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Class 11 Commerce Accountancy Chapter 4 – Recording Of Transactions – 2

Class 11 Commerce Accountancy Chapter 4 – Recording Of Transactions – 2

Short Answers for NCERT Accountancy Solutions Class 11 Chapter 4

1. Briefly state how the cash book is both journal and a ledger?

Cash book functions as journal because it is the original book of entry where all transactions are first recorded just like a journal and it functions as a ledger as it records the credit and debit cash transactions of a company without the need of a separate cash account.

2. What is the purpose of contra entry?

Contra entry are those entries that impact both debit and credit side in accounting based on the situation. For example if a debit entry is recorded in an account, similar credit entry must be recorded. Its purpose is to indicate transactions that effect both cash and bank balances. These transactions have no impact on the financial position of the business and are denoted by the letter C in the L.F. column.

3. What are special purpose books?

Subsidiary books recording business transaction are known as special purpose books. Business transactions can be large in number making it difficult to record all in a single journal. Hence sub-dividing journals make recording of transactions quick, accurate and efficient. Some examples are cash book, purchases book, and sales book.

4. What is petty cash book? How it is prepared?

Recording of repetitive expenses in cash book will burden the cashier. Hence, a separate book is created where petty expenses are recorded. Examples of such type of expenses are: Stationery, Refreshment, Postage, and Conveyance. Petty cash book is maintained by Petty cashier.

Preparation is mostly done by Imprest System as it is more convenient. In this system, petty cashier is given a pre-defined sum of the money for a period. At the end of the period, the amount spent by him is reimbursed by cashier so that the cashier has the same amount again at the start of the period.

5. Explain the meaning of posting of journal entries?

It refers to the process of transferring journal entries to their respective ledgers. Each transaction gets recorded in a journal and are subsequently transferred to respective ledgers

6. Define the purpose of maintaining subsidiary journal.

Many of the business transactions are repetitive in nature. Due to this reason, transactions which are similar in nature are recorded in special journals also known as daybooks or subsidiary journals.

Maintaining a subsidiary journal helps has following benefits:

1. Recording is faster and time saving

2. Records are easily accessible

3. Proper division of labour

7. Write the difference between return inwards and return outwards.

Basis of Comparison Return Inwards Return Outwards
Meaning Goods returned to business by their customers Goods purchased by business are returned to the suppliers.
Balance It has debit balance. It has credit balance.
Treatment Deducted from Sales in the Trading Account. Deducted from Purchases in the Trading Account.
Issued Credit note is prepared by the seller. Debit note is prepared by the buyer.
Reduction Reduces the payment from the Debtors. Reduces the payment made to the Creditors.
Term It is also known as Sales Returns. It is also known as Purchases Returns.

8. What do you understand by ledger folio?

It refers to a column in the journal where page number of the ledger book on which the relevant account appears is recorded is called as Ledger Folio, also abbreviated as L.F.

9. What is difference between trade discount and cash discount?

Basis of Comparison Trade Discount Cash Discount
Meaning Discount offered on purchase of goods. Discount for making payment.
Recording in books Not recorded in accounting books Recorded in cash book either on debit or credit side depending on discount provided or received.
Purpose Encourage increase in sale. Encourage on time payment.

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

The following process describes the preparation of ledger from journal:

Locate the account to be debited in the ledger as entered in the journal

Enter date of transaction into date column of debit side.

Mention the account from which it is debited in journal, is written in the particulars column.

Enter the page number of the journal in the J.F. column. The corresponding page number of the ledger account is written in the L.F. column of the journal.

Enter amount in the amount column in the debit side.

For credit side follow the same procedure for crediting the entry.

11. What do you understand by Imprest amount in petty cash book?

Imprest amount is a definite sum of money that is provided to petty cashier for a certain period which can be a week or month. Reimbursement is done after the end of the period in order to start a new cycle.

.

Long Answers for NCERT Accountancy Solutions Class 11 Chapter 4

1. Explain the need for drawing up the special purpose books.

Special purpose books are beneficial in:

  • Accuracy: As each journal is managed by a different accountant having specific expertise, it improves accuracy and reduces defects.
  • Efficiency: Increases efficiency by dividing workload
  • Concise Descriptions: The journal describes the purpose of recording. For example a record in the purchase journal, will be understood by default that it is a purchase related transaction.
  • Minimal Posting: Reduces the volume of posting as totals can be done periodically.
  • Fraud Prevention: As recording of different journals are assigned to different individual, fraud prevention is prevented.
  • Faster process: As multiple books are handled by multiple accountants, the recording work moves faster.

