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L EARNING OBJECTIVES
After studying this chapter, you will be able to : • state the need for special purpose books; • record the transactions in cash book and post them in the ledger; • prepare the petty cash book; • record the transactions in the special purpose books; • post the entries in the special purpose book and to the ledger; • balance the ledger accounts.
n chapter 3, you learnt that all the business transactions are first recorded in the journal and then they are posted in the ledger accounts. A small business may be able to record all its transactions in one book only, i.e., the journal. But as the business expands and the number of transactions becomes large, it may become cumbersome to jour-nalise each transaction. For quick, efficient and accurate recording of business transactions, Journal is sub-divided into special journals. Many of the business transactions are repetitive in nature. They can be easily recorded in special journals, each meant for recording all the transactions of a similar nature. For example, all cash transactions may be recorded in one book, all credit sales transactions in another book and all credit purchases transactions in yet another book and so on. These special journals are also called daybooks or subsidiary books. Transactions that cannot be recorded in any special journal are recorded in journal called the Journal Proper. Special journals prove economical and make division of labour possible in accounting work. In this chapter we will discuss the following special purpose books: • Cash Book • Purchases Book • Purchases Return (Return Outwards) Book • Sales Book • Sales Return (Return Inwards) Book • Journal Proper
4.1 Cash Book Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. This is a very popular book and is maintained by all organisations, big or small, profit or not-forprofit. It serves the purpose of both journal as well as the ledger (cash) account. It is also called the book of original entry. When a cashbook is maintained, transactions of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger. 4.1.1 Single Column Cash Book
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Dr. Date Particulars L.F. Amount Rs. Date Particulars Fig. 4.1 : Format of single column cash book Date Details 2010 Nov. 01 Nov. 04 Nov. 08 Nov. 13 Nov. 16 Nov. 17 Nov. 20 Nov. 24 Cash in hand Cash received from Gurmeet Insurance paid (Annual Instalment) Purchased furniture Sold goods for cash Purchased goods from Mudit in cash Purchase stationery Cash paid to Rukmani in full settlement of account
The single column cash book records all cash transactions of the business in a chronological order, i.e., it is a complete record of cash receipts and cash payments. When all receipts and payments are made in cash by a business organisation only, the cash book contains only one amount column on each (debit and credit) side. The format of single column cash book is shown in figure 4.1.
Recording of entries in the single column cash book and its balancing is illustrated by an example. Consider the following transactions of M/s Roopa Traders observe how they are recorded in a single column cash book.
Amount Rs. 30,000 12,000 6,000 13,800 28,000 17,400 1,100 12,500
Recording of Transactions - II Nov. Nov. Nov. Nov. 27 30 30 30 Sold goods to Kamal for cash Paid monthly rent Paid salary Deposited in bank Roopa Traders Cash Book Dr. Date 2010 Nov. 01 Nov. 04 Nov. 16 Nov. 27 Particulars L.F. Amount Rs. 30,000 12,000 28,000 18,200 Date 2010 Nov. 08 Nov. 13 Nov. 17 Nov. 20 Nov. 24 Nov. 30 Nov. 30 Nov. 30 Nov. 30 Particulars L.F. 18,200 2,500 3,500 8,000
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88,200 23,400 Dec.01 Balance b/d
Posting of the Single Column Cash Book
As evident from figure 4.1, the left side of the cash book shows the receipts of the cash whereas the right side of the cash book shows all the payments made in cash. The accounts appearing on then debit side for the cash book are credited in the respective ledger accounts because cash has been received in respect of them. Thus, in our example, an entry ‘cash received from Gurmeet‘ appears on the debit side of the cash book conveys that the cash has been received from Gurmeet. Therefore, in the ledger, Gurmeet’s account will be credited by writing ‘Cash’ in the particulars column on the credit side. Similarly, all the account names appearing on the credit side of the cash book are debited as cash/cheque has been paid in respect of them. Now, notice, how the transactions in our example are posted to the related ledger accounts:
Balance b/d Gurmeet Sales Sales
Insurance Furniture Purchases Stationery Rukmani Rent Salary Bank Balance c/d
Amount Rs. 6,000 13,800 17,400 1,100 12,500 2,500 3,500 8,000 23,400
94 Books of Roopa Traders Gurmeet’s Account Dr. Date Particulars J.F. Amount Rs. Date 2010 Nov.04 Sales Account Dr. Date Particulars J.F. Amount Rs. Date 2010 Nov. 16 Nov. 27 Insurance Account Dr. Date Particulars J.F. Amount Rs. Date Particulars Particulars J.F.
Cr. Amount Rs. 12,000
Particulars J.F. Particulars J.F. Particulars J.F. Particulars J.F.
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2010 Nov. 08 Cash 6,000 Furniture Account Date Dr. Date Particulars J.F. Amount Rs. 13,800 2010 Nov. 13 Cash Dr. Date Purchases Account Amount Rs. 17,400 Date Particulars J.F. 2010 Nov. 17 Cash Stationery Account Amount Rs. Date Dr. Date Particulars J.F. 2010 Nov. 20 Cash 1,100
28,000 18,200 Cr. Amount Rs. Cr. Amount Rs. Cr. Amount Rs. Cr. Amount Rs.
Cr. J.F. Amount Rs.
Recording of Transactions - II Rukmani’s Account Dr. Date 2010 Nov.24 Dr. Date 2010 Nov.30 Particulars J.F. Amount Rs. 12,500 Rent Account Particulars J.F. Amount Rs. 2,500 Salary Account Dr. Date 2010 Nov. 30 Particulars J.F. Amount Rs. 3,500 Date Date Particulars J.F. Date Particulars J.F.
95 Cr. Amount Rs.
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Bank’s Account Date Dr. Date Particulars Cash J.F. Amount Rs. Particulars 2010 Nov.30 8,000
4.1.2 Double Column Cash Book
In this type of cash book, there are two columns of amount on each side of the cash book. In fact, now-a-days bank transactions are very large in number. In many organisations, as far as possible, all receipts and payments are affected through bank. A businessman generally opens a current account with a bank. Bank, do not allow any interest on the balance in current account but charge a small amount, called incidental charges, for the services rendered. For depositing cash/cheques in the bank account, a form has to be filled, which is called a pay-in-slip. (refer figure 4.2) It contains a counterfoil also which is returned to the customer (depositor) with the signature of the cashier, as receipt. The bank issues blank cheque forms, to the account holder for withdrawing money. (refer figure 4.3) The depositor writes the name of the party to whom payment is to be made after the words Pay printed on the cheque. Cheque
Cr. Amount Rs. Cr. Amount Rs.
Cr. Amount Rs.
When the world ‘bearer’ is struck off by drawing a line. which means payment is to be made to the person whose name has been written after the words “pay” or the bearer of the cheques. the cheque becomes an order cheque. Cheques are generally crossed in practice. bl is he d . 4. it is said to be crossed. It means payment is to be made to the person whose name is written on the cheque or to his order after proper identification.4. The payment of a crossed cheque cannot be made direct to the party on the counter.2 : A pay-in-slip © no N C tt E o R be T re pu Fig.96 Accountancy Fig. The various types of crossing providing different degrees of safety to the payment are shown in figure 4. When two parallel lines are drawn across the cheque. 4. It is to be paid only through a bank.3 : A cheque forms have the printed word bearer.
4 : Types of crossing When the number of bank transactions is large. the amount deposited is written on the left side in the bank column and at the same time the same amount is entered on the right side in the cash column. Ne ly w le . all payments into the bank are recorded on the left side and all withdrawals/payments through the bank are recorded on the right side. column indicating that these entries are not to be posted to the ledger account. a cheque can be transferred by the payee (the person in whose favour the cheque has been drawn) to another person.F. the amount of the cheque can be deposited only in the account of the person whose name appears on the cheque. The reverse entries are recorded when cash is withdrawn from the bank for use in the office. oti ab ee On is De lhi he In case of an A/c payee only crossing. Against such entries the word C. Just like cash transactions. it becomes a special crossing and the payment can be made only to the bank whose name has been written between the two lines. An order cheque can be transferred by endorsement and delivery. d . When cash is paid into the bank. Though this is rarely done.II 97 eg © no N C tt E o R be T re pu & tN cP No A/ ay Fig. A bearer cheque can be passed on by mere delivery. Sta te Ba nk of Ind Co bl ia. it is convenient to have a separate amount column for bank transactions in the cash book itself instead of recording them in the journal. which stands for contra is written in the L. both the entries are recorded in the cash book.Recording of Transactions . 4. This is so because both aspects of the transaction appear in the cash book itself. Endorsement means the writing of instructions to pay the cheque to a particular person and then singing it on the back of the cheque. When the name of the bank is written between two parallel lines. This helps in getting information about the position of the bank account from time to time. if it is not crossed A/c payee only. When cash is deposited in the bank or cash is withdrawn from the bank.
If the cheque is deposited on another day. on the date of receipt it is treated as cash received and hence recorded in the cash column on the receipts side. If a cheque received from a customer is dishonoured. it is deposited on the same day the amount is recorded in the bank column of the cash book on the receipts side. On the day of deposit to the bank. the entry will be made on the credit side in bank column. On receipt of such cheque or intimation from the bank. Entries in respect of cheques received should be made in the bank column of the cash book.) side.5 : Format of a double column cashbook The bank column is balanced in the same way as the cash column. the bank will return the dishonoured cheque and debit the firm’s account.F. Overdraft is a situation when cash withdrawn from the bank exceeds the amount of deposit. in the bank column. Cash Rs. there can be credit balance also because of overdraft taken from the bank. the entry will be made on the debit side of the cash book in the appropriate column.) side and in the Cash Column on the payment (Cr. This is a contra entry.F. the firm will make an entry on the credit side of the cash book by entering the amount of the dishonoured cheque in the bank column and the name of the customer in the particulars column. Bank Date Rs.5. he Payments d . When a cheque is received. generally due to insufficient funds in the customer’s account with the bank. is Bank Rs.98 Accountancy © no N C tt E o R be T re pu Cash Book Receipts Date Particulars L. This entry will restore the position prevailing before the receipt of the cheque form the customer and its deposit in the bank. Cash Rs. In case. If the bank credits the firm’s account. bl L. Particulars Fig. However. 4. Dishonour of a cheque means return of the cheque unpaid. commission or other charges for bank services. The format of double column cash book is shown in figure 4. in that case. it is shown in the Bank Column on receipt (Dr. it may be deposited into the bank on the same day or it may be deposited on another day. If the bank debits the firm on account of interest.
