal) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 20 | Trade expenses a/c | 200 | |
To Cash | 200 | ||
(Paid trade expenses) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 21 | Drawings a/c | 1,000 | |
To Cash | 1,000 | ||
(Drew for personal use) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 22 | Sales returns a/c | 1,200 | |
To Kushal | 1,200 | ||
(Goods returned from Kushal) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 24 | Cash a/c | 6,000 | |
To Kushal | 6,000 | ||
(Cash received from Kushal) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 26 | Stationery a/c | 100 | |
To Cash | 100 | ||
(Paid for stationery) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 27 | Postage a/c | 60 | |
To Cash | 60 | ||
(Paid postage charges) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 28 | Salary a/c | 2,500 | |
To Cash | 2,500 | ||
(Salary paid) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 29 | Purchases a/c | 7,000 | |
To Sheetal Traders | 7,000 | ||
(Goods purchased from Sheetal | |||
Traders) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 30 | Kirit a/c | 6,000 | |
To Sales | 6,000 | ||
(Goods sold to Kirit) | |||
----------- | ----------------------------------- | ------------- | ------------- |
April 30 | Purchases a/c | 5,000 | |
To Handa Traders | 5,000 | ||
(Goods purchased from Handa | |||
Traders) |
Ledger Posting
Below is a sample of postings to the ledger accounts.
Cash Account
Date | Particulars | Amount | Date | Particulars | Amount |
---|---|---|---|---|---|
01-Apr | Balance b/d | 6,000 | |||
03-Apr | Rahul | 9,200 | |||
05-Apr | Himanshu | 4,000 | |||
10-Apr | Manish | 3,000 | |||
12-Apr | Sales | 6,000 | |||
24-Apr | Kushal | 6,000 | 15-Apr | Ramesh | 3,700 |
20-Apr | Trade expenses | 200 | |||
21-Apr | Drawings | 1,000 | |||
26-Apr | Stationery | 100 | |||
27-Apr | Postage | 60 | |||
28-Apr | Salary | 2,500 | |||
-------- | ------------------- | -------- | -------- | ----------------- | -------- |
Total | 34,200 | Total | 7,560 |
Continue with similar postings in every account involved based on the journal entries.
This process should help you manage the bookkeeping tasks for M/s Marble Traders efficiently.
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Ask Chatterbot AINotes - Recording of Transactions-II | Class 11 Financial Accounting 1 | Accountancy
Comprehensive Guide: Recording of Transactions-II Class 11 Notes
Introduction
Recording transactions swiftly, accurately, and systematically is the backbone of robust accounting practices. This guide offers a detailed exploration of the methods utilised for recording financial transactions categorised under various special purpose books. These methods streamline the recording process, ensuring the financial health and accountability of any business, irrespective of its size.
Special Purpose Books
Need for Special Purpose Books
As businesses grow, the volume of financial transactions rises dramatically, making it impractical to record every transaction in a single journal. Special purpose books, like daybooks or subsidiary books, allow businesses to categorise and record similar types of transactions together, facilitating efficiency and accuracy.
Advantages:
- Economic Efficiency: Reduces the time and effort needed to record transactions.
- Division of Labour: Enables the segregation of duties among accounting staff, enhancing organisational efficiency.
Understanding the Cash Book
Cash Book Overview
A cash book is a specialised ledger where all cash transactions, both receipts and payments, are recorded. It serves dual purposes: acting both as a journal and a ledger for cash accounts.
Key Points:
- Records all cash transactions chronologically.
- Maintained monthly by most organisations.
- Eliminates the need for separate cash or bank accounts in the ledger.
Single Column Cash Book
A single column cash book is used to record all cash transactions in a simple, chronological order. It features only one column each for receipts and payments.
Example Format:
Date | Receipts | L.F. | Amount (£) | Date | Payments | L.F. | Amount (£) |
---|---|---|---|---|---|---|---|
01 Nov | Cash | 30,000 | 08 Nov | Insurance | 6,000 | ||
04 Nov | Gurmeet | 12,000 | 13 Nov | Furniture | 13,800 |
Double Column Cash Book
The double column cash book extends the functionality of the single column version by including separate columns for cash and bank transactions. This setup is particularly useful in modern businesses where a significant number of transactions are conducted via banks.