2. What is cash book? Explain the types of cash book.

A cash book is also known as book of original entry in which all transactions related to cash receipts and cash payments are recorded. All cash deposits and withdrawals are recorded in a sequential order. Cash receipts are recorded in cash column and bank deposits are recorded in bank column, and all cash deposits are added in cash column, cheque payment get recorded in credit side under bank column. It serves as a principal book.

Types of cash book are:

1. Single Column Cash Book: In this type of cash book all recordings related to cash takes place, it is useful for organisations that maintain only cash transactions. It contains records of cash receipts and cash payments.

2. Double Column Cash Book: The two column cash book is also referred to as the double column cash book. It contains two money columns on both sides (i.e. debit and credit), one side is for recording cash transactions while the other is for recording bank transactions.

Cash transactions are recorded in cash column and thus functions as a cash account whereas bank column records all bank related transactions such as payments made by cheques and functions as a bank account. Some organisations prefer the double column cash book as it contains both cash and bank columns and thus it is easy to maintain instead of maintaining two separate ledgers.

Cash Book
Dr. Cr.
Date Particulars L.F. Cash₹ Bank₹ Date Particulars L.F. Cash₹ Bank₹
Cash (C) – Bank (C) –

3. Triple Column Cash Book: Triple column cashbook is a type of cash book that has provisions for three columns which are cash, bank and discount. It is used by large firms that frequently deal with cash and bank transactions as well as which allow cash discounts. The procedure of recording data is similar to double column cash book. The cash and bank columns are periodically totalled and balanced, while the discount column is only totalled. Discount allowed is recorded on the debit while discount received from suppliers is recorded on credit side.

4. Petty Cash Book: A cash book that records all those expenses that are small and hold little value is called a petty cash book. The transactions related to stamps, stationery, postage, daily wages etc. are recorded in petty cash book.

3. What is contra entry? How can you deal this entry while preparing double column cash book?

An entry that is recorded to reverse an entry on the opposite side of an account is called contra entry. For example when a debit entry gets recorded in an account, a contra entry will be posted in the credit side. Similarly a contra entry will be posted in debit side if an entry gets recorded in credit side.

Some transactions that can lead to contra entry are provided below.

  1. Opening of a bank account
  2. Depositing cash into bank
  3. Withdrawal from bank

These transactions are recorded in a double column Cash Book as shown below.

Cash Book
Dr. Cr.
Date Particulars L.F. Cash₹ Bank₹ Date Particulars L.F. Cash₹ Bank₹
Cash (C) Bank (C)

4. What is petty cash book? Write the advantages of petty cash book?

Recording of repetitive expenses in cash book will burden the cashier. Hence, a separate book is created where petty expenses are recorded. Examples of such type of expenses are: Stationery, Refreshment, Postage, and Conveyance. Petty cash book is maintained by Petty cashier.

Preparation is mostly done by Imprest System as it is more convenient. In this system, petty cashier is given a pre-defined sum of the money for a period. At the end of the period, the amount spent by him is reimbursed by cashier so that the cashier has the same amount again at the start of the period.

The Performa of Petty Cash Book is given below.

Petty Cash Book
Dr. Cr.
Amount Received Date Particulars Voucher No. Amount Paid₹ Analysis of Payments
Postage Stationery Conveyance Telephone and Telegram Miscellaneous Remarks

Advantages of Petty Cash Book:

1. Division of labour: By delegating the work to a petty cashier the cashier is able to look into other aspects of a firm.

2. Avoid bulky cash books: Recording repetitive transactions in a cash book makes it bulky, petty cash makes it easy and avoids making cash book bulky.

3. Less error prone: Head cashier will be making periodic audits on the petty cash book, so it will be error free.

4. Ease of posting: Only the petty expenses are recorded periodically which makes posting easier.

5. Describe the advantages of sub-dividing the Journal.

Sub dividing of Journal has following advantages:

Accountability: As each accounts are handled by individual accountants, it makes them more accountable and ensure that accounts are properly maintained.

Accuracy: Each accountant will be specialized in the work assigned to them and hence less chances of errors.

Division of Labour: As accounts are maintained by separate accountants it ensures faster recording and parallel recording of transactions.

Economical: As division of labour brings in specialization, the process becomes efficient and there by becomes economical.

Ease of Audit and analysis: The analysis of transactions which are similar in nature becomes easier.

Productivity: As the accountants gain expertise in handling specific account, in increases their productivity.

6. What do you understand by balancing of account?

The accounts in the ledger are balanced at periodic intervals of daily, weekly, fortnightly, monthly, quarterly or any other pre-defined periodic intervals. The goal of balancing is to determine the net position of each amount. The following steps are involved in the balance of the accounts.