000 15.000 10.100 31. Consider the following example: The following transactions related to M/s Tools India : Date 2010 Sept. 01 Sept. Bank Date Rs.500 10. Cash Rs.500 10. 30 Bank balance Cash balance Purchased goods by cheque Sales of goods for cash Purchased machinery by cheque Sold goods and received cheque (deposited same day) Purchase goods from Mriaula in cash Purchase stationery by cheque Cheque given to Rohit Cash withdrawn from bank Rent paid by cheque Paid salary Details Amount Rs.000 2.Recording of Transactions .500 1.500 13.F.500 10. Cash Rs.100 1.F. 30 Sept. 01 Sept.000 04 13 4. 12.400 3.900 Purchases Machine Purchase Stationery Rohit Cash Rent Salary Balance c/d C 31.400 1.500 3.000 6.000 6. © no N C tt E o R be T re pu Cash Book Receipts Date Particulars L. 01 Balance b/d The double column cash book based upon above business transactions will prepared as follows : bl L.000 is Payments Bank Rs.000 5.500 he 42. 17.000 2010 Sept.500 17. 20 Sept. 17 Sept.100 1.000 12.900 46.II 99 We will now learn how the transactions are recorded in the double column cash book. 27 Sept. 08 Sept.100 Oct. Particulars 2010 Sept. 04 Sept.000 2. 01 08 16 27 Balance b/d Sales Sales Bank 15.000 5. 13 Sept.500 4. 24 Sept.500 d . 42. 16 Sept.500 17 20 24 27 30 30 30 46.000 C 10.500 13.
17 Particulars J. Bank Cash is he J.F.000 4. 16 Cash Bank Machinery Account Amount Rs. Payments J.400 Sales Account Date Date Particulars Payments Amount Rs. © no N C tt E o R be T re pu Receipts Date Particulars J. 08 Sept. We will now see how the transactions recorded in double column cash book are posted to the individual accounts.500 Stationery Account Amount Rs.F. Amount Rs. The bank column serves the purpose of the bank account. 13 Bank 5. Particulars 2010 Sept. Amount Rs. Amount Rs.04 Sept.000 17. 12.F.F.F.100 Accountancy Posting of the Double Column Cash Book When the bank column is maintained in the cash book. the bank account also is not opened in the ledger. Purchases Account Receipts Date 2010 Sept.F. Date Receipts Date Particulars J.20 Bank bl Payments J. Particulars 2010 Sept. Amount Rs. Particulars 2010 Sept.100 Date Receipts Date Particulars J. These entries represent debit or credit of cash account against the bank account or vice-versa. 6. Amount Rs. 1.F. d .F.500 Payments J. Entries marked C (being contra entries as explained earlier) are ignored while posting from the cash book to the ledger.
telegrams and other expenses (collectively recorded under miscellaneous expenses) are made.500 Date Date Particulars Date Particulars J. Amount Rs. depending on the frequency of small payments. say Rs. 3. Payments d Bank . © no N C tt E o R be T re pu Cash 4. cartage.II Rohit’s Account Receipts Date 2010 Sept. The reimbursement may be made on a weekly.500 Rent Account Receipts Date 2010 Sept.30 Particulars J.1. J.F. a definite sum. These are generally repetitive in nature. (In certain cases. Bank he Payments Amount Rs. large organisations normally appoint one more cashier (petty cashier) and maintain a separate cash book to record these transactions.Recording of Transactions .F.30 Particulars J. Thus. postage. the petty cash system is operated through the bl Particulars J. 101 Payments Amount Rs. he again has the full imprest amount in the beginning of the next period. The petty cashier goes on making all small payments out of this imprest amount and when he has spent the substantial portion of the imprest amount say Rs. The petty cashier works on the Imprest system.F. he gets reimbursement of the amount spent from the head cashier. the procedure is found to be very cumbersome. 2.F.500 Salary Account Receipts Date 2010 Sept.000 is given to the petty cashier at the beginning of a certain period. is Amount Rs. Such a cash book maintained by petty cashier is called petty cash book. To avoid this. Amount Rs. If all these payments are handled by the cashier and are recorded in the main cash book. Amount Rs.F. Under this system. This amount is called imprest amount. 2. fortnightly or monthly basis.F.1. The cashier may be overburdened and the cash book may become very bulky.780. 1.24 Particulars J.3 Petty Cash Book In every organisation. a large number of small payments such as conveyance.
2010 from the Head Cashier. At the end of the period. The head cashier can control big payments directly and petty payments by keeping a proper check on the petty cashier. In the ‘Remarks’ the nature of payment is recorded. Convenient recording: Recording of petty disbursements in the main cash book makes it bulky and unmanageable. Recording of such small payments becomes easy as the totals of different types of expenses are posted to ledger. all amount columns are totaled. there is only one amount column. This way the chances of making frauds and embezzlements become very difficult. He can concentrate on cash transactions involving large amount of cash. For the month. 3.000 on May 01. Mr. In such instances.102 Accountancy Advantages of Maintaining Petty Cash Book 1. voucher number and particulars are common for both receipts and payments. In nutshell it can be stated that preparation of petty cash book is a cost reduction control measure. which are most common. This way the cash book reveals only material and useful information. details of petty expenses are listed here under: bl Box 1 is main cash book itself. Mohit. It also saves time and effort of posting individual items in the ledger. the materiality principle requires that insignificant details need not be given in the main cashbook. the petty cahier of M/s Samaira Traders received Rupees 2. the petty cash book is not maintained independently. On the receipt (debit) side. he d . For example. Effective control over cash disbursements: Cash control becomes easy because of division of work. The total amount column l shows the total amount spent and to be reimbursed.) The petty cash book generally has a number of columns for the amount on the payment side (credit) besides the first other amount column. The last amount column is designated as ‘Miscellaneous’ followed by a ‘Remarks’ column. Columns for the date. Each of the amount columns is allotted for items of specific payments. © no N C tt E o R be T re pu Saving of Time and efforts of chief cashier: The chief cashier is not required to deal with petty disbursements. Further. In the miscellaneous column those payments are recorded for which a separate column does not exist. It saves time and labour and helps chief cashier to discharge his duties more effectively 2.
103 © no N C tt E o R be T re pu Posting from the Petty Cash Book The petty cash book is balanced periodically. A petty cash account is opened in the ledger. Each expense account is individually debited with the periodic total as per the respective column by writing “petty cash account” and the petty cash account is credited with the total expenditure incurred during the period by writing sundries as per petty cash book. It reflect the actual cash with the petty cashier. It is debited with the amount given to petty cashier. 36 + Rs.105 + Rs. The difference between the total receipts and total payments is the balance with the petty cashier.90) Refreshments Auto fare Registered postal charges Telegram Cartage Computer stationery Bus fare STD call charges Office sanitation including disinfectant (Rs. The petty cash account is balanced.II Date 2010 May 02 03 04 05 06 08 08 10 12 13 14 16 19 19 20 22 23 28 29 30 Auto fare Courier services Postal stamps Erasers/Sharpeners/Pencils/Pads Speed post charges Taxi fare (Rs. bl is he d .Recording of Transactions . The balance is carried to the next period and the petty cashier is paid the amount actually spent. 24) Refreshment Photo stating charges Courier services Unloading charges Bus fare 55 40 105 225 98 195 85 60 42 34 25 165 24 87 60 45 47 40 40 15 Details Amount Rs.
The petty cash book for the month will be prepared as follows : 104 Book of Samaira Traders Petty Cash Book Analysis of Payments Telephone & Telegram 55 Conveyance Stationery Misc.487 01 Cash received 513 2. Amount Date Particulars Received Voucher No. 513 01 Balance b/d 1. Postage 2010 May 2. Rs.000 01 02 03 04 05 225 195 85 60 55 40 105 225 40 105 06 08 08 10 12 34 98 195 85 60 42 98 42 25 165 24 87 60 45 47 13 14 16 19 19 20 34 25 165 24 87 60 © no N C tt E o R be T re pu 40 45 47 40 40 15 1.000 Jun. Amount paid Rs.000 bl is he d .487 325 40 121 15 349 390 302 22 23 28 29 30 Cash received Auto fare Courier services Postal stamps Erasers/Sharpeners /Pencils Speed post charges Taxi fare (105 + 90) Refreshments Auto fare Registered postal charges Telegram Cartage Computer stationery Bus fare STD call charges Office sanitation including disinfectant (36+24) Refreshment Photo stating charges Courier services Unloading charges Bus fare 31 Balance c/d Accountancy 2.
2. Dr. Dr. 325 Date Date Particulars J. he d 2010 May 01 .F.000 325 121 349 390 302 105 Credit Amount Rs. Date Dr. Amount Rs. Dr.487 May 31 Dr. Dr. Amount Rs.II Books of Samaira Traders Journal Date Particulars L.487 Cr. 01 Balance b/d Cash 2.F.000 Cr. Date Dr.000 is 1.487 1. 2.000 513 1. Sundries as per petty cash book Balance c/d J.F.F.000 2010 May 31 Jun. 01 Jun. Dr. Particulars 2010 May 31 Petty cash Telephone and Telegram Account Amount Rs. Debit Amount Rs. Date Particulars J. Books of Samaria Traders Postage Account Amount Rs. Cr. © no N C tt E o R be T re pu Petty Cash Account Amount Rs.F. Amount Rs.487 513 2. Petty cash A/c To Cash A/c (Cash paid to petty cashier) Postage A/c Telephone & Telegram A/c Conveyance A/c Stationary A/c Miscellaneous expenses A/c To Petty cash A/c (Petty expenses posted to petty cash account) Petty cash A/c To Cash A/c (Cash paid to petty cashier) Dr. J. 1.487 J.F. May 31 Dr.F.Recording of Transactions . Date Particulars J. Particulars 2010 May 31 Petty cash 121 bl 1. Particulars 2010 May 01 Cash 2.
© no N C tt E o R be T re pu Petty cash 302 4. a separate cash book in the ledger is not opened. Accountancy Cr.1. all these documents. Petty cash bl Particulars J. popularly known as vouchers.F. For payment. is Cr. on the basis of which payment has been made. bill. Date 2010 May 31 Particulars J. will serve as a source document for recording transactions in the cash book.4 Balancing of Cash Book On the left side.F. Amount Rs. Date 2010 May 31 Particulars J. there will always be debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period. all cash transactions relating to cash receipts (debits) and on the right side all transactions relating to cash payments (credits) are entered date-wise.F. prepare the single column cashbook. Amount Rs. When payment has been made. Amount Rs. Date Date Particulars Date Particulars J. Date 2010 May 31 Particulars J. are given a serial number and filed in a separate file for future reference and verification.106 Conveyance Account Dr. d Petty cash . 390 Miscellaneous Expenses Account Dr.F. When a cash book is maintained. 349 Stationery Account Dr. Amount Rs. The source document for cash receipts is generally the duplicate copy of the receipt issued by the cashier. etc. receipt. Amount Rs. invoice. J. Amount Rs.F. he Cr. But it may be noted that in the case of the cash book.F. The cash book is balanced in the same way as an account in the ledger. Illustration 1 From the following transactions made by M/s Kuntia Traders. any document.
