PAN African eNetwork Project

Bachelor of Financial & Investment Analysis
FINANCIAL ACCOUNTING

Semester – I
Prof. Adarsh Arora in place of Prof. Tanu Agarwal
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TOPICS TO BE COVERED

• • • • • •

What is Subsidiary Book Need for subsidiary Book Meaning of Cash Book Advantages of cash book Types of cash book Other subsidiary books like Purchase Book, Sales Book, Purchase Return Book, Sales Return Book

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Meaning of special Journals (Subsidiary books)
• Special journals refer to the journals meant for specific transactions of similar nature. Special journals are also known as subsidiary books or day books. It is important to know that the subsidiary books are not a part of the double entry system of bookkeeping. It is a memorandum book of transactions which are subsequently entered in the ledger. • Before recording transactions in these day books, it is necessary to explain the special meaning given in business to the words ‘goods’, ‘purchases’ & ‘sales’

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• Goods:- It refers to items forming part of the stock-in-trade of a business unit, which are purchased for, to be consumed in the process of production or to be resold at a profit. Goods a/c can further be classified into following types: • Purchase A/c:- It refers to the purchase of goods for resale , and not the purchase of assets or stationery. The purchase account, therefore, only contains purchases of goods for resale. • Sales A/c:- It refers to the sale of goods which form part of the stock-in-trade of the business unit. The sale of old asset are not ‘sales’ in the accounting meaning of that word. • Purchase Return A/c:- It refers to return of goods purchased to the supplier. • Sales Return A/c:- It refers to return of goods sold by the customer.

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Need for subsidiary books
• When the number of transactions is large, it is practically impossible to record all the transactions through one journal because of the following limitation of Journal: • The system of recording all the transactions in a journal requires • (i) the writing down of the name of the account involved as many times as the transactions occur, and (ii) an individual posting of each account debited & credited & hence involves the repetitive journalizing & posting labour. • Such a system does not provide the information on prompt basis. • Such a system does not facilitate the installation of an internal check system since the journal can be handled buy only one person. • The journal becomes bulky & voluminous.
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• To overcome the shortcoming of the use of the journal only as a book of original entry, the journal is subdivided into special journals. • The journal is subdivided in such a way that a separate book is used for each category of transactions which are repetitive in nature & are sufficiently large in number. • The Performa & number of special journals vary according to the requirements of each enterprise. In any large organization following special journals are generally used:

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Name of special journal 1 Cash Journals (a) Simple cash book (b) cash book with discount column © cash book with bank & discount column (d) petty cash book 2 Goods Journals (a) Purchase book (b) Sales book © Sales return book (return inward book) (d) Purchase return book (return outward book)
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Specific transactions to be recorded Cash transactions Cash & discount transactions Cash, bank & discount transactions Petty cash transactions Credit purchases of goods Credit sales of goods Goods returned by those customers to whom goods were sold on credit Goods returned to those customers from whom goods were purchased on credit

Name of special journal 3. Bills Journals (a) Bills receivable book (b) Bills payable book 4 Journal Proper

Specific transactions to be recorded Bills receivable drawn Bills payable accepted

Those transactions which do not fall within the scope of special journal

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ADVANTAGES OF SPECIAL JOURNALS (SUBSIDIARY BOOKS)
• • Facilitates division of work: The accounting work can be divided among many persons. Permits the installation of internal check system: The accounting work can be divided in such a manner that the work of one person is automatically checked by another person. With the use of internal check, the possibility of occurrence of error/fraud may be avoided. Permits the use of specialized skill: The accounting work requiring specialized skill may be assigned to a person possessing the required skill. With the use of a specialized skill, prompt, economical & more accurate supply of accounting information may be obtained.

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• Time & labour saving in journalizing & posting: For instance, when Sales Book is kept, the name of sales account will not be required to be written down in the journal as many times as the sales transactions & at the same time, sales account will not be required to be posted again & again since only a periodic total of sales book is posted to the sales account.

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Meaning of Cash Book
• Cashbook is a special journal in which all cash transactions are recorded directly. Cashbook shows the cash receipts and the cash payments. The Cashbook resembles a ledger with the debit and credit sides, and the balance represents cash on hand at the end of the accounting period. • As soon as the cash transaction takes place, it is recorded in the Cashbook. Cash account is not opened separately, when a Cashbook is maintained because Cashbook serves the purpose of the ledger also.