The debit and credit side are totalled.

The total on the side which is higher is written on the corresponding side.

The difference between both the sides is recorded on the shorter side. This makes the total on both the sides equal.

In case the debit side exceeds the credit side, the difference is written on the credit side. This is called Debit Balance.

If the credit side exceeds the debit sided, the difference is written on the debit side. This is called Credit Balance.

The words balance c/d are written against the amount of the difference between the two sides. Balance c/d stands for balance carried down.

The amount of balance is brought down (b/d) in the next accounting period. It is denoted with Balance b/d. This indicates that it is a continuing account, till finally settled or closed. Here Balance b/d stands for Balance Brought Down.

The accounts of expenses losses and gains/revenues are not balanced. Instead, these are transferred to trading and profit and loss account.

Numerical Questions for NCERT Accountancy Solutions Class 11 Chapter 4

1. 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

The solution for this question can be represented in a cash book format as follows:

Cash book
Dr. Cr.
Date Receipts L.F. Amount
₹		 Date Payments L.F. Amount
₹
2016 2016
01 Dec Balance b/d 12,000 07 Dec Rent 2,000
05 Dec Bhanu 4,000 10 Dec Purchases 6,000
15 Dec Sales 9,000 18 Dec Stationery 300
22 Dec Rahul 2,000
28 Dec Salaries 1,000
30 Dec Rent 500
31 Dec Balance c/d 13,200
25,000 25,000

2. Enter the following transaction in Simple cash book for December 2018:

2018

₹
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 D. Kumar 1,200
30 Paid rent 600

The solution for this question is as follows:

Cash book
Dr. Cr.
Date Receipts L.F. Amount
₹		 Date Payments L.F. Amount
₹
2018 2018
01 Dec Balance b/d 7,750 06 Dec Sonu 45
15 Dec Parkash 960 08 Dec Purchases 600
20 Dec Sales 500 25 Dec S.Kumar 1,200
30 Dec Rent 600
31 Dec Balance c/d 7,760
9,210 9,210

3. Record the following transaction in simple cash book for November 2017:

 

  ₹
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
30 Paid salary 1,000

The solution for this question is as follows:

Cash book
Dr. Cr.
Date Receipts L.F. Amount
₹		 Date Payments L.F. Amount
₹
2017 2017
01 Nov Balance b/d 12,500 04 Nov Hari 600
12 Nov Amit 1,960 07 Nov Purchases 800
16 Nov Sales 800 20 Nov Manish 590
25 Nov Cartage 100
30 Nov Salaries 1,000
30 Nov Balance c/d 12,170
15,260 15,260

4. 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 Dinesh and received a cheque 20,000
10 Paid to Smita 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

The solution for the question is given below:

Cash book
Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2016 2016
01 Dec Capital 1,20,000 03 Dec Bank C 50,000
03 Dec Cash C 50,000 10 Dec Sushmita 20,000
06 Dec Dinesh 20,000 14 Dec Bank C 20,000
14 Dec Cash C 20,000 20 Dec Cartage 500
22 Dec Rani 12,000 30 Dec Drawings C 2,000
27 Dec Commission 5,000 31 Dec Balance c/d 64,500 70,000
1,57,000 70,000 1,57,000 70,000

5. 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

The transactions can be represented in the form of a bank column cash book as follows:

Cash book
Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2016 2016
01 Dec Capital 80,000 04 Dec Bank C 50,000
04 Dec Cash C 50,000 15 Dec Purchases 8,000
10 Dec Rahul 1,000 22 Dec Purchases 10,000
30 Dec Bank C 2,000 25 Dec Ram 20,000
30 Dec Cash C 2,000
31 Dec Rent 1,000
31 Dec Balance c/d 5,000 37,000
83,000 50,000 83,000 50,000

6. Prepare double column cash book from the following information for September 2017:

 

     ₹
01 Cash in hand 7,500
  Bank overdraft 3,500
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

The solution for this question is as follows:

Cash Book
Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2017 2017
01 Sep Balance b/d 7,500 01 Sep Balance b/d (Overdraft) 3,500
05 Sep Sales 7,000 03 Sep Wages 200
10 Sep Cash C 4,000 10 Sep Bank C 4,000
15 Sep Purchases 2,000
20 Sep Rent 500
25 Sep Drawings 400
30 Sep Salaries 1,000
30 Sep Balance c/d (Overdraft) 1,900 30 Sep Balance c/d 8,800
14,500 5,900 14,500 5,900