Example Format:
Date | Receipts | L.F. | Cash (£) | Bank (£) | Date | Payments | L.F. | Cash (£) | Bank (£) |
---|---|---|---|---|---|---|---|---|---|
01 Sept | Balance | 12,000 | 15,000 | 04 Sept | Goods | 6,000 | |||
08 Sept | Sales | 5,500 | 13 Sept | Machinery | 4,500 |
Handling Dishonoured Cheques
In cases of dishonoured cheques, adjustments are made in the cash book by marking the affected entries in the bank column and restoring the original statuses of the associated accounts.
Petty Cash Book
Importance in Large Organisations
The petty cash book manages small, repetitive payments such as conveyance, postage, and office supplies, preventing these minor transactions from cluttering the main cash book.
Imprest System
The petty cashier is provided with a fixed amount (imprest), from which they make all petty payments. At regular intervals, the petty cashier is reimbursed for the spent amount, restoring the imprest balance.
Example Format:
Date | Details | Amount (£) |
---|---|---|
02 May | Auto fare | 55 |
03 May | Courier services | 40 |
04 May | Postal stamps | 105 |
05 May | Office supplies | 225 |
Advantages
- Saves Time: The chief cashier can focus on significant transactions.
- Enhanced Control: Limits the risk of fraud by dividing responsibilities.
- Convenience: Simplifies the recording of minor expenses.
Recording Entries in Special Purpose Books
Purchases (Journal) Book
Used for recording all credit purchases. Cash purchases are noted in the cash book. Entries are sourced from purchase invoices.
Example Format:
Date | Invoice No. | Supplier | Amount (£) |
---|---|---|---|
04 Aug | 3250 | Neema Electronics | 1,82,000 |
10 Aug | 8260 | Pawan Electronics | 31,050 |
Purchases Return (Journal) Book
Logs returns of purchased goods due to quality issues or defects. These entries often use debit notes.
Example Format:
Date | Debit Note No. | Supplier | Amount (£) |
---|---|---|---|
12 Aug | 03/2017 | Neema Electronics | 13,200 |
Sales (Journal) Book
Records all credit sales, with cash sales being noted in the cash book. Transactions are supported by sales invoices.
Example Format:
Date | Invoice No. | Customer | Amount (£) |
---|---|---|---|
06 Apr | 178 | Raman Traders | 4,850 |
09 Apr | 180 | Nutan Enterprises | 21,000 |
Sales Return (Journal) Book
Captures returns of sold goods from customers, using credit notes.
Example Format:
Date | Credit Note No. | Customer | Amount (£) |
---|---|---|---|
10 Apr | 10/2017 | Raman Traders | 2,100 |
Journal Proper and Its Uses
When to Use Journal Proper
Journal proper is used for transactions that do not fit into the specific categories of other journals, including rectification entries, transfer entries, and adjustment entries.
Common Entries:
- Dishonoured cheques
- Purchases or sales of items not classified as goods
- Owner withdrawals
- Goods distributed as samples
- Consignment and joint venture transactions
Balancing Ledger Accounts
Importance of Balancing
Balancing ledger accounts is crucial for verifying the accuracy of recorded transactions and determining the financial position at the end of an accounting period.
Steps:
- Total both debit and credit sides.
- Calculate the difference and enter it on the shorter side.
- Carry forward the balance to the next accounting period.
Practical Example
Consider the following transactions for April 2017 to see a balanced ledger in action.
Transactions:
- 01 Apr: Started business with £1,00,000 in cash
- 02 Apr: Purchased furniture worth £6,000
- 04 Apr: Credit purchase from Handa Co. of £2,450
Ledger: Capital Account
Date | Particulars | Amount (£) | Date | Particulars | Amount (£) |
---|---|---|---|---|---|
01 Apr | Cash | 1,00,000 | |||
Handa Co. Account
Date | Particulars | Amount (£) | Date | Particulars | Amount (£) |
---|---|---|---|---|---|
04 Apr | Purchases | 2,450 | |||
Adding Visual Aid
Sample Flowchart - Recording in Special Purpose Books
graph TD;
A[Transactions]
B[Cash Book]
C[Purchases Journal]
D[Sales Journal]
E[Petty Cash Book]
F[General Ledger]
A --> B
A --> C
A --> D
B --> F
C --> F
D --> F
E --> F
Conclusion
Maintaining accurate records of financial transactions is integral to the health of any business. By understanding and implementing efficient recording practices through special purpose books, cash books, and journal proper entries, businesses can ensure robust financial management and accountability.
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