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Types of Cash book
1.Simple Cashbook/Single Column Cashbook: In simple Cashbook all the cash transactions are recorded in chronological order. All cash receipts are entered on the debit side and cash payments on the credit side of the Cashbook. The difference between the two sides is the cash in hand.

2.Double Column Cashbook: This Cashbook is an extension of simple Cashbook. An additional column is maintained to record discount involved in the settlement of debtors and creditors in the double column Cashbook. Cash discount usually occurs in the settlement of trade debts. It is an allowance made by the receiver of cash to the payer for the prompt payment. Cash received from debtors is recorded in the cash column and discount allowed in the discount column on the debit side of the Cashbook. Similarly, credit side of the Cashbook records cash paid to the creditors in cash column and discount received in the discount column.
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3.Three Column Cashbook (Cashbook with cash, discount and bank columns): With the development of banking sector, and frequent use of banking instrument, Cashbook with additional column for bank transactions came into existence. Thus, the three column Cashbook is nothing but ledger accounts for cash and bank with additional information about discount allowed and discount received.

4. Petty Cash Book: Petty cash book is the book which is used for the purposes of recording the payment of petty cash expenses. Petty cashier is the person who is authorized to make payments of petty cash expenses & to record them in petty cash book. It works according to imprest system. Imprest System: When an analytical Petty Cashbook is maintained for recording the petty expenses, it will be practically more convenient to consider the petty cash as a separate account and take cheques issued for the petty cash imprest as a debit to petty cash account and all petty expenses paid as credits in petty cash account.
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Illustrations
• Simple Cash Book: • Prepare a single column Cashbook of Raja Ram from the following particulars: • 1.1..2001He commenced business with Rs 1,00,000of which 20,000 was borrowed from Mr Basant • 2.1.2001Purchased furniture for office use worth Rs 5,000 • 3.1.2001 Paid petty cash expenses of Rs.2,000. • 4.1.2001 Bought goods from Mohan for cash Rs.20,000. • 4.1.2001 Paid Rs.20,000 to Charat for goods purchased on credit. • 5.1.2001 Sold goods to Shyam for cash Rs.10,000. Received Rs.38,000 from Hari for goods sold on credit. 16.1.2001 Drew cash for personal use Rs.1,000.

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• 31.1.2001 Paid salary to Sri Ram, an employee, Rs.1,500 • 31.1.2001 Repaid the loan taken from Mr. Basant including interest @18% p.a. Solution: Dr. CASH BOOK Cr Date Particulars L Amt F 80,000 20,000 Date 2.1.2001 3.1.2001 Particulars By Furniture a/c By Petty Expenses a/c By Purchases a/c L Amt F 5,000 2,000 20,000

1.1.2001 To Capital a/c 1.1.2001 To Loan from Basant a/c

4.1.2001

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Date

Particular L Amt s F

Date

Particulars

L Amt F

5.1.200 To Sales 1 5.1.200 To Hari’s 1 a/c

10,000
38,000

4.1.2001 16.1.2001 31.1.2001 31.1.2001

By Charat a/c By Drawings a/c By Salary a/c By Interest on 31.1.2001 Loan a/c By Loan from 31.1.2001 Basant a/c
By Balance c/d

20,000 1,000
1,500 300

20,000

To Balance B/d
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148000 78200

78, 200 148000

• Double Column Cash Book
Question: Compile Cashbook with discount column from the following transactions for the month of March, 2001 • 1.3.2001 Mr. Ganesh commenced business with cash Rs.65,000. • 3.3.2001 Bought goods for cash Rs.6,850. • 4.3.2001 Paid Mr. Mohan cash Rs.950; discount was allowed thereon Rs.50. • 6.3.2001 Deposited in bank Rs.40,000 • 6.3.2001 Paid for office furniture by cash Rs.4,650. • 9.3.2001 Sold goods for cash Rs.30,000. • 12.3.2001 Paid wages by cash Rs.1,200. • 13.3.2001 Paid for stationery Rs.400. • 15.3.2001 Sold goods for cash Rs.25,000.
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Continued…….
• 17.3.2001 Paid for Miscellaneous expenses Rs.450. • 19.3.2001 Received cash from Mr. Tilak 4,850; Allowed him discount Rs.150. • 21.3.2001 Purchased a radio set for Rs.2,500 for personal use. • 22.3.2001 Paid salary Rs.4,000. • 25.3.2001 Paid rent Rs.900. • 28.3.2001 Paid electricity bill Rs.350. • 29.3.2001 Paid advertising expenses Rs.400. • 31.3.2001 Paid into bank Rs.25,000.