02 05 06 07 07 07 10 12 14 21 bl L.800 5000 1. 14 Sept. Sept. 07 Sept.850 d . 04 Sept.740 8.000 16. 11 Sept. discount allowed to him Rs.000 6.Recording of Transactions . 01 Balance b/d 04 Puneet 06 Sales 11 Gurmeet 17 Sales 30 Sales 40.000 he 14. Date Dr.160 23.000 11. Sept. 29 Sept. 200 Received from Gurmeet. Sept. 28 Sept. 06 Sept. Sept. Sept.800 14. Sept. Date Particulars L. 06 Sept.740 8. Amount Rs. Bank Rukmani Drawings Office furniture Stationery Cartage Kamal Drawings Electric charges Purchases is Cr.000 1. 07 Sept.200 8.II Date 2010 Sept.700 120 6. Cash paid to Rukmani in full settlement of claim of Rs.000 15. discount allowed by him Rs. 12.000 11. 16.600 6.F. 10 Sept. Sept.850 2. 29 Sept. 12 Sept.000 Sold goods to Sudhir for cash Paid quarterly insurance premium on policy for proprietor’s wife Purchased office furniture Purchased stationery Paid cartage Paid Kamal. Sept.800 14. 05 Sept. 02 Sept. 07 Sept. 01 Sept.800 2.500 5. 40. Sept.700 120 6.7. Sept. 26 Sept.160 17.000.000 17. Particulars 2010 Sept.000 1. Sept.F. 24 Sept.700 © no N C tt E o R be T re pu Solution Books of Kuntia Traders Cash Book Amount Rs.000 2.000 15.600 2010 Sept. 17 Sept. Sept.250 11. Sept.500 23. 21 Sept.500 Amount withdrawn for house hold use Electricity bill paid Goods sold for cash Bought goods from Kamal on cash basis Paid telephone charges Paid postal charges Paid monthly rent Paid monthly wages and salary Bought goods for cash Sold goods for cash Details 107 Amount Rs.000 1. 30 Cash in hand Deposited in bank Received from Puneet in full settlement of claim of Rs. Sept.300 520 4.700 14.
000 14.000 2.000 220 Record the following transactions in double column cash book and balance it. 14 Aug.600 Illustration 2 Date 2010 Aug. 01 Aug.19. 31 Aug. 28 Aug.500 10.500 4.700 6.000 750 21. 09 Aug.850 150 1. 31 Cash balance Bank balance Paid insurance premium by cheque Cash sales Cash discount Payment for cash purchases Cash discount Cash deposited in bank Telephone bill paid by cheque Withdrawn from bank for personal use Withdrawn from bank office use Received cheque from John in full and final settlement and deposited the same in the bank Received cash from Michael Discount allowed Stationery purchased for cash Cartage paid in cash Cheque received from Kumar Cheque received from Kumar deposited in Bank Cheque deposited on Aug. Sept.000 4.300 520 4. 25 Aug. 23 Aug. 16 Aug. 20 Aug. 08 Details © no N C tt E o R be T re pu Aug.000 10. 31 Aug. 24 Aug.250 11.200 22. 24 Sept. 25 Aug.19. Sept.800 350 4.600 Oct.000 700 15.200 8. Sept.108 Sept. 31 Aug. 01 Balance b/d 27. 09 Aug.300 6.960 1.960 28 29 29 30 30 Telephone charges Postal charges Rent Wages & Salary Purchases Balance c/d Accountancy 2.500 4. 1. 15.000 3. 28 dishonoured and returned by the bank Rent paid by cheque Paid wages to the watchman in cash Paid cash for postage bl is Amount Rs. he d . 10 Aug. Sept.000 27. 03 Aug.
Cash Rs. Bank Rs.000 220 16. Jan.000 2. Jan.700 62.000 15.500 1.000 C C 14.000 14.000 © no N C tt E o R be T re pu 62. 04 05 07 09 11 13 14 16 Cash in hand Bank overdraft Wage paid Cash sales Purchased goods by cheque Purchased furniture for cash Cash paid to Rohit Cash sales Deposited into bank Bank charged interest on overdraft Insurance Purchases Bank Telephone expenses Drawings Cash Printing and stationery Cartage Bank Kumar Rent Wages Postage Balance c/d C Prepare bank column cash book from the following tansactions of M/s Laser Zone for the month of January 2010 and post them to the related ledger accounts : Amount Rs.980 40.000 03 09 15.200 2.500 C 20 23 25 28 31 John Michael Kumar Cash Balance c/d 4.500 6. 01 Jan.000 2.000 4.200 4.700 Sept.800 4.Recording of Transactions .200 400 7.500 3.000 200 bl C 350 4. Jan. 01 Balance b/d 08 Sales 09 Cash 16 Bank d . 01 Balance b/d Illustration 3 Date Details Jan.700 14 16 24 25 28 31 31 31 31 31 Particulars L.F. Jan.500 6. Jan.000 3. 4.000 22.300 2010 Aug.200 2. Bank Date Rs.F. 109 Payments Cash Rs.850 40. Jan. 10.980 is C 6.II Solution Cash Book Receipts Date Particulars L.850 4.500 4.000 4.000 4.500 7. Jan.200 he 21. 15. 2010 Aug.850 16.000 09 10 10.
20 Jan.000 800 500 1.200 2. Jan.000 1. Date 2010 Jan.000 7. Cash Rs.F.000 J.200 2. Solution Books of Laser Zone Cash Book Receipts Date 2010 Jan.700 Payments Amount Rs. Jan. Amount Rs.04 Cash Balance b/d Sales Sales Cash Sales Interest 4.110 Jan.000 4.000 1.F. 400 Particulars 2010 Jan.700 Balance b/d Wages Purchase Furniture Rohit Bank Overdraft interest Telephone Rent Drawings Salary Balance c/d bl 400 2.700 15.600 5. 25 Jan. 27 29 30 31 Paid telephone bill by cheque Sale of goods and received cheque (deposited same day) Paid rent Drew cash for personal use Paid salary Interest collected by bank Accountancy 600 3. Cash Rs.500 1. Bank Rs.600 11. 01 04 07 09 11 14 16 20 27 29 30 01 Particulars L.000 3.500 11.700 Oct.F. 01 05 13 14 25 31 Particulars L. is 3.500 C 7.000 7.700 © no N C tt E o R be T re pu C 15.700 5. Jan. d . 01 Balance b/d Wages Account Date Receipts Date Particulars J.000 200 600 800 500 1.000 1. he Payments Bank Rs.F.
25 Purchases Receipts Date 2010 Jan.000 Bank © no N C tt E o R be T re pu Particulars 2010 Jan. Date Date Particulars Account Particulars J.500 3.000 Ovedraft Interest (Paid) Account Amount Rs. he Payments Amount Rs.F. Payments Amount Rs.20 Bank 600 bl J. Payments Amount Rs.F.Recording of Transactions . J. is Payments Amount Rs. Payments Amount Rs. Date Receipts Date Particulars J. Amount Rs. Particulars 2010 Jan. J. Amount Rs. Date Receipts Date Particulars J.000 4.16 Bank 200 Telephone Expenses Account Amount Rs. Amount Rs.F.200 Rohit Account Date Receipts Date Particulars J. Particulars 2010 Jan. Amount Rs.F.F. 11 Cash 2. 05 Jan. J. Cash Cash Bank d .F.F.F.000 Furniture Account Receipts Date Particulars J. J. 09 Cash 2. 7. Particulars 2010 Jan. 111 Payments Amount Rs.F.13 Jan.07 Particulars J. Date 2010 Jan.II Sales Account Receipts Date Particulars J.F.F. 2.F.
800 Drawings Account Dr. Date Particulars J. Date 2010 Jan.F. Dec. 500 Salary Account Dr.30 Particulars J. © no N C tt E o R be T re pu Interest (Received) Account Amount Rs. 01 Dec. Cr. is 1.29 Particulars J. Amount Rs. 02 03 04 05 06 08 10 12 Cash in hand Cash at bank Cash paid to petty cashier Received cheque from Priya Cash sales Deposited into bank Priya’s cheque deposited into bank Purchased furniture by cheque Paid trade expenses Cash sales Cash Prepare double column cash book of M/s Advance Technology Pvt. Dec.F.31 Bank Illustration 4 Date Details 2010 Dec. 3. Dec. Ltd for the month of December 2010 from the following transactions : Amount Rs.F. J.000 bl Particulars J. Accountancy Cr.F. Dec. Amount Rs.112 Rent Account Dr.700 Cash he Cr. Date 2010 Jan.500 400 9. Dec.F.000 1.200 3. Particulars 2010 Jan. Amount Rs. Amount Rs.F. d Cash .F.000 2.27 Particulars J.000 6. Dec. Date Particulars J. Date Dr. Dec.065 6. 1. Amount Rs. Cr. Amount Rs.F.780 1. Amount Rs.000 3.000 Date Date Particulars J. Date 2010 Jan.
Recording of Transactions . Dec.F.000 400 2. 31 is Payments Bank Rs. 15 Dec. Dec.000 1. Dec. Dec.780 C C 1. 01 Balance b/d 03 Priya 04 Sales 05 Cash 06 Cash 12 Sales 15 Dividend 21 Sales 27 Sales 30 Commission 3.200 3. 13 Dec.150 4. Cash Rs.500 300 600 2.000 2.000 he d .000 1.000 500 340 850 3. 17 Dec. Cash Rs.000 2. 22 23 24 25 26 27 28 29 30 Bank charges Dividend collected by bank Paid electric bill by cheque Cash purchases Paid for advertising Goods sold and received a cheque (deposited same day) Paid legal charges Drew from bank for personal use Paid establishment expenses Paid for printing of bill book Paid insurance premium by cheque Cash sales Paid salary by cheque Rent paid Commission received by cheque (deposited same day) Paid for charity by cheque 300 1. Dec.200 6. Dec.000 9.000 6.200 3. 6. 1.065 3.000 2.000 3.000 Dec. 16 Dec.200 600 2.200 2.F. Dec. Bank Date Rs.200 4.000 500 2.000 1.II Dec.000 340 850 2. Particulars 2010 Dec. 21 Dec.150 7.000 6. Dec. 02 05 06 08 10 13 16 17 19 22 23 24 25 26 28 29 Petty Cashier Bank C Bank C Furniture Trade expenses Bank charges Electric charges Purchases Advertisement Legal charges Drawings Establishment expenses Printing Insurance premium Salary Rent Books of Advance Technology Cash Book bl L.000 7.500 800 113 Solution © no N C tt E o R be T re pu Receipts Date Particulars L. 19 Dec.000 1.500 2010 Dec.
