Illustration 1: We shall consider five transactions and show how

they are accounted for in the books of the business.

1. Mr. Abhi brings Rs.1,00,000 cash as capital into his business
2. He purchases furniture to his shop for Rs. 10,000
3. He buys goods for cash Rs. 50,000
4. He sells goods worth Rs. 30,000 for Rs. 40,000 on credit to
Arjun
5. He pays wages to servants Rs.1,000

Illustration 2:

SI Transction Amount
1 Commenced business and introduced cash 4,00,000.00
2 Goods purchased for cash 50,000.00
3 Goods purchased from Abdul 1,35,000.00
4 Freight charges paid on purchase 1,500.00
5 Computer purchased cash 35,000.00
6 Freight charges paid on purchase of computer 500.00
7 Sales made to Mr Ram 2,00,000.00
8 Rent paid 12,000.00
9 Salary paid 15,000.00
10 Cash Recevied from Mr Ram 1,50,000.00
11 Cash deposited into bank 75,000.00
12 Office Expense paid 25,000.00