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Solution
Date Particul L Disc Cash ars F ount
65,000 30,000 25,000

Date

Particular s
By Purchases a/c By Mohan a/c By Bank a/c By Office Furniture a/c By Wages a/c

L Dis Cash F cou nt
6,850

1.3.2001 To Capital A/c 9.3.2001 To Sales A/c To Sales 15.3.200 A/c 1

3.3.200 1

4.3.2001
6.3.2001 6.3.2001

50

950
40,000 4,650 1,200

12.3.200 1

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Date

Partic ulars
To Tilak A/c

L Dis Cas F cou h nt
150 4850

Date

Particular L Dis Cash s F co unt
400

19.3.2001

13.3.2001 By Stationary a/c 17.3.2001 By Miscellane ous Expenses a/c 21.3.2001 By 2 Drawings a/c 2.3.2001 By Salary a/c 25.3.2001 By Rent a/c

450

2,500

4,000 900

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Dat e

Particul L ars F

Dis Ca cou sh nt

Date

Particulars

L Di Cash F sc o u nt 350

28.3.2001 By Electricity a/c 29.3.2001 By Advertising 31.3.2001 a/c 31.3.2001 By Bank a/c By Balance c/d

400
25,00 37,200 124850

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• Three Column Cashbook Question:
1.3.2001 Cash in hand 2,500 Cash at bank 10,000 2.3.2001 Paid into bank 1,000 5.3.2001 Bought furniture and issued cheque 2,000 8.3.2001 Purchased goods for cash 500 12.3.2001 Received cash from Mohinder 980 Discount allowed to him 20 14.3.2001 Cash Sales 4,000 16.3.2001 Paid to Amaranth by cheque 1,450 Discount received 50 19.3.2001 Paid into Bank 400 23.3.2001 Withdrawn from Bank for private expenses 600
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• 24.3.2001 Received cheque from Patel 1,430 allowed him discount 20 • 28.3.2001 Withdrawn cash from bank for office use 2,000 • 30.3.2001 Paid rent by cheque 800

• Solution on next coming slides:

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Date

Particular s

L Dis F cou nt

Cash

Bank

Date

Particular s

L F

Di sc ou nt

Cash

Bank

1.3.01

2.3.01
12.3.01 14.3.01 19.3.01

To Balance b/f To Cash A/c To Mohinder A/c To sales To cash a/c

2500 C

10000

2.3.01

1000
20 980 4000 c 400

5.3.01
8.3.01 16.3.0 1 19.3.0 1

By Bank C A/c By Furniture A/c By Purchase A/c By Amarnath A/c By bank C A/c

1000

2000
500

50
400

1450

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Date

Particular s

L Dis Cash Bank F cou nt

Date

Particula rs

L F

Di sc ou nt

Cash

Bank

24.3.01 28.3.01

To Patel A/c To bank A/c

20 C 2000

1430

23.3. 01 28.3. 01 30.3. 01 31.3. 01

BY Drawing A/c By cash A/c By rent A/c By balance c/d

600 C 2000 800

7580 40 9480

5980 12830

40

9480

1283 0

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Note:-Here in the cash book, against some entries ‘C’ letter is written. It means that those entries are contra entries. Meaning of contra entries has been explained as under. • CONTRA ENTRIES If a transaction affects both cash account and bank account in the opposite sides, the entry for recording the transaction is called a contra entry. Entries which are made on both sides of the Cashbook are called contra entries. For contra entries no posting is required because the double entry is completed in the Cashbook itself. For example, cash deposited into bank and cash withdrawn from bank affect cash and bank account only. Both aspects of these transactions are recorded in cash column and bank column of the Cashbook respectively. No ledger posting is required, because both aspects of the transaction are recorded in the Cashbook itself. This fact is indicated in the Cashbook by writing ‘C’ in L.F. column

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• Petty Cash Book (Illustration) • The following transactions took place during the week ending 28th of May 2001. How will you record them in Petty Cash Book (as memorandum) which is maintained with a weekly ‘float’ of Rs 6000? Date 2001 May 23 24 25 26 27 28 Particulars Postage Casual labour Taxi hire Writing pad & registers Cartage Bus fare Rs 800 1000 1200 1600 400 600

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solution
Date Partic Total ulars Date Partculars Po sta ge Con veya nce Statio Cart nery age Othe r expe nses tptal