7. Enter the following transactions in double column cash book of M/s Ambica Traders for November 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 cheque 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 2,000
30 Paid rent by cheque 1,000

The solution for this question is as follows:

M/s. Ambica Traders
Cash Book
Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2017 2017
01 Nov Capital 50,000 03 Nov Bank C 30,000
03 Nov Cash C 30,000 05 Nov Purchases 10,000
15 Nov Rohan 7,000 10 Nov Office Machine 5,000
18 Nov Sales 8,000 20 Nov Bank C 7,000
20 Nov Cash C 7,000 22 Nov Cartage 500
25 Nov Drawings 2,000
30 Nov Rent 1,000
30 Nov Balance c/d 11,000 35,500
65,000 37,000 65,000 37,000

8. Enter the following transaction in a double column cash book of M/s Mohit Traders for January 2017:

    ₹
01 Cash in hand 3,500
  Bank overdraft 2,300
03 Goods purchased for cash 1,200
05 Paid wages 200
10 Cash sales 8,000
15 Deposited into bank 6,000
22 Sold goods for cheque which was deposited into 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

The solution for this question in the form of a double column cash book is as follows:

M/s. Mohit Traders
Cash Book
Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2017 2017
01 Jan Balance b/d 3,500 01 Jan Balance b/d (overdraft) 2,300
10 Jan Sales 8,000 03 Jan Purchases 1,200
15 Jan Cash C 6,000 05 Jan Wages 200
22 Jan Sales 2,000 15 Jan Bank C 6,000
25 Jan Rent 1,200
28 Jan Drawings 1,000
31 Jan Purchases 1,000
31 Jan Balance c/d 4,100 2,500
11,500 8,000 11,500 8,000

9. Prepare double column cash book from the following transactions for the year December 2017:

 

    ₹
01 Cash in hand 17,500
  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

The solution is represented in the following table as follows:

Dr. Cr.
Date Receipts L.F. Cash
₹		 Bank
₹		 Date Payments L.F. Cash
₹		 Bank
₹
2017 2017
01 Dec Balance b/d 17,500 5,000 03 Dec Purchases 3,000
05 Dec Jasmeet 10,000 10 Dec Bank C 10,000
08 Dec Sales 7,000 12 Dec Purchases 20,000
10 Dec Cash C 10,000 15 Dec Establishment Expenses 1,000
18 Dec Sales 7,000 20 Dec Bank C 10,000
20 Dec Cash C 10,000 24 Dec Trade Expenses 500
27 Dec Commission 6,000 29 Dec Rent 2,000
30 Dec Drawings 1,200
31 Dec Salaries 6,000
31 Dec Balance c/d 8,800 10,000
41,500 31,000 41,500 31,000

For the month of December 2017, the cash in hand is ₹.8, 800 and the cash in bank is 10,000.

10. 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:

    ₹
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

The transactions can be represented in a bank column cash book as shown below:

Books of M/s. Ruchi Trader
Cash Book
Dr. Cr.
Date Particulars L.F. Cash ₹ Bank₹ Date Particulars L.F. Cash ₹ Bank₹
2017 2017
Jul.01 Balance b/d 1,354 7,560 Jul.05 Purchases 6,000
Jul.03 Sales 2,300 Jul.12 Trade Expenses 700
Jul.08 Sales 10,000 Jul.18 Motor Car 15,000
Jul.15 Sales 20,000 Jul.25 Manisha (Dishonour) 10,000
Jul.20 Manisha 10,000 Jul.28 Rent 2,000
Jul.22 Sales 7,000 Jul.29 Telephone Expenses 500
Jul.31 Drawings 2,000
Jul.31 Balance c/d 15,954 6,060
20,654 37,560 20,654 37,560

For month of July Cash in Hand is ₹. 15,954 and the Cash in Bank is ₹ 6,060.

11. Record the following transactions during the week ending June. 30, 2017 with a weekly imprest ₹ 500

 

    ₹
24 Stationery 100
25 Bus fare 12
25 Cartage 40
26 Taxi fare 80
27 Wages to casual labour 90
29 Postage 80

The petty cash book can be created with the following transactions as shown below.