114 31 31 24. Amount Rs. Date Particulars J.680 Charity Balance c/d Accountancy 800 4. Cr. Date 2010 Dec. Date Particulars J.04 Dec. 1. Cr.975 24. Date Particulars J. Cr. Date 2010 Dec.265 2010 Jan.330 20.F. d . Date Date Particulars Dr. 03 Sales Account Dr. Date 2010 Dec. Amount Rs. Amount Rs. Amount Rs.000 7.000 Amount Rs.27 Furniture Account Dr. Cash Cash Bank Cash Particulars J. 3.000 9.F.500 is Amount Rs. Cr.08 Bank 6. Cash © no N C tt E o R be T re pu 2010 Dec.F.12 Dec.975 4.F. he J.02 bl Particulars J. 2.F.000 6.265 Balance b/d 10.330 (ii) Ledger Posting Petty Cashier’s Account Particulars J.21 Dec. Cash Particulars J. 01 20. Amount Rs.000 Priya’s Account Dr.F.F.F.200 Amount Rs.680 10.
II Trade Expenses Account Dr.13 Particulars J.F. Amount Rs.F. Amount Rs. 115 Cr. 2010 Dec.F. J. Amount Rs. Date Dr. © no N C tt E o R be T re pu Electric Charges Account Amount Rs. Date Particulars J. 17 Cash 2.Recording of Transactions . d . Amount Rs. Bank Particulars J. Amount Rs. Cash Bank bl Particulars J. Cr. Date 2010 Dec. Date Particulars J. 300 Dividend Account Dr.F. 2010 Dec. he Cr.F.10 Particulars J. Amount Rs.F.16 Bank 600 Purchases Account Amount Rs. Amount Rs.F. Cr.000 Advertisement Account Amount Rs. 19 Cash 1. Date Particulars J.F.F. Date Dr. Amount Rs. 1.F.200 Cr. Particulars J.15 Date Particulars Date Particulars J. Amount Rs.F. 400 Bank Charges Account Dr. Date 2010 Dec. Particulars J. Date Dr.F. Date Particulars J.000 is Cr. Date 2010 Dec. 2010 Dec.
Particulars 2010 Dec. 23 Particulars J. Date Particulars J.F. Bank he Amount Rs. J. d Cr.F. Amount Rs. Cr. Amount Rs. Cash . Date Particulars J. is Amount Rs. 500 Drawings Account Dr.F. 340 Date Date Particulars J. Date 2010 Dec. 24 Particulars J. Amount Rs.116 Legal Charges Account Dr. Amount Rs.F. Amount Rs. 28 Bank 4. 26 2.F. Cr. Particulars 2010 Dec. Cr. 850 Particulars 2010 Dec. Date Dr.F. 22 Particulars J. Amount Rs.F.F. Date Particulars Bank J.F. Accountancy Cr. Amount Rs. 25 Cash Insurance Premium Account Amount Rs.F. Date 2010 Dec.000 Cash bl Particulars J. Amount Rs.F. Date Particulars J. J. Date 2010 Dec. Amount Rs.150 Salary Account Date Dr. © no N C tt E o R be T re pu Printing Account Date Dr. 2. J. Cr.F.000 Establishment Expenses Account Dr.
3. L. Consider the following details obtained from M/s Kanika Traders and observe how the entries are recorded in the purchase journal. Date 2010 Dec. 4.F.F.6.2 Purchases (Journal) Book Purchases (Journal) Book Date Invoice No. © no N C tt E o R be T re pu 4. Cash . Bank he Amount Rs. Trade discount and other details of the invoice need not be recorded in this book. 117 Cr. Other purchases such as purchases of office equipment.F. 29 Particulars J. Date Particulars J. Date 2010 Dec.F. Individual suppliers accounts may be posted daily. Amount Rs.II Rent Account Dr. Date 2010 Dec. The source documents for recording entries in the book are invoices or bills received by the firm from the supplies of the goods. Amount Rs.F. 30 Charity Dr. Amount Rs. furniture.6 : Format of purchases (journal) book Bank All credit purchases of goods are recorded in the purchases journal whereas cash purchases are recorded in the cash book.500 Cr. 2. The format of the purchases journal is shown in figure 4.000 Commission Received Account Dr. are recoded in the journal proper if purchased on credit or in the cash book if purchased for cash. Name of Supplier (Account to be credited) Fig. building. Amount Rs. d Cr.Recording of Transactions . bl Particulars J. Entries are made with the net amount of the invoice.F.F. The monthly total of the purchases book is posted to the debit of purchases account in the ledger. Date Particulars J. 800 Date Account Particulars J. Amount Rs. is Amount Rs. 31 Particulars J.
15 Tape recorders @ Rs.V.18 Aug.12.000 38.04 Aug. Trade discount @ 12.000 Cr.F.31 Neema Electronics Pawan Electronics Northern Electronics Neema Electronics Pawan Electronics Books of Kanika Electronics Neema Electronics Amount Rs. if the number of transactions is very large. @ Rs.650 per piece. 3250): 20 Mini-size T.500 per piece. 26 Purchases Purchases Posting from the purchases journal is done daily to their respective accounts with the relevant amounts on the credit side.500 per piece. 4256): 15 Northern stereos @ Rs. Trade discount @ 20%.000 per piece. Date Details 2010 Aug.700 6.000 54.F. Northern Electronics (invoice no.V. @ Rs.600 per piece. Date Dr.250 54. Aug. 18 Purchased from M/s. @ Rs. 8281) 20 Video cassettes @ 150 per piece 25 Tape recorders @ Rs. weekly or fortnightly. is Amount Rs. Particulars 2010 Aug. Date Particulars J. 04 Purchased from M/s Neema Electronics (invoice no.0 00 per piece. Trade discount @ 10% on purchases. J. 1. 5 Colour T.82. this total may be done and posted at some other convenient time interval such as daily.F. @ Rs. 1.29 Aug.10 Aug.2.050 3. Aug. 10 Bought from M/s Pawan Electronics (invoice no. 12.500 per piece.000 31. 150 per piece.06. The posting from the purchases journal to the ledger from is illustrated as follows: bl L. 20 Tape recorders @ Rs.V. Amount Rs. 4.000 per piece. 14. 1. 8260): 10 Video cassettes @ Rs. Aug. 1.5%. 3294): 10 Mini-size T. Trade discount on all items @ 20%. 20 Northern colour T. 1.04 Aug. Trade discout @ 10% on purchases.26 Aug.000 he d . 12.82. 26 Purchased from M/s Neema Electronics (Invoice No. Aug. The total of the purchases journal is periodically posted to the debit of the purchases account normally on the monthly basis. However. 29 Bought from M/s Pawan Electronics: (Invoice No.118 Accountancy Books of Kanika Traders Purchases (Journal) Book Date Invoice No. 3250 8260 4256 3294 8281 Name of Supplier (Account to be credited) © no N C tt E o R be T re pu 2010 Aug.V.
Purchases bl Particulars J. Date 2010 Aug. Sometimes goods purchased are returned to the supplier for various reasons such as the goods are not of the required quality. Amount Rs. Date Particulars J.7(a) : Format of Purchases return (journal)book is 3.000 4. 119 Cr. he Cr.F. The supplier may also prepare a note. Amount Rs.050 38. Fig 4. purchases return of goods are recorded. A debit note will contain the name of the party (to whom the goods have been returned) details of the goods returned and the reason for returning the goods. Date Particulars Particulars J. L.7(a).F. etc.700 . Date 2010 Aug.F.II Pawan Electronics Dr. The source document for recording entries in the purchases return journal is generally a debit note. which is called the credit note. © no N C tt E o R be T re pu Sundries as per Purchases Journal 6. The format of the purchases return journal is shown in figure 4. For every return. Amount Rs.250 Cr.18 Purchases Account Dr. Purchases Return (Journal) Book Name of the Supplier (Account to be debited) Date Debit Note No.06.Recording of Transactions . a debit note (in duplicate) is prepared and the original one is sent to the supplier for making necessary entries in his book. or are defective. Amount Rs. Amount Rs. 31 Particulars J. 29 Northern Electronics Dr.12. Amount Rs. Date Particulars J. 10 Aug.F. Date 2010 Aug.3 Purchases Return (Journal) Book In this book. Amount Rs. d Purchases Purchases 31.F. J.F. Each debit note is serially numbered and dated.F.
he d .... is A Debit note is a document evidencing a debit to be raised against a party for reasons other than sale on credit. A Credit note is prepared..7(c). a credit note should be sent to him.only) Signature of the Manager with date CREDIT NOTE Against : Customer’s Name Goods returned by the customer Amount (Rs) Challan No.. when a party is to be given a credit for reasons other than credit purchase.. or when an additional sum is recoverable from a customer such a note is prepared to debit the customer with the additional dues.120 Box 2 Debit and Credit Notes Accountancy Name of the Firm Issuing the Note © no N C tt E o R be T re pu No....... (Details of goods returned) (Rupees ..........7(b) : Showing a specimen of debit note Name of the Firm Issuing the Note No. Address of the Firm Date of Issue . Fig.only) Signature of the Manager with date bl Address of the Firm Date of Issue ..7(c) : Showing a specimen credit note DEBIT NOTE Against : Supplier’s Name Goods returned as per delivery Amount (Rs) Challan No. the defective goods are returned to the supplier of the goods and a note is prepared to debit the supplier... 4. In these two situations the note is called a debit note (refer figure 4. 4. It is a common practice to make it in red ink... (Details of goods returned) (Rupees .7(b)). The suggested proforma of credit note is shown in figure 4........... When goods are received back from a customer. On finding that goods supplied are not as per the terms of the order placed. Fig.
on delivery 2 mini T.200 13.’s and tape recorders were found defective and were returned back vide debit note no.F. Date Particulars J. Date Dr. In this case. the purchases return books will be prepared as follows : Purchases Return (Journal) Book Date Debit Note No. Amount Rs. 03/2010 Name of the Supplier (Account to be debited) Neema Electronics L. two or more than two copies of a sales invoice are prepared for is Amount Rs.200 he 13. Neema Electronics Account Dr. 13.II 121 Refer to the purchases (journal) book of Kanika Traders you will notice that 20 mini size T. Cr.V.F.F. J.000 However.recorders were bought from Neema Electronics for Rs. Particulars Sundries as per purchase returns book bl J. Other details about the sales transaction including terms of payment are available in the invoice. 13.Recording of Transactions .200 Date © no N C tt E o R be T re pu Particulars Purchases Return Account Amount Rs. Date Particulars Purchases Return J. Amount Rs.4 Sales (Journal) Book All credit sales of merchandise are recorded in the sales journal. 1.’s and 15 tape. 03/2010.V. In fact. Posting from the purchases returns journal requires that the supplier’s individual accounts are debited with the amount of returns and the purchases returns account is credited with the periodical total.F. Amount Rs.F. name of the customer and amount of the invoice are recorded in the sales journal.82. d . Cash sales are recorded in the cash book.200 Cr. 4. The source document for recording entries in the sales journal are sales invoice or bill issued by the firm to the customers. The format of the sales journal is similar to that of the purchases journal explained earlier. The date of sale. invoice number.