2001 May 23

To balan ce b/d

6000

2001 May 23 May 24 May25 May26 May 27 May28 May31

Postage 800 Casual Labour Taxi hire 1200 Writing pad Cartage Bus fare 600 Balance c/d
800 1800

1000

1600

400

800 1000 1200 1600 400 600 400 6000

6000 June1 To Balan ce 400

1600

400

1000

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Advantages of Petty Cash Book
1. Saving of Chief cashier’s time: The time of chief cashier is saved when petty expenses are recorded in petty cash book. 2. Saving of labor in posting: There is saving in labor in posting because of the following two reasons: • (a) Limited no of accounts are opened for heads of petty expenses only. • (b) Periodical totals (say monthly) of each column of expenses are posted to the debit of the respective ledger accounts. 3. Control over mistakes: The chances of mistakes are reduced since the chief cahier regularly examines the petty cash book.
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4. Control over petty expenses: Petty expenses are kept within the limits of imprest since the petty cashier can never spend more than the available petty cash. 5.control over fraud: Misappropriation if any, is always kept within the limit of imprest. 6. Benefits of specialization: The benefits of specialization are available since recording of cash transactions is divided between main cash book & petty cash book

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Similarities between main cash book & Petty Cash book
1. Both are books of original entry. In other words, both serve the purpose of journal. Both are journal in the sense that the transactions are recorded in it for the first time from the source document. Both are books of final entry. In other words, both serve the purpose of ledger. Both are ledger in the sense that main cash book serves the purpose of ‘main cash Account’ and ‘Bank Account’ (only in case of three column cash book) & petty cash book serves the purpose of ‘petty cash account’.

2.

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• OTHER SUBSIDIARY BOOKS • Also known as the Purchases Journal, this book is used to record credit purchases of goods only. The term ‘goods’ covers only those items procured by the business for resale. • A simple format of purchase book is given below: Purchase book of XYZ Ltd

Date

Particular s (Name of Supplier, etc.)

Ledger Folio

Inward Amount Invoice No Rs.

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PURCHASES RETURNS BOOK • This subsidiary book is used to record the goods purchased on credit and sent back to suppliers as not conforming to specifications or for any other reason. • simple format of purchase return book is given below: • Date Purchase Return book of XYZ Ltd Particulars Ledger Debit Note (Name of Folio No * Supplier, etc.) Amount Rs.

* Debit note is document prepared by the purchaser to inform the supplier that his account has been debited with the amount mentioned & for reason stated therin. Debit note contains the date of return, name of supplier to whom the goods has been returned, details of goods. Each debit note is serially numbered
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SALES BOOK • Also known as the Sales Journal, this subsidiary book is used to record the sale of goods on credit. • simple format of sales book is given below: SALES BOOK OF XYZ LTD

Date

Name of customer

Ledger folio

Outward invoice no

amount

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SALES RETURNS BOOK • This book is used to record the transactions relating to goods sold on credit and received back from the customers as not conforming to the specifications or for any other reason. • Simple format of sales return book is given below SALES RETURN BOOK OF XYZ LTD Date Name of customer Ledger folio Credit Note amount no*

* A credit note is a document prepared by the seller to inform the

buyer that his account has been credited with the amount mentioned & for he reason stated therein.

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BILLS RECEIVABLE BOOK • The Bills Receivable of an enterprise consists of all Promissory Notes given or Bills of Exchange accepted by customers in respect of amounts due from them. The bills receivable book is used to record all promissory notes given or Bills of Exchange accepted by customers • Simple format of Bill Receivable Book is given below: • BIILS RECEIVABLE BOOK OF XYZ LTD S.N o. Dat e Fro Acc Dat m epto e of who r bill m rece ived Ter m Dat LF e of mat urity Wh Amt Ho ere w pay disp able ose d

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BILLS PAYABLE BOOK • The Bills Payable consists of all Promissory Notes given or Bills of Exchange accepted by the business in respect of amounts owing to its suppliers. The Bills Payable Book is used to record all such Promissory Notes given or Bills of Exchange accepted by the business. • Simple format of Bill Payable Book is given below: BIILS RECEIVABLE BOOK OF XYZ LTD S.N o. Date Nam Pay Acce e of ee pted draw er Date Term Date LF of of bill matu rity Whe Amt re paya ble Rem arks

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JOURNAL PROPER • This book is used to record all transactions which cannot be included in the Cashbook or any of the other six subsidiary books discussed so far. The transactions that will be recorded in journal proper are, purchase or sale of fixed assets and investments on credit, adjusting entries, rectification entries, etc. Format Given below: JOURNAL PROPER OF XYZ LTD Date Particulars LF Debit Amt Credit Amt