Petty Cash Book
Amount
Received		 Date Particulars Voucher
No.		 Amount
Paid		 Analysis of Payments Remarks
₹ 2017
Jun		     ₹ Postage Telephone
& Telegram		 Conveyance Stationery Misc.
2017
500 24 Jun Cash Received
24 Jun Stationery 100 100
25 Jun Bus Fare 12 12
25 Jun Cartage 40 40
26 Jun Taxi Fare 80 80
27 Jun Wages 90 90
27 Jun Postage 80 80
402 80 132 100 90
27 Jun Balance c/d 98
500 500
98 28 Jun Balance b/d
402 28 Jun Cash received

12. Prepare petty cash book from the following transactions. The imprest amount is ₹ 2,000.

July
2017		   ₹
01 Paid cartage 50
02 STD charges 40
02 Bus fare 20
03 Postage 30
04 Refreshment for employees 80
06 Courier charges 30
08 Refreshment of customer 50
10 Cartage 35
15 Taxi fare to manager 70
18 Stationery 65
20 Bus fare 10
22 Fax charges 30
25 Telegrams charges 35
27 Postage stamps 200
29 Repair on furniture 105
30 Laundry expenses 115
31 Miscellaneous expenses 100

The petty cash book can be created from the following transactions as shown below

Petty Cash Book
Amount
Received		 Date Particulars Voucher
No.		 Amount
Paid		 Analysis of Payments Remarks
₹ 2017
July		     ₹ Postage Telephone
& Telegram		 Conveyance Stationery Misc.
2017
2000 01 Jul Cash received
01 Jul Cartage 50 50
02 Jul STD Charges 40 40
02 Jul Bus fare 20 20
03 Jul Postage 30 30
04 Jul Refreshments 80 80
06 Jul Courier Charges 30 30
08 Jul Refreshments 50 50
10 Jul Cartage 35 35
15 Jul Taxi fare 70 70
18 Jul Staionery 65 65
20 Jul Bus fare 10 10
22 Jul Fax 30 30
25 Jul Telegram Charges 35 35
27 Jul Postage 200 200
29 Jul Furniture Repair 105 105
30 Jul Laundry 115 115
31 Jul Misc 100 100
1065 260 105 185 65 450
31 Jul Balance c/d 935
2,000 2,000
935 01 Aug Balance b/d
1,065 01 Aug Cash received

Cash Balance at the end of the week is ₹.935

13. Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2017:

01 Bought from Rahul Traders as per invoice no. 20041
  40 Registers @ ₹ 60 each
  80 Gel Pens @ ₹ 15 each
  50 note books @ ₹ 20 each
  Trade discount 10%.
15 Bought from Global Stationers as per invoice no. 1132
  40 Ink Pads @ ₹ 8 each
  50 Files @ ₹ 10 each
  20 Color Books @ ₹ 20 each
  Trade Discount 5%
23 Purchased from Lamba Furniture as per invoice no. 3201
  2 Chairs @ 600 per chair
  1 Table @ 1,000 per table
25 Bought from Mumbai Traders as per invoice no. 1111
  10 Paper Rim @ ₹ 100 per rim
  400 drawing Sheets @ ₹ 3 each
  20 Packet water colour @ ₹ 40 per packet

From the above question we see that Gupta Traders deals with stationery. On 23rd July the purchase of furniture is toward the use of company and hence, will not be considered as an entry in purchase book.

The purchase book for the above mentioned transactions is created below.

Books of M/s Gupta Traders
Purchases Book
Date Invoice
No.		 Name of the Supplier
(Account to be credited)		 L.F. Details
₹		 Amount
₹
2017
01 Jul 20041 Rahul Traders
40 Registers @ ₹ 60 each 2,400
80 Gel Pens @ ₹ 15 each 1,200
50 Note Books @ ₹ 20 each 1,000
4,600
Less: Trade Discount 10% (460) 4,140
15 Jul 1132 Global Stationers
40 Ink Pads @ ₹ 8 each 320
50 Files @ ₹ 10 each 500
20 Colour Books @ ₹ 20 each 400
1,220
Less: Trade discount 5% (61) 1,159
25 Jul 1111 Mumbai Traders
10 Paper rims @ ₹ 100 each 1,000
400 Drawing Sheets @ ₹ 3 each 1,200
20 Packets Water Colour @ ₹ 40 per pack 800 3,000
Purchases Account 8,299

The purchase book does not contain a details column but it is included here for helping the students understand the concept.

14. Enter the following transactions in sales (journal) book of M/s. Bansal electronics:

2014

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 @ ₹ 3,000 per T.V.
  2 T.V. sets (21.) Colour @ ₹ 4,800 per T.V.
22 Sold to Handa Electronics as per bill no.4,399
  10 Tape recorders @ ₹ 600 each
  5 Walkman @ ₹ 300 each
28 Sold to Harish Trader as per bill no.4430
  10 Mixer Juicer Grinder @ ₹ 800 each.