Name of the Customer (Account to be debited) © no N C tt E o R be T re pu Books of Koina Suppliers Sales (Journal) Book Date Invoice No. Fig. 4. The book keeper makes entries in the sales journal from one copy of the sales invoice. 4. 2010). d each sale. 2010) . 178 dated April 06. and this total is credited to sales account in the ledger. The above stated transactions will be entered in a sales journal as follows: Posting from the sales journal are done to the debit of customer’s accounts kept in the ledger.100 each and five buckets @ Rs 130 each to M/s Raman Traders (Invoice no. 209. The sales (journal) book illustrated above will be posted in the related ledger account in the following manner: bl L. one additional column may be added to record sales tax recovered from the customer and to be paid to the government within the stipulated time.8 : Format of sales (journal) cash book is Amount Rs. (ii) Five road side containers @ Rs 4.F. Amount Rs. dated April 28.850 21. .F. (iii) 100 big buckets @ Rs 850 each to M/s Raman traders (Invoice no.8.200 each to M/s Nutan enterprises (Invoice no 180 dated April 09.850 he L. with the amount involved. Like the purchases journal. at the end of each month the amount column is total led and posted to the credit of sales account in the ledger. The sales journal is also totaled periodically (generally monthly). individual customer’s accounts are generally posted daily.000 1. Posting to the debit side of individual customer’s accounts may be made daily.122 Accountancy Sales (Journal) Book Date Invoice No. The format of the sales joournal is shown in figure 4. Periodically.000 85. 2. Name of the customer (Account to be debited) 2010 April 06 April 09 April 28 April 30 178 Raman Traders 180 Nutan Enterprises 209 Raman Traders For example M/s Koina Supplies sold on credit: (i) Two water purifiers @ Rs.10. In the sales journal. 2010).
Amount Rs. 30 Date Particulars Date Particulars J. Name of the customer (Account to be credited) Fig.F. 21. Date 2010 Apr. On receipt of goods from the customer.Recording of Transactions . Amount Rs.850 85. a credit note is prepared.10. Date 2010 Apr. Amount Rs. Date Particulars J.II Raman Traders Account Dr. Amount Rs. 06 Apr.F.000 Sales Account Dr. The difference between the credit not and the debit note is that the former is prepared by the seller and the latter is prepared by the buyer.F. details of the merchandise received back and the amount. The format of the sales return book is shown in figure 4. the credit note is also prepared in duplicate and contains detail relating to the name of the customer. 4.9 is Cr.01 Particulars J. d Sales Sales . 1.F. Sundries as per sales book L. J.F. Amount Rs. 4. Like the debit note.9 : Format of sales return (journal) book This journal is used to record return of goods by customers to them on credit.F. The source document for recording entries in the sales return book is generally the credit note. 28 Particulars J. 123 Cr. Each credit note is serially numbered and dated. like the debit note referred to earlier.F. Amount Rs.5 Sales Return (Journal) Book Sales Return (Journal) Book Date Credit No. he Cr.000 Nutan Enterprises Account Dr. Sales bl Particulars J. Date 2010 Apr. © no N C tt E o R be T re pu 4.850 Amount Rs.
10/2010). out of which one purifier was returned back due to the manufacturing defect (credit note no. Date Particulars J.100 each.100 Illustration 5 Enter the following transactions of M/s Hi-Life Fashions in purchases and purchases return book and post them to the ledger accounts for the month of September 2010: Purchase of following goods on credit from M/s Ratna Traders. J. Date Particulars J.327 .300 per shirt 20 Pants @ Rs. Amount Rs.100 2. Date © no N C tt E o R be T re pu Particulars Sales Return Sales Return Account Amount Rs. 01 Sept. is Amount Rs.F. he Cr. Cr.100 Date Details Sept. Raman Traders Account Dr.100 d . 2. In this case. as per Invoice No.F. Particulars Sundries as per sales return book 2. Amount Rs.F. 2.F.700 per pant Less 10% trade discount Purchase of following goods on credit from M/s Bombay Fashion House. as per Invoice No. the sales return (Journal) book will be prepared as follows : Sales Return (Journal) Book Date Credit Name of the customer No. Amount Rs. Posting to the sales return journal requires that the customer’s account be credited with the amount of returns and the sales return account be debited with the periodical total in the same way as is done in case of posting from the purchases journal. Date Dr. 08 bl J.124 Accountancy Refer to the sales (journal) book of Koina Supplier of you will find that two water purifiers were sold to Raman Traders for Rs 2.F. (Account to be credited) 10/2010 Raman Traders L.714: 25 Shirts @ Rs.
Sept. as per Invoice No.II 125 Sept.as per debit note No.102 : 3 shirts @ Rs.103 : 2 Fancy Trousers @ Rs.F.000 per lengha Less 5% trade discount.900 4.20 Sept. Sept.08 Sept.6781 : 10 Jackets @ Rs.2. 20 Sept. is Amount Rs.15 Sept.1000 per jacket 5 Plain shirts Rs.30 Ratana Traders Bombay Fashion House Zolta Fashions Bride Palace Purchases Return (Journal) Book Name of the Supplier (Account to be debited) Date Invoice No. 102 103 106 2010 Sept. 24 Sept.100 per hat Less 5% trade discount.650 9. Sept. 100 per hat Less 5% trade discount Goods returned to M/s Ratana Traders.500 per trouser 20 Fancy Hat @ Rs.000 per lengha Less 5% trade discount.330 1.1076 : 10 Fancy Lengha @ Rs.350 6.670 he d .000 54. Goods returned to M/s Bombay Fashion House as per debit note No. as per Invoice No.2.01 Sept. Purchase of following goods on credit from M/s Bride Palace. bl L.350 19.200 per shirts Less 15% trade discount. 28 © no N C tt E o R be T re pu Solution Books of Hi-life Fashions Purchases (Journal) Book Date Invoice No.440 1.500 per trouser 4 Fancy Hat @ Rs.350 Amount Rs.F. 714 327 6781 1076 Name of the Supplier (Account to be credited) 2010 Sept. 10 Sept.300 per shirt 1 Pant @ Rs. 10 24 28 30 Ratana Traders Bombay Fashion House Bride Palace 10 Fancy Trousers @ Rs. 1.700 per pant Less 10% trade discount Purchase of following goods on credit from M/s Zolta Fashions. L. 15 Sept.105 : 1 Fancy Lengha @ Rs. Goods returned to M/s Bride Palace as per debit note No.Recording of Transactions . 19.
24 Particulars J. 20 Purchases Purchases Account Amount Rs. 1. 30 Sundries as per purchases journal bl J. Date Particulars J.F. Date 2010 Sept. Date © no N C tt E o R be T re pu Particulars 2010 Sept.F. .000 Cr. Purchases return Purchases 19. 28 Purchases return 1. J.350 Cr. he Cr. 08 Particulars Zolta Fashions Account Dr.350 Date Dr. Amount Rs. J. Bombay Fashion House Account Dr.F. Date Dr. Date 2010 Sept. 10 Cr.350 d Amount Rs. J.126 (ii) Ledger Posting Books of M/s Hi-Life Fashions Ratana Traders Account Particulars J.900 Sept.F. Date Particulars J. Particulars 2010 Sept.01 Particulars J.F. 54.650 Cr. 19. Amount Rs.F. Accountancy Dr. Particulars 2010 Sept. 1. Amount Rs.440 Date 2010 Sept.330 Date 2010 Sept. Amount Rs. Date Particulars J. Amount Rs.F. Purchases return Purchases is 6.F. 9. Amount Rs.F. 15 Purchases Bride Palace Account Amount Rs.F. Amount Rs.
325 : 30 Kids Books @ Rs. Illustration 6 Enter the following transactions in the Sales and Sales Return book of M/s Vineet Stores: Dec. 15 Dec. 26 Dec. 60 each. Dec. 50 Musical Cards @ Rs.201: 2 Kids Books @ Rs. 19 Dec. 30 each 20 Ink Pads @ 16 each Goods Returned from M/s Rohit Stores as per credit note no. 50 each Sold goods on credit to M/s Abha Traders as per invoice no. 35 each Less 5% trade discount. 10 Dec. Date 2010 Sept.325 : 100 Greeting Cards @ Rs.329 : 50 Writing Pads @ Rs.204: 2 Colour Books @ Rs.670 .II Purchases Return Account Dr. 30 each Sold goods on credit to M/s Bharti Stores as per invoice no. 20 Animal Books @ Rs. 50 each Less 5% trade discount.01. 20 each.328 : 100 Greeting Cards @ Rs.207 : 20 Cards Books @ Rs. 50 each Sold goods on credit to M/s Mera Stores as per invoice no. Sold Goods on credit to M/s Mega Stationers as per invoice no.12 each. 127 Cr.Recording of Transactions . Amount Rs. 22 Dec. Goods returned from M/s Mega Stationers as per credit note no. Amount Rs. 30 Sold goods on credit to M/s Rohit Stores as per invoice no. 5 each Goods returned from M/s Abha Traders as per credit note no.F. 35 each Less 5% trade discount bl is Date Details he d 4. 20 each. 50 Colour Books @ Rs. 10 each 5 Note Book@ Rs. 05 © no N C tt E o R be T re pu Dec. 100 Fancy Envelopes @ Rs. 60 each 1 Animal Book @ Rs. 10 each. Date Particulars J.355 : 100 Cards Books @ Rs. 30 Particulars Sundries as per purchases return book J.F. 50 Note Books @ Rs.
128 Solution Books of Veneet Stores Sales (Journal) Book Date 2010 Dec. 31 Credit Note No.01 Dec.05 Dec. Sales return Particulars J.820 2010 Dec. Amount Rs. 05 Sales 3. Amount Rs.F. Amount Rs.10 Sales 2. Amount Rs. 2010 Dec. Particulars J. 2010 Dec. Date Dr. 15 Dec.800 3.F.F.375 2.500 14. Date Dr. Sales return © no N C tt E o R be T re pu (ii) Ledger Posting Rohit Stores Account Amount Rs. Cr.19 Dec.10 Dec. Date Particulars J.515 2. 201 204 206 Name of the Customer (Account to be credited) Rohit Stores Mega Stationers Abha Traders bl Particulars J. Amount Rs.F. 150 he d .F.010 Sales Return (Journal) Book Date 2010 Dec. 22 Dec. Date Particulars J.F.22 is L.F. 31 Invoice No. Date Particulars J. 325 328 329 335 340 Name of the Customer (Account to be debited) Rohit Stores Mera Stores Mega Stationers Abha Traders Bharti Stores Accountancy J. 2.15 Mera Stores Account Amount Rs. 2010 Dec. 170 150 333 653 Cr.26 Dec.820 2.515 Mega Stationers Account Amount Rs. 01 Sales 2010 Dec. 170 Cr. 30 Dec.F. 2800 Date Dr.