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• We will now take up the transactions of a business during a month and study how they will be recorded in the various subsidiary books of accounts: • ILLUSTRATION: Date 1 2 3 4 5 6 Transactions Commenced business with cash Purchased goods on credit from Shyam Purchased goods for cash Paid Gopalan an advance for goods ordered Received cash from Murthy as advance for goods ordered by him Purchased furniture for office use for cash Rs. 40,000 30,000 1,000 2,000 3,000 2,000

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Continue…… 7 Paid wages 500

8
9 10 11 13 15

Received commission (in cash)
Goods returned to Shyam Goods sold to Kamal Paid for postage and telegrams Goods returned by Kamal Paid for stationery

600
200 10,000 200 500 200

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Continue…… 18 20 22 25 28 31 Paid into bank Goods sold for cash Bought goods for cash Paid salaries Paid rent Drew cash for personal use 500 750 1,000 700 500 1,000

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Dr. Date Receipts L Cash F Rs

Solution
Ban Date k Rs 2001 Jan. 3 Jan. 4 3,000 600 Jan. 6 Jan. 7 Payment s By Purchase s a/c By Gopalan a/c By Furniture a/c By Wages a/c

Cr. L Cash Bank F Rs Rs 1,000

2001 Jan. 1 Jan. 5 Jan. 8

To Capital a/c To Murthy a/c To Commiss ion a/c

40,00 0

2,000

2,000 500

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Dr. Date

Solution
Receipts L Cash Ban Date F Rs k Rs
To cash To sales a/c C 750 500 Jan.11 Jan.15 Jan,18 Jan.22 Jan,25

Cr. Payments L Cas Ban F h Rs k Rs
200 200 500 1,000 C 700

Jan.18 Jan.20

By Postage & Telegrams a/c By Stationery a/c By Bank a/c By Purchases a/c By Salaries a/c

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Date

Rec L Cash eipt F Rs s

Ban k Rs

Date

Payments

L Cash F Rs 500 1,000

Ban k Rs

Jan.28 By Rent Jan.31 a/c Jan.31 By Drawings a/c By Balance c/d 44350 500

34,750 44350

500 500

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• Purchases Book
Date Name of supplier LF Inward Amount invoice no Rs

2001 Jan 2

Shyam

30,000
30,000

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Purchases Returns Book

Date

Name of supplier

LF

Debit Note no

Amount Rs
200

2001 Jan 9

Shyam

200

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Sales Book
Date Name of Customer LF Outward Invoive No Amount Rs

2001 Jan 10

Kamal

10000 10000

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Sales Returns Book
Date Name of Customer LF Credit Note No Amount Rs

2001 Jan 13

Kamal

500 500

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Problem
• Enter the following transactions in three column cash book of m/s Barket & Co. April 1Cash on hand RS 237, Balance at bank Rs 6594. April 2 Received from K Agrawal cash Rs 590, allowed him discount Rs 10. April 4 Paid salaries for March by cash RS 200, cash sales Rs 134 April 5 Paid B.K. Bose by cheque Rs 300. cash purchase Rs 60 April 7 Paid Q Ahmed by cheque Rs 585, discount received 2.5% April 8 Cash sales Rs 112. Paid cartage & coolie Rs 6 April 10 Paid rent in cash Rs 50 April 14 Cash sales Rs 212. Received from G.C. Dhar Rs 194 by cheque discount 3% April 16 Deposited into bank Rs 600. Purchases a motor car for 5800 & drawn a cheque for the amount

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Continued….
April 23 Received a cheque from Robert & Co for Rs 291. discount received 3% April 28 Cash sales Rs 298 April 29 Bank notifies that robert & Co cheque has been dishonored April 30 Deposited with bank RS 300. Paid wages Rs 72. Bank charges as shown in pass book Rs 5

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Dr. Dat e
1.4 2.4

Solution Particul ars L Dis. Cash F Rs
237
10 590 134 112 212

Cr. L Dis. Cas Ba F h nk Rs Rs
200
300 15 6 585

Bank Dat partic Rs e ulars
6594 4.4 By salary 5.4 By B.K. Bros 7.4 By Q Ahmed 8.4 By Cartag e 10.4 By rent

To bal b/d To agrawal 4.4 a/c To sales 8.4 a/c To sales a/c 14.4 To Sales a/c
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50