The sales journal book of M/s. Bansal Electronics is created as shown below

Books of M/s Bansal Electronics
Sales Book
Date Bill No. Name of the Customer
(Account to be debited)		 L.F. Details
₹		 Amount
₹
2014
Sep 01 4321 Amit Traders
20 Pocket Radio @ ₹ 70 Per Radio 1,400
2 T.V Set, B&W (6″) @ ₹ 800 Per T.V. 1,600 3,000
Sep 10 4351 Arun Electronics
5 T.V. sets (20″) B&W @ ₹ 3,000 per T.V. 15,000
2 T.V. sets (21″) Colour @ ₹ 4,800 per T.V 9,600 24,600
Sep 22 4399 Handa Electronics
10 Tape Recorders @ ₹ 600 each 6,000
5 Walkman @ ₹ 300 each 1,500 7,500
Sep 28 4430 Harish Traders
10 Mixer Juicer Grider @ ₹ 800 each 8,000 8,000
Sales Account 43,100

15. Prepare Return Inward Journal (Book) from the following transactions of M/s Bansal Electronics for August 2017:

    ₹
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

Return Inward Book for M/s Bansal Electronics is as shown below:

Sales Return Book
Date Credit Note No. Name of Customer(Account to be credited) L.F. Amount₹
2017
Aug.04 M/s Gupta Traders 1,500
Aug.10 M/s Harish Traders 800
Aug 18 M/s Rahul Traders 1,200
Aug.28 Sushil Traders 1,000
Sales Return Account 4,500

16. Prepare a purchases return (journal) book from the following transactions for May 2017.

    ₹
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 ₹ 2,000 less 10% trade discount.  
28 Return outwards to M/s Handa Traders 550

The purchase return journal for the transactions are shown below:

Purchases Return Book
Date Debit Note No. Name of Supplier  (Account to be debited)   L.F. Amount₹
2017
May. 05 M/s Kartik Traders 1,200
May. 10 Sahil Pvt. Ltd. 2,500
May. 17 M/s Kohinoor Trader
List Price 2,000
Less: 10% Trade discount (200) 1,800
May. 28 M/s Handa Traders 550
Purchases Return Account 6,050

17. Prepare proper subsidiary books and post them to the ledger from the following transactions for the month of January 2017:

    ₹
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 6,600
  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.  

Subsidiary book and ledger entries for the transactions are shown below:

Journal
Purchases Book
Date InvoiceNo. Name of Supplier (Accounts to be credited)  L.F. Amount ₹
2017
Jan.04 Kushal Traders 2,480
Jan.14 Kunal Traders 5,200
Jan.17 Naresh 4,060
Jan.24 Kirit and Co. 5,700
Less: Trade Discount 10% (570) 5,130
Purchases Account 16,870
Sales Book
Date InvoiceNo. Name of Customer(Accounts to be debited) L.F. Amount ₹
2017
Jan. 01 Sachin 5,000
Jan.06 Manish Traders 2,100
Jan.10 Mukesh 3,300
Jan.25 Shri Chand 6,600
Less: 5% Trade Discount (330) 6,270
Jan.26 Ramesh Brothers 4,000
Sales Account 20,670
Sales Return Book
Date CreditNote Name of Customer (Accounts to be credited) L.F. Amount ₹
2017
Jan.07 Sachin 600
Jan.22 Mukesh 250
Jan.28 Ramesh Brothers 500
Sales Return Account 1,350
Purchases Return Book
Date DebitNote Name of Supplier(Accounts to be debited)  L.F. Amount₹
2017
Jan.08 Kushal Traders 280
Jan.20 Kunal Traders 200
Jan.28 Kirit and Co. 1,000
Less: 10% Trade Discount (100) 900
Sales Return A/c 1,380
Journal Proper
Date Particulars L.F. DebitAmount