Sales he Cr. Adjustment Entries: In order to update ledger account on accrual basis.F.F. Depreciation and Commission received in advance. Particulars Sundries as per sales return book bl Particulars J.F. Date 2010 Dec.30 Sales return 333 .F.Recording of Transactions . such entries are made at the end of the accounting period.375 Date Particulars J. 653 Date Dr.F. 2.F. 14. Opening Entry: In order to open new set of books in the beginning of new accounting year and record therein opening balances of assets. which do not find place in special journals. Cr.31 Particulars J. Cr. liabilities and capital. Sundries as per sales book J. 31 Sales Return Account Amount Rs. Date 2010 Particulars J. Following transactions are recorded in this journal: 1. Date Date Particulars © no N C tt E o R be T re pu Dec. 4.19 Particulars J. Such as Rent outstanding. Amount Rs.F.010 Amount Rs. is Amount Rs. Date 2010 Dec.II Abha Traders Account Dr. J. 2. Date 2010 Dec. 2.6 Journal Proper A book maintained to record transactions. Amount Rs. Prepaid insurance. Amount Rs. the opening entry is made in the journal.26 Particulars J. Amount Rs.F. Dr. is known as Journal Proper or Journal Residual. Amount Rs. Bharti Stores Account d Sales Dec.500 Sales Account Dr. 129 Cr.
(v) Endorsement and dishonour of bills of exchange. Gains and Expenses.130 Accountancy © no N C tt E o R be T re pu Test Your Understanding . 5. Expenses accounts and revenue accounts which are not balanced at the time of balancing are opened to record specific transactions.I Select the Correct Answer (a) When a firm maintains a cash book. These are also called closing entries. (i) Journal Proper (ii) Purchases (journal) book (iii) Sales (journal) book (iv) Bank and cash account in the ledger (b) Double column cash book records: (i) All transactions (ii) Cash and bank transactions (iii) Only cash transactions (iv) Only credit transactions (c) Goods purchased on cash are recorded in the : (i) Purchases (journal) book (ii) Sales (journal) book (iii) Cash book (iv) Purchases return (journal)book 3. Opening Stock. Rectification entries: To rectify errors in recording transactions in the books of original entry and their posting to ledger accounts this journal is used. etc. (ii) Purchase/sale of items on credit other than goods. 4. (vii) Loss of goods by fire/theft/spoilage. (iii) Goods withdrawn by the owner for personal use. Purchases. Income. recording of the following transaction is done in the journal proper : (i) At the time of a dishonour of a cheque the entry for cancellation for discount received or discount allowed earlier. Other entries: In addition to the above mentioned entries in the points number 1 to 4. it need not maintain . bl is he d . Transfer entries: Drawing account is transferred to capital account at the end of the accounting year. Accounts relating to operation of business such as Sales. etc. and drawing are closed at the end of the year and their Total/balances are transferred to Trading and Profit and Loss account by recording the journal entries. (iv) Goods distributed as samples for sales promotion. (vi) Transaction in respect of consignment and joint venture.
with the object of ascertaining the net position of each amount. the difference is written on the credit side. which is shorter in order to make their totals equal. till finally settled or closed. the difference between bl (g) Credit balance of bank account in cash book shows : (i) Overdraft (ii) Cash deposited in our bank (iii) Cash withdrawn from bank (iv) None of these is The periodic total of sales return journal is posted to : (i) Sales account (ii) Goods account (iii) Purchases return account (iv) Sales return account he Total of these transactions is posted in purchase account : (i) Purchase of furniture (ii) Cash and credit purchase (iii) Purchases return (iv) Purchase of stationery d . Balancing of an account means that the two sides are totaled and the difference between them is shown on the side.II (d) Cash book does not record transaction of : Cash nature Credit nature Cash and credit nature None of these 131 (i) (ii) (iii) (iv) (e) (f) © no N C tt E o R be T re pu (h) The periodic total of purchases return journal is posted to : (i) Purchase account (ii) Profit and loss account (iii) Purchase returns account (iv) Furniture account Balancing of account means : (i) Total of debit side (ii) Total of credit side (iii) Difference in total of debit & credit (iv) None of these (i) 4. The amount of balance is brought (b/d) down in the next accounting period indicating that it is a continuing account. generally at the end of the accounting period. In case the debit side exceeds the credit side. if the credit side exceeds the debit side.7 Balancing the Accounts Accounts in the ledger are periodically balanced.Recording of Transactions . The words ‘balance c/d’ are written against the amount of the difference between the two sides.
Bought of M/s Burari. 2. 125. 04 Details © no N C tt E o R be T re pu Apr. trade discount 20%. . 125: (i) 50 Table lamps (Universal) @ Rs. 08 Apr. 06 Apr. 25. 01 Apr. Paid cheque to M/s Malika & Brothers for purchase of electric wires and plugs Rs. Ltd.000 and deposited money in the bank on the next day. Purchased from M/s Rungta.02 Apr. 20. on account vide Invoice No. 300. Paid rent by cheque Rs. Sales to M/s Ramneek on account vide invoice no. 42. Land Rs. 45.000 Watt of Smg. The accounts of expenses losses and gains/revenues are not balanced but are closed by transferring to trading and profit and loss account. Returned goods to Burari Ltd. 07 Apr. 05 Apr.000. Loan from M/s Dayal Traders. 17. Bought of M/s Handa Co.300.35. posting to ledger and balancing there of. vide invoice no. Return inwards from Ramneek : (i) 2 Immersion heaters.000.000. Sales to M/s Kapadia on credit vide invoice no. 60. 40. (ii) 1 Electric iron.000. (iii) 5 Electric iron@ Rs. 100: (iii) 2 Electric irons @ 320. (ii) 5 Table lamps @ Rs.l 03 Apr.l 04 Apr. 880 (i) 15 Immersion heaters @ 60: (ii) 15 Tube lights @ Rs. 12 Commenced business with cash Rs. Deposited in bank Rs. Paid cartage Rs. Purchased for cash furniture Rs. for cash: (i) 5 Immersion heaters 1000 watt @ Rs.000. 05 Apr. trade discount @ 12.132 Accountancy Date 2010 Apr. 11 Apr. 11 Apr.00.000.5%. 80 : (ii) 20 Electric kettles (General) @ Rs. 6. 1. 544: (i) 28 Immersion Heaters 1. 871: (i) 10 Immersion heaters1000 watt @ Rs. 10 Apr. : (i) 3 Table lamps (Universal) (ii) 2 Electric kettles (iii) 1 Electric iron. bl is he d the two appears on the debit side and is called debit and credit balance respectively. 4. Purchased stationery for cash Rs. The balancing of the an account is illustrated below with the help of an example explaining the complete process of recording the transactions. Ltd. 38. 80 and other charges Rs. and (ii) 40 Tube lights @ Rs. 02 Apr. 50. @ 6% Rs. @ Rs.
Sales to M/s Daman on account vide invoice no. Cash purchases from M/s Hitesh: (i) 5 Electric fans @ Rs. 3.280 2.600 by cheque.500.000. 8. cash discount allowed Rs. and Rs. is Amount Rs. Apr. Received cheque of Rs.000 to M/s Kochhar and co. 902: (i) 10 Electric kettles (General) @ Rs. Rs. Sales to M/s Daman on account vide Invoice No.450 by cheque. 21 Apr. 600. 28.157: (i) 10 Electric kettles @ Rs. 24 Apr. by cheque who allowed Rs. Sales to M/s Nutan on account vide invoice no. 100 (ii) 10 Immersion heaters 1000 watt @ Rs. Apr. on credit vide invoice no. The cheque deposited in bank after two days. Paid for advertisement Rs. Deposited in bank Rs.200.280 40. 16 Apr.F. Burari Ltd. 04 Apr. 18 Apr. 80 trade discount @ 20%. 1. 1. 26 Apr. 28 30 30 30 30 Purchases (Journal) Book Date Invoice No. 23 Apr. Rs. 14.410 he Apr. 125 (ii) 20 Electric lamps @ Rs.2. 25 Apr. 19 Apr.000. Paid to M/s Handa Co. 21 Apr. 30 544 125 205 157 Handa Co.925: 4 Electric Mixers @ Rs. bl L. Apr.450 6. 2. 981: (i) 15 Table lamps @ Rs. Purchased stationery on account from M/s Mohit Mart Rs.280 as discount. Cash sales of Electric wires and plugs Rs. 200. 320. 15 Apr. Paid electricity bill Rs.400 29. 130. Paid insurance Rs. (ii) 40 Electric irons (Special) @ Rs.958: (i) 2 Electric Mixers @ Rs. trade discount 20%. Paid telephone bill Rs. Purchased from M/s Kochhar Co.3.700 from M/s Ramneek for full and final settlement of claim. Burari Ltd. 2700 by cheque. 600.Recording of Transactions . 600. 1. 740. 5. by cheque discount allowed by them Rs. 80. 27 © no N C tt E o R be T re pu Apr.200. 21 Apr. 20 Purchased on account furniture from quality Furniture Ltd. Apr.II Apr. 23 Apr.205: (i) 25 Electric Mixers @ Rs. on credit vide invoice no. 19 133 Apr. 540. Withdrew Rs. Name of the Supplier (Account to be credited) 2010 Apr. 06 Apr. Made full and final payment to M/s Burari Ltd. d . Purchased from M/s Burari Ltd. 25 Apr.320. Kochhar Co. Sales to M/s Ramneek on account vide bill no. 1.000 for personal use. 8.
440 440 Credit Amount Rs. 07 Apr.F. 10 Apr. 1.410 d . L. Accountancy Amount Rs. 30 Furniture A/c Dr.200 1. 30 Purchases Return (Journal) Book Date 2010 Apr. 25 Apr. To Discount A/c (Discount received) Stationery A/c Dr. Debit Amount Rs.134 Sales (Journal) Book Date 2010 Apr. 871 880 902 925 958 981 Ramneek Kapadia Daman Ramneek Nutan Daman Name of the Customer (Account to be debited) L.400 1.200 2. 8. 8.F. To Mohit Mart A/c (Purchase of Stationery items on credit) Kochhar A/c To Discount A/c (Discount received) Total is L.300 bl L. To Quality Furniture A/c (Purchase of furniture on credit) Burari Ltd A/c Dr.300 2. 15 Apr. 26 Apr.200 1. 30 Ramneek Journal Proper Date Particulars 2010 Apr.000 320 3.000 320 3.F. 18 Apr.F.740 1.470 1.280 12. 30 Debit Name of the Supplier (Account to be debited) Burari Ltd.800 he 10.280 12. 12 Apr. Invoice No.800 © no N C tt E o R be T re pu Sales Return (Journal) Book Date Credit Name of the customer (Account to be credited) Apr. 23 Apr. 08 Apr. Amount 632 632 Amount Rs. 20 Apr. 27 Apr.