Dr. Dat e Particul ars

Solution L Dis. Cash F Rs
6 C

Cr. Bank Dat partic Rs e ulars
194 600 291 16.4 By bank 16.4 By motor car By 29.4 robert & co 30.4 By bank 30.4 By wages

L Dis. Cas Ba F h nk Rs Rs
C 600 580 0 9 C 300 70 291

14.4 To G.S. Dhar 16.4 To cash 23.4 To robert & co 28.4 To sales 30.4 To cash

9
298 C

300

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Dr. Dat e Particul ars

Solution L Dis. Cash F Rs Bank Dat partic Rs e ulars
30.4 By bank bank charge s 30.4 By bal c/d

Cr. L Dis. Cas Ba F h nk Rs Rs
5

295 *24 158 3

998 797 9

*25
1.5 To bal b/d 295

1583
998

7979

* Posted to discount account in ledger.
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Problem on sales day book
• From the transactions given below prepare sales book of Amin Chand, a furniture dealer: June 5 Sold on credit to ideal college (10 tables @ Rs 25 10 chairs @ Rs 15) Less 10% June 8 Sold Mohan Bros 5 stools @ Rs 10 June 10 Sold on credit M/S Golchand & Co 3 tables @ 75 5 chairs @30 June 20 Sold to M/s Ram Lal & Sons for cash 5 tables @40 June 27 Sold on credit to Anand Pal & Co old typewriter for Rs 400

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Solution Sales Book of Amin Chand
Date Name of Customer L Outw F ard
Invoi ce No

Amount Details

Total Amount Rs

5.6

8.6 10.6

Ideal College (Table 10*25 Chairs 10*15) Less 10% trade discount Stool 5 @10 Tables 3@75

250 150 40 50 225

360 50 225 785

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Problem on Purchase Day Book
• From the following transactions prepare the purchase book of Admas fro July 1998 July 1 Purchased on credit from Paul & Co: 50 Electric Irons @25, 10 Toasters @ RS 30 July 6 Purchased for cash from John & Bros: 25 Table Lamps @15 July 10 Purchased from Harsh & Sons on credit :20 Electric Stoves @20, 10 heaters @30 July 16 Purchased on cerdit from More & Co: 15 Heaters @20 July 20 purchased on credit on etypewriter from Remington and fro Rs 15oo

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Dr.
Date

Purchase Book of Admas
Name of supplier L Inward F Invoice
no

Cr

.

Amount

Total Amount Rs

1.7

10.7

16.7

Paul & Co Electric iron 50* 25 Toaster 10 *30 Harsh & Sons Electric Stove 20*20 Heater10*30 More & Co Heater 15*20

1250 300 400 300 300

1550

700 300 2550

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True or False
1. Purchase book records all purchase of goods. 2. Discount account should be balanced in the cashbook 3 Sales book records credit sales only. 4. Bank overdraft is a debit balance of cash book (bank column) 5.The sales day book is a part of ledger

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MULTIPLE CHOICE QUESTIONS
Q1 RS Ltd., makes purchases on credit. If the purchases are not as per the specifications, the company returns them to the suppliers. The book, that is used to record such returns is • (a) Returns inward book • (b) Returns outward book • (c) Cash book • (d) Journal proper • (e) Purchases day book. Q2 Which of the following is false? A Journal Proper is used to record • (a) All transactions which cannot be included in cash book • (b) All transactions which cannot be recorded in any of the seven subsidiary books • (c) Transactions involving payment of petty expenses • (d) Purchase or sale of fixed assets, investments etc. on credit, adjusting entries, rectification entries • etc. • (e) All closing entries.
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Q3 Which of the following is true? • (a) Purchase book is an example of journal proper • (b) All losses and expenses are credited • (c) Purchase journal is used for recording cash purchases • (d) The purchase of machinery on credit is recorded in journal proper • (e) Sales journal is also called day book. Q4 Cash Book is an example of: (a) Special Journal (b) General Journal (c) Both of Them (d) None of them

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Q5 If the bearer cheque is encashed over the counter: (a) Cash account is debited (b) Bank account is debited (c) None of these Q6 Cash is a: (a) Fixed asset (b) Fictitious asset (c) Current asset

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Answers of true/false 1. false 2. false 3. True 4. false 5. false Answers of Multiple Choice Questions: Q1 (b) Q2 (c) Q3 (d) Q4 (a) Q5 (c) Q6 (c)

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Thank You
Please forward your query To: tagarwal@amity.edu CC: manoj.amity@panafnet.com

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