₹

 CreditAmount

₹
2017  
Jan.15 Furniture A/c Dr. 3,200
To Tarun 3,200
(Furniture purchased from Tarun)
Ledger
Purchases Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
Jan.28 Sundries as per PurchasesBook 16,870
Jan.28 Balance c/d 16,870
16,870 16,870
Sales Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
Jan.28 Sundries as per Sales Book 20,670
Jan.28 Balance c/d 20,670
20,670 20,670
Sales Return Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.28 Sundries as per Sales Return Book 1,350
Jan.28 Balance c/d 1,350
1,350 1,350
Purchases Return Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.28 Sundries as per Purchases Return Book 1,380
Jan.28 Balance c/d 1,380
1,380 1,380
Sachin’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.01 Sales 5,000 Jan.07 Sales Return 600
Jan.28 Balance c/d 4,400
5,000 5,000
Kushal Traders’ Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
Jan.08 Purchases Return 280 Jan.04 Purchases 2,480
Jan.28 Balance c/d 2,200
2,480 2,480
Manish Traders’ Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
Jan.06 Sales 2,100
Jan.28 Balance c/d 2,100
2,100 2,100
Mukesh’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.10 Sales 3,300 Jan.22 Sales Return 250
Jan.28 Balance c/d 3,050
3,300 3,300
Kunal Traders’ Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.20 Purchase Return 200 Jan.14  Purchases 5,200
Jan.28 Balance c/d 5,000
5,200 5,200
Furniture Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
Jan.15 Tarun 3,200
Jan.28 Balance c/d 3,200
3,200 3,200
Tarun’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.15 Furniture 3,200
Jan.28 Balance c/d 3,200
3,200 3,200
Naresh’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.17 Purchases 4,060
Jan.28 Balance c/d 4,060
4,060 4,060
Kirit & Co. Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
Jan.28 Purchases Return 900 Jan.24 Purchases 5,130
Jan.28 Balance c/d 4,230
5,130 5,130
Shri Chand & Co. Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
Jan.25 Sales 6,270
Jan.28 Balance c/d 6,270
6,270 6,270
Ramesh’s Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
Jan.26 Sales 4,000 Jan.28 Sales Return 500
Jan.28 Balance c/d 3,500
4,000 4,000

18. The following balances of ledger of M/s Marble Traders on May 01, 2017

  ₹
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:

May   ₹
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
  Goods purchased from Handa Traders 5,000

 

Journalise the above transactions and post them to the ledger.

The above transactions are journalized and posted to ledger as shown below:

Books of M/s. Marble Traders
Journal 
Date Particulars L.F. DebitAmount

₹

 CreditAmount

₹
2017 Cash A/c Dr. 6,000
May.01 Bank A/c Dr. 12,000
Bills Receivable A/c Dr. 7,000
Stock A/c Dr. 5,400
Rahul’s A/c Dr. 9,700
Himanshu A/c Dr. 10,000
To Ramesh’s A/c  3,000
To Bills Payable A/c 2,000
To Capital A/c (Balancing figure ) 45,100
(Balance brought from last year)
May.01 Manish Dr. 3,000
To Sales A/c 3,000
(Goods sold to Manish)
May.02 Purchases A/c Dr. 8,000
To Ramesh 8,000
(Goods purchased from Ramesh)
May.03 Cash A/c Dr. 9,200
Discount Allowed A/c Dr. 500
To Rahul 9,700
(Cash received from Rahul and discount allowed)
May. 05 Cash A/c Dr. 4,000
To Himanshu 4,000
(Cash received from Himanshu)
May.06 Ramesh Dr. 6,000
To Bank A/c 6,000
(Cheque issued to Ramesh)
May. 08 Rent A/c Dr. 1,200
To Bank A/c 1,200
(Rent paid by cheque)
May.10 Cash A/c Dr. 3,000
To Manish 3,000
(Cash received from Manish)
May.12 Cash A/c Dr. 6,000
To Sales A/c 6,000
(Goods sold for cash)
May.14 Ramesh Dr. 1,000
To Purchases Return A/c 1,000
(Goods returned to Ramesh)
May.15 Ramesh Dr. 4,000
To Cash A/c 3,700
To Discount Received A/c 300
(Cash paid to Ramesh and discount received)
May.18 Kushal Dr. 10,000
To Sales A/c 10,000
(Goods sold to Kushal)
May.20 Trade Expenses A/c Dr. 200
To Cash A/c 200
(Trade expenses paid)
May.21 Drawings A/c Dr. 1,000
To Cash A/c 1,000
(Cash withdrawn for personal use)
May.22 Sales Return A/c Dr. 1,200
To Kushal 1,200
(Kushal returned goods)
May.24 Cash A/c Dr. 6,000
To Kushal 6,000
(Cash received from Kushal)
May.26 Stationery A/c Dr. 100
To Cash A/c 100
(Stationery paid)
May.27 Postages A/c Dr. 60
To Cash A/c 60
(Postage charges paid)
May.28 Salaries A/c Dr. 2,500
To Cash A/c 2,500
(Salary paid)
May.29 Purchases A/c Dr. 7,000
To Sheetal Traders 7,000
(Goods purchased from Sheetal Traders)
May.30 Kirit Dr. 6,000
To Sales A/c 6,000
(Goods sold to Kirit)
May.30 Purchases A/c Dr. 5,000
To Handa Traders 5,000
(Goods purchased from Handa Traders)
Total 1,35,060 1,35,060
Ledger
Cash Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
May.01 Balance b/d 6,000 May.15 Ramesh 3,700
May.03 Rahul 9,200 May.20 Trade Expenses 200
May.05 Himanshu 4,000 May.21 Drawings 1,000
May.10 Manish 3,000 May.26 Stationary 100
May.12 Sales 6,000 May.27 Postage 60
May.24 Kushal 6,000 May.28 Salaries 2,500
May.30 Balance c/d 26,640
34,200 34,200
Bank Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.01 Balance b/d 12,000 May.06 Ramesh 6,000
May.08 Rent 1,200
May.30 Balance c/d 4,800
12,000 12,000