Date Particulars 2010 Apr. 2010 Apr.000 4.000 is 4.000 02 25.000 d .F.700 05 Bank Furniture Land Purchases Stationery Miscellaneous expenses Bank Rent Purchases Advertisement Bank Purchases Electric charges Burari Ltd.200 3.000 7.700 Cr.300 100 25. Capital Account Dr.F.700 30 May 01 Balance b/d 4. Bank Rs.000 225 1.000 2010 Apr. Date Particulars J. Amount Rs.00.000 03 3. 01 02 05 06 21 23 23 28 Cash Rs.000 2. Date Particulars L.000 02 40.700 3.Recording of Transactions .000 1. 135 Bank Rs.43.000 02 25.600 2.000 bl C 5.30 Balance c/d 1.000 © no N C tt E o R be T re pu 25 28 30 30 30 30 30 30 C 30 1.00. J. C C C 5.01 Cash 1.00. Kochhar & Co.320 Sales Cash 14.43. Amount Rs.000 42. Balance c/d C 40.222 The recorded transactions will be posted in the ledger.700 04 3. Cash Rs.222 1.450 28.00.500 06 11 11 16 23 24 25 C he 17.000 6.728 2.700 1.F.655 10.000 Capital Cash 6% Loan Cash Ramneek Cash C 2010 April 1. Bank Drawings Telephone charges Insurance Handa Co.700 1.655 10.200 73.200 73. 1.II Cash Book Date Particulars L.000 8.F.00.
02 Apr. Date 2010 Apr.000 8.F.000 14. d . Amount Rs. Particulars 2010 Apr. Amount Rs. J. 15 Cash Quality Furniture 6. 20 Particulars J.F. Amount Rs.F.136 6% Loan Account Dr.000 25. 07 Apr. Amount Rs. Date Dr. 25.F. 23 Apr.140 Cr. 25.000 25. 30 Balance c/d 14.F.F.F.000 bl Sales return Cash J.410 24. Amount Rs.500 10. is 440 3.400 4. 14. Accountancy Cr. Amount Rs. Date 2010 Apr.000 he Cr. 30 Particulars J.740 2.140 Date 2010 April10 April21 Particulars Sales Sales © no N C tt E o R be T re pu Sales Account Date Dr.000 Balance c/d Cash Ramneek’s Account Dr.910 Cr. 1. J. Date Particulars J. Particulars 2010 Apr. 30 Cash Sundries Furniture Account Amount Rs. 14.000 2010 Apr. Amount Rs.F.000 Date 2010 April 05 Particulars J.700 4. Date Particulars J.
300 3. Date 2010 Apr.30 Particulars J. 24 Apr. Date Particulars J.000 Date 2010 Apr. Date Miscellaneous Expenses Account Amount Rs.000 42.F.Recording of Transactions .410 61. 11 Apr. 02 Particulars J. 42.F. d .F. 03 Apr. Cr. Amount Rs. Particulars 2010 Apr.200 5.F.II Land Account Dr. Date Dr.F.000 Cash Balance c/d Purchases Account Dr.F. Amount Rs.000 225 3. Amount Rs. J.000 42. J.700 40. 04 Apr. 26 Cash Mohit mart 2. 137 Cr. Amount Rs. Date 2010 Apr. Amount Rs. 17.335 Date Particulars © no N C tt E o R be T re pu Stationery Account Amount Rs. Cr.F.F.500 Dr. 42. is he Cr. 30 Particulars J. 05 Cash 100 Bank Bank Cash Sundries bl J. Amount Rs. 100 Date Particulars J. Particulars 2010 Apr.
F. he J. 1. 04 Particulars J.200 1.F. Date 2010 Apr. 30 2010 Bank bl Particulars J.320 Drawings Account Date Dr. 2. J.F.200 Electric Charges Account Dr.F. Accountancy Cr. Amount Rs.F. Amount Rs. Date Particulars J. J. Amount Rs.700 2. Amount Rs. Cr. Date Date Particulars Date Particulars J. Amount Rs.000 8. Cash © no N C tt E o R be T re pu 2010 Apr. Particulars 2010 Apr.138 Rent Account Dr.16 Particulars J. Cr. Cr. Date 2010 Apr.000 Dr. Amount Rs.F. is Cr. Particulars 2010 Apr.F. Telephone Charges Account Amount Rs.000 Advertisement Account Dr. 25 Cash 1. 4.F.700 Date Date Particulars J. Amount Rs.320 1. Amount Rs. 30 Cash 8. Amount Rs. Date Particulars J.000 4. d Bank .F.F.
200 3.Recording of Transactions . Date 2010 Apr.450 2. 2. 30 Bank 2.200 2010 Apr. Date Particulars J. 26 Purchases Return Account Amount Rs. Amount Rs. Amount Rs. 632 632 Cr. 3. Sundries Particulars J. Amount Rs. 2010 Apr. 1.600 1. Date Dr. Date Particulars J.F. 15 Particulars Date Particulars J. Date 2010 Apr. 139 Cr.F.600 Quality Furniture Account Dr. 30 Balance c/d 3. Date Particulars J.000 Cr.450 2. Purchases © no N C tt E o R be T re pu 2010 Apr. Amount Rs. Amount Rs.F. 30 Handa Company Account Amount Rs.F. 30 Particulars J. 8.F.000 Date 2010 Apr.200 Cr.200 3. Amount Rs. Date Dr.F. 2010 Apr. Balance c/d Furniture Mohit Mart Account Dr. Date bl Particulars J.450 he Cr. J.F.F.F.II Insurance Account Dr.000 8.F. d Bank .000 8.450 2010 Apr. 30 Particulars J. 04 is 8. Stationery Particulars J. Amount Rs. Amount Rs.
600 Dr.680 Date 2010 Apr.280 Amount Rs. 2010 Apr. 12 Apr. 440 440 Date Dr.470 Particulars 2010 Apr.F. 30 Kapadia Account Date Dr. Date 2010 Apr. J. Date Particulars J. 632 7.F. 21 Particulars J.470 1. 2010 Apr. Particulars 2010 Apr.280 d Purchases 6. 28. Date Kochhar Account he 8.600 3.140 Burari Ltd. 08 Sales 2010 Apr. Amount Rs. 1.F. 19 Particulars Bank Discount © no N C tt E o R be T re pu Sales Return Account Amount Rs. 29. 30 Balance c/d bl Purchases J.470 Amount Rs. Amount Rs. Amount Rs. 1.F.280 29. Cr. 06 Apr.300 3.F. Purchases return Bank Discount Purchases 2. Particulars J. Cr.F. Date Particulars J.F. 30 Sundries . 1. 3. Amount Rs. Date Particulars J. 18 Apr.728 320 8.280 Date 2010 Apr. Accountancy Cr.680 Cr. 27 Sales Sales 2010 Apr.300 2.400 . 30 is J. Cr.280 29. J.470 1. Amount Rs. 30 Balance c/d Daman Account Date Dr. 25 Particulars J. Amount Rs.F.F. Account Dr.F.000 1.600 Particulars 2010 Apr. Amount Rs.
.200 ... (b) One debit account and more than one credit account in a entry is called compound entry. 25 Apr... Amount Rs.. (b) In Journal proper.F......discount is recorded...transactions..II 1.. 23 Particulars J.F.200 Date 2010 Apr.... (i) Credit balance shown by a bank column in cash book is ..... Date 2010 Apr.F..........600 he Cr.are recorded.. Amount Rs.. Date 2010 Apr...amount.. 30 Particulars Burari Ltd Kochhar © no N C tt E o R be T re pu Test Your Understanding .... Discount Received Account Dr.... (d) Assets sold on credit are entered in . (c) Return of goods purchased on credit to the suppliers will be entered in ..transactions are also recorded. journal... (c) Assets sold on credit are entered in sales journal.... (j) The amount paid to the petty cashier at the beginning of a period is known as . (f) Cash book records transactions relating to receipts and payments.. Amount Rs... Amount Rs.. Date Particulars J.....Recording of Transactions ..... (g) Ledger is a subsidiary book. d Sales Balance c/d 1.. (e) Cash sales are entered in sales journal.. only.. (d) Cash and credit purchases are entered in purchasejJournal.than the credit side.... (e) Double column cash book records transaction relating to .. Journal... State whether the following statements are True or False : (a) Journal is a book of secondary entry.... (f) Total of the debit side of cash book is . (g) Cash book does not record the ... 2.. 30 Particulars J.and . 141 Cr...... (k) In purchase book goods purchased on .200 1..F.. (h) Petty cash book is a book having record of big payments. (h) In double column cash book ......200 1... 1. bl is 320 1. Fill in the Correct Words : (a) Cash book is a ..... J.280 1.II Nutan Account Dr.
7. 7. 4. Petty cash book : A book used to record small cash payments. 8. What do you understand by Imprest amount in petty cash book? 1. What is contra entry? How can you deal this entry while preparing double column cash book? bl is • • • • • Posting • Day books • Cash book • Petty Cash book • Sales return (Journal) Book Sales (Journal) Book Balancing of Accounts Purchase (Journal) book Purchases return (Journal) Book he Key Terms Introduced in the Chapter d . 3. Write the difference between return Inwards and return ouwards. Briefly state how the cash book is both journal and a ledger. Balancing of account means total of debit and credit side. Transaction recorded both on debit and credit side of cash book is known as contra entry. 2. 2. 3. 2. 6. Sales Return Book : A special book in which returns of merchandise sold on credit are recorded. 5. 11. Purchase journal : A special journal in which only credit purchases are recorded Sales journal : A special journal in which only credit sales are recorded Purchases Return Book : A book in which return of merchandise purchased is recorded. Cash book : A book used to record all cash receipts and payments. 10. 4. 9. 5. What is the purpose of contra entry? What are special purpose books? What is petty cash book? How it is prepared? Explain the meaning of posting of journal entries? Define the purpose of maintaining subsidiary journal.142 (i) (j) (k) (l) Accountancy Cash received is entered on the debit side of cash book. What is cash book? Explain the types of cash book. Explain the need for drawing up the special purpose books. © no N C tt E o R be T re pu Questions For Practice Short Answers 1. Credit purchase of machine is entered in purchase journal. What do you understand by ledger folio? What is difference between trade discount and cash discount? Write the process of preparing ledger from a journal. Summary with Reference to Learning Objectives 1. 6. 3. Long Answers Journal : Basic book of original entry.
Record the following transaction in simple cash book for November 2010: Rs 01 Cash in hand 12. What do you understand by balancing of account? Numerical Questions Simple Cash Book 1. 01 Started business with cash 80. 6. Record the following transactions in a bank column cash book for December 2010: Rs. 12.000 15 Sold goods for cash 9.Recording of Transactions . 01 Cash in hand 12. What is petty cash book? Write the advantages of petty cash book? 5. 13. © no N C tt E o R be T re pu (Ans.765) Bank Column Cash Book 4. Describe the advantages of sub-dividing the Journal.Kumar 1. 6.960 16 Sold goods for cash 800 20 Paid to Manish 590 25 Paid cartage 100 31 Paid salary 1. Cash in hand Rs.170) 3.000 04 Deposited in bank 50.000 Enter the following transaction in Simple cash book for December 2010 : Rs.500 04 Cash paid to Hari 600 07 Purchased goods 800 12 Cash received from Amit 1. Enter the following transactions in a simple cash book for December 2010: Rs.750 06 Paid to Sonu 45 08 Purchased goods 600 15 Received cash from Parkash 960 20 Cash sales 500 25 Paid to S.000 05 Cash received from Bhanu 4.000 07 Rent Paid 2.000 18 Purchase stationery 300 22 Cash paid to Rahul on account 2.000 bl is he d . Cash in hand Rs.000 10 Purchased goods Murari for cash 6. Cash in hand Rs.000 28 Paid salary 1.000 30 Paid rent 500 (Ans.200) 143 2. 01 Cash in hand 7.II 4.200 30 Paid rent 600 (Ans.