  

Bills Receivable Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount₹
2017 2017
May.01 Balance b/d 7,000
May.30 Balance c/d 7,000
7,000 7,000
Stock Account
Dr. Cr.
Date Particulars J.F. Amount  ₹ Date Particulars J.F. Amount  ₹
2017 2017
May.01 Balance b/d 5,400
May.30 Balance c/d 5,400
5,400 5,400
Rahul’s Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
May.01 Balance b/d 9,700 May.03 Cash 9,200
May.03 Discount Allowed 500
9,700 9,700

  

Himanshu’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.01 Balance b/d 10,000 May.05 Cash 4,000
May.30 Balance c/d 6,000
10,000 10,000
Ramesh’s Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.06 Bank 6,000 May.01 Balance b/d 3,000
May.14 Purchases Return 1,000 May.02 Purchases 8,000
May.15 Cash 3,700
May.15 Discount Received 300
11,000 11,000
Bills Payable Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.01 Balance b/d 2,000
May.30 Balance c/d 2,000
2,000 2,000

  

Capital Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount  ₹
2017 2017
May.01 Balance b/d 45,100
May.30 Balance c/d 45,100
45,100 45,100

  

Manish’s Account
Dr. Cr.
Date Particulars J.F. Amount  ₹ Date Particulars J.F. Amount  ₹
2017 2017
May.01 Sales 3,000 May.10 Cash 3,000
3,000 3,000

  

Sales Account
Dr. Cr.
Date Particulars J.F. Amount  ₹ Date Particulars J.F. Amount  ₹
2017 2017
May.01 Manish 3,000
May.12 Cash 6,000
May.18 Kushal 10,000
May.30 Balance c/d 25,000 May.30 Kirit 6,000
25,000 25,000

  

Purchases Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount  ₹
2017 2017
May.02 Ramesh 8,000
May.29 Sheetal Traders 7,000
May.30 Handa Traders 5,000 May.30 Balance c/d 20,000
20,000 20,000

  

Discount Allowed Account
Dr. Cr.
Date Particulars J.F. Amount  ₹ Date Particulars J.F. Amount  ₹
2017 2017
May.03 Rahul 500
May.30 Balance c/d 500
500 500

  

Rent Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.08 Bank 1,200
May.30 Balance c/d 1,200
1,200 1,200

  

Discount Received Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.15 Ramesh 300
May.30 Balance c/d 300
300 300

  

Kushal’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.18 Sales 10,000 May.22 Sales Return 1,200
May.24 Cash 6,000
May.30 Balance c/d 2,800
10,000 10,000

  

Trade Expenses Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.20 Cash 200
May.30 Balance c/d 200
200 200

  

Drawing’s Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.21 Cash
1,000 May.30 Balance c/d 1,000
1,000 1,000

  

Sales Return Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.22 Kushal 1,200
May.30 Balance c/d 1,200
1,200 1,200
Stationery Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.26 Cash 100
May.30 Balance c/d 100
100 100

  

Postages Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.27 Cash 60
May.30 Balance c/d 60
60 60
Salaries Account
Dr. Cr.
Date Particulars J.F. Amount₹ Date Particulars J.F. Amount ₹
2017 2017
May.28 Cash  2,500
May.30 Balance c/d 2,500
2,500 2,500

  

Sheetal Trader’s Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.29 Purchases 7,000
May.30 Balance c/d 7,000
7,000 7,000
Handa Trader’s Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.30 Purchases 5,000
May.30 Balance c/d 5,000
5,000 5,000

  

Purchases Return Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount₹
2017 2017
May.14 Ramesh 1,000
May.30 Balance c/d 1,000
1,000 1,000

  

Kirit’s Account
Dr Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount ₹
2017 2017
May.30 Sales 6,000
May.30 Balance c/d 6,000
6,000 6,000

Concepts covered in this chapter –

  • Cash Book
  • Single Column Cash Book
  • Posting of the Double Column Cash Book
  • Petty Cash Book
  • Posting from the Petty Cash Book
  • Conveyance Account
  • Balancing of Cash Book
  • Sales Account
  • Purchases Account

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