000 5. 70.000 1.000) Accountancy 1.144 10 15 22 25 30 31 (Ans.000 2. Started business with cash 1.000 20.000 Commission received 5.000 30.000) 6. 37. 64.000: cash at bank Rs.000 1. 01 03 05 06 10 14 18 20 22 27 30 (Ans.000 Drew cash for personal use 2.000 8.500 Bank overdraft 3.000 10 Cash deposited into bank 4.000 8. 2010 deposited into bank Sold goods to Rani 12.000 10.000 7. 35.000 Purchased goods from Sushmita 20.000 Cash in hand Rs.500) Rs.000 7. Rs. 5. 01 Cash In hand 7.000 10.000 Paid to Sushmita cash 20. Prepare a double column cash book with the help of following information for December 2010 : d .500 : Cash at bank Rs. Received cash from Rahul Bought goods for cash Bought goods by cheque Paid to Shyam by cash Drew from Bank for office use Rent paid by cheque Cash in hand Rs. Prepare double column cash book from the following information for September 2010: Rs.000 Sold goods to Dinker and received a cheque 20. Cash at bank Rs.000 20 Paid rent 500 bl is he 5. 11.20.500 03 Paid wages 200 05 Cash sales 7.000 15 Goods purchased and paid by cheque 2. 50.000 Cash paid into bank 50.000 500 2.000.000 Cheque received on December 06. Enter the following transactions in double column cash book of M/s Ambica Traders for November 2010: Commenced business with cash Opened bank account with ICICI Purchased goods for cash Purchased office machine for cash Sales goods on credit from Rohan and received chaeque Cash sales Rohan’s cheque deposited into bank Paid cartage by cheque Cash withdrawn for personal use Paid rent by cheque Cash in hand Rs.000 Cartage paid in cash 500 Received cash from Rani 12.000 © no N C tt E o R be T re pu 01 03 05 10 15 18 20 22 25 30 (Ans.
01 2010 : cash in hand Rs.100 Cash at bank Rs.000 145 © no N C tt E o R be T re pu 10.000 700 20. Cash in hand Rs. 8.000 15.500 2. 4.200 6.900) 8.300 6. Enter the following transaction in a double column cash book of M/s.800 cash at bank Rs.500 5.000 1. 3. Cash in hand Rs. He had the following transaction in the month of December.300 1. 2010: Rs. 2.II 25 Drew from bank for personal use 400 30 Salary paid 1.000 (Ans.000 bl is for the Rs.000 1.354 and balance in bank current account Rs. Cash in hand Rs.000 1.000 2. received cheque(deposited same day) Purchased motor car paid by cheque M/s Ruchi trader started their cash book with the following balances on Dec. 2.000) 01 Rs.000 500 6.000 2.7560.000 10.200 200 8.Recording of Transactions . 10.000 he d . Prepare double column cash book from the following transactions year December 2010: 01 Cash in hand Cash at bank 03 Purchased goods for cash 05 Received cheque from Jasmeet 08 Sold goods for cash 10 Jasmeet’s cheque deposited into bank 12 Purchased goods and paid by cheque 15 Paid establishment expenses through bank 18 Cash sales 20 Deposited into bank 24 Paid trade expenses 27 Received commission by cheque 29 Paid Rent 30 Withdrew cash for personal use 31 Salary paid (Ans.200 1. paid by cheque Cash sales Paid trade expenses Sales goods.000 7.800. 17.000 3. Bank overdraft Rs.1.000 10.000 10.000 7.000 6. 1.500) 9.Mohit Traders for January 2010 : Cash in hand Bank overdraft 03 Goods purchased for cash 05 Paid wages 10 Cash sales 15 Deposited into bank 22 Sold goods for cheque which was deposited into bank same day 25 Paid rent by cheque 28 Drew from bank for personal use 31 Bought goods by cheque (Ans.000 20. 03 05 08 12 15 18 Cash sales Purchased goods. 8.000 1.
500 Rs.000 2.060) Petty Cash Book 11. Rs. 100 12 40 80 90 80 13. Cash in hand Rs.2.000 7.000.146 Cheque received from Manisha(deposited same day) Cash Sales Manisha’s cheque returned dishonoured Paid Rent Paid telephone expenses by cheque Cash withdrawn for personal use Prepare bank column cash book (Ans. 15. Cash balance Rs.000 500 2. The imprest amount is Rs. Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2010 : bl is he d . 925) 12. January 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 (Ans. Record the following transactions during the week ending Dec.30. Stationery Bus fare Cartage Taxi fare Wages to casual labour Postage Cash balance Rs.954 cash at bank Rs. 98) Other Subsidiary Books Prepare petty cash book from the following transactions. 20 22 25 28 29 31 Accountancy 10.000 © no N C tt E o R be T re pu 24 25 25 26 27 29 (Ans. 6. 2010 with a weekly imprest Rs.
3 each Packet water colour @ Rs.Bansal electronics: September 01 Sold to Amit Traders as per bill no.200 2.299) 14. 28 Return outwards to M/s Handa Traders (Ans. Enter the following transactions in sales (journal) book of M/s.Recording of Transactions . B&W.2. 2 T. 20 each Trade Discount 5% Purchased from Lamba Furniture as per invoice no. 10.800 per T.10 each 20 Color Books @ Rs.399 10 Tape recorders @ Rs.100) 15. 300 each 28 Sold to Harish Trader as per bill no. Ltd. Sold to Arun Electronics as per bill no.V.8 each 50 Files @ Rs.3. Total of sales book Rs. 6.(6”) @ 800 Per T. set.4.500 bl is 550 he d .4351 5 T. 43.3201 2 Chairs @ 600 per chair 1 Table @ 1000 per table Bought from Mumbai Traders as per invoice no.V. 1.1132 40 Ink Pads @ Rs. Rs.60 each 80 Gel Pens @ Rs.000 per T. sets (21”) Colour @ Rs. for list price Rs.II 01 Bought from Rahul Traders as per invoice no. 600 each 5 Walkman @ Rs. Bought from Global Stationers as per invoice no.15 each 50 note books @ Rs.V.V.4321 20 Pocket Radio @ 70 per Radio 2.20 each Trade discount 10%.40 per packet 147 15 23 25 20 © no N C tt E o R be T re pu Returned goods to M/s Kartik Traders Goods returned to Sahil Pvt.4430 10 Mixer Juicer Grinder @ Rs.100 per rim 400 drawing Sheets @ Rs. sets (20”) B&W @ Rs.000 less 10% trade discount. 800 each. (Ans. Goods returned to M/s Kohinoor Traders. 22 Sold to Handa Electronics as per bill no. Prepare a purchases return (journal) book from the following transactions for January 2011.V. 8.V.050) 05 10 17 (Ans: Total of purchases book Rs. 4. T.1111 10 Paper Rim @ Rs. Total of purchases return book Rs.20041 40 Registers @ Rs.
) 9. purchases book Rs.670.20.000 Ramesh (Cr.16. 01 04 06 07 08 10 14 15 17 20 22 24 © no N C tt E o R be T re pu 18. 4.000 Purchase from Kushal Traders 2. for list price of 5. Purchases return book Rs.100 Sachin returned goods 600 Returns to Kushal Traders 280 Sold to Mukesh 3.000 Cash at bank 12.870.350).000 28 Return outwards to Kirit and Co.200 1.148 Accountancy 16.000 Bills receivable 7.000 less 10% trade discount 28 Ramesh Brothers returned goods Rs.300 Purchased from Kunal Traders 5. 1.500 800 1.380. Prepare proper subsidiary books and post them to the ledger from the following transactions for the month of February 2011: Rs. Goods sold to Sachin 5.000 Stock (Goods) 5. Prepare Return Inward Journal(Book) from the following transactions of M/s Bansal Electronics for November 2010: 04 10 18 M/s Gupta Traders returned the goods Goods returned from M/s Harish Traders M/s Rahul Traders returned the goods not as per specifications 28 Goods returned from Sushil Traders (Ans : Total of sales return Rs.400 Bills payable 2. Cash in hand 6.000 17.480 Sold goods to Manish Traders 2.1.700 less 10% trade discount 25 Sold to Shri Chand goods 6600 less 5% trade discount 26 Sold to Ramesh Brothers 4.) 3.700 Himanshu (Dr.200 Bought of Naresh 4. sales return book Rs. The following balances of ledger of M/s Marble Traders on April 01. 1.200 Furniture purchased from Tarun 3.060 Return to Kunal Traders 200 Return inwards from Mukesh 250 Purchased goods from Kirit & Co. Ans : (Total of sales book Rs. 500.1. 2011 Rs.) 10.000 bl is he d .500) Recording.000 Rahul (Dr. Posting and Balancing Rs.
(a) False (e) False (i) True (b) True (f) True (j) True Rs. (iii) i.200 4.700 300 10. (iv) b.II Transactions during the month were: April 01 Goods sold to Manish 02 Purchased goods from Ramesh 03 Received cash from Rahul in full settlement 05 Cash received from Himanshu on account 06 paid to Remesh by cheque 08 Rent paid by cheque 10 Cash received from manish 12 Cash sales 14 Goods returned to Ramesh 15 Cash paid to Ramesh in full settlement Discount received 18 Goods sold to Kushal 20 Paid trade expenses 21 Drew for personal use 22 Goods return from Kushal 24 Cash received from Kushal 26 Paid for stationery 27 Postage charges 28 Salary Paid 29 Goods purchased from Sheetal Traders 30 Sold goods to Kirit Goods purchased from Handa Traders Journlise the above transactions and post them to the ledger.000 100 60 2. bank (i) overdraft (b) cash (f) more (j) imprest (c) purchases return (g) credit (k) credit (c) False (g) True (k) False 2.Recording of Transactions .000 6.(ii) d. (ii) c.000 bl h.000 8.000 200 1.200 3.I e.000 6000 5.200 6.000 1.II 1. (ii) 149 © no N C tt E o R be T re pu a.500 7. Checklist to Test Your Understanding Test Your Understanding . (a) subsidiary (e) cash.000 9.000 3. (ii) f. 1. 3. (iii) (d) journal proper (h) bank (d) False (h) False (l) False is he d . (iv) g .000 1.000. (iii) Test Your Understanding .000 6.
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