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BOBSON PUBLIC SCHOOL

Worksheet:1.4
Journal continue
Opening Entry: The entries which are made to open new set of books in the
beginning of the new accounting year is called as opening entries. The balances
of Assets and liabilities of the previous year balance sheet are to be transferred
to the next year as opening balances. The entries to record set opening balance
of Assets and liabilities and Capital Asset as opening entries where assets
accounts are debited and liabilities accounts are credited the difference
between total assets value and total liabilities value is known as NET business
value which is to be credited to capital account.

Closing Entry: A closing entry is a journal entry made at the end

of accounting periods that involves shifting data from temporary accounts on
the income statement to permanent accounts on the balance sheet. Temporary
accounts include revenue, expenses, and dividends and must be closed at the
end of the accounting year.

The purpose of the closing entry is to reset the temporary account balances to zero on
the general ledger, the record-keeping system for a company's financial data.

Temporary accounts are used to record accounting activity during a specific period.
All revenue and expense accounts must end with a $0 balance because they are
reported in defined periods and are not carried over into the future. For example,
Rs.10000 in revenue this year does not count as Rs.10000 of revenue for next year,
even if the company retained the funds for use in the next 12 months.

Permanent accounts, on the other hand, track activities that extend beyond the
current accounting period. They are housed on the balance sheet, a section
of financial statements that gives investors an indication of a company’s value,
including what assets and liabilities it has.

Compound Entry or Combined Entry: A compound journal entry is an

accounting entry which effects more than 2 accounts.

-A simple journal entry has one debit and credit whereas a compound entry
includes one or more debits & /or credits than a simple journal entry.

Shivam Mishra
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-A compound journal may combine 2 or more debits and a credit,or a credit

&2 or credits or 2 or more of both debits and credits.

-Also compound entry is simply a combination of 2 or more simple journal

entries .but instead of recording numerous simple journal is that better to
record journal entries of simple accounting event as a compound entry.

Q.1 Journalise the following transaction in the books of Ram. Post them in the
ledger and balanced the various accounts opened in the ledger.

April-2 Ram started his business with Cash Rs. 70000.

April-3 Deposited in to Bank Rs. 50000.

April-4 Purchased goods for cash from Mr. X Rs. 5000.

April-5 Bought goods on credit from Mr. Y Rs. 6000.

April-6 Returned goods to Mr. Y Rs. 1000.

April 10 Sold goods for cash to Mr. A Rs. 6000.

April-15 Sold goods to Mr. B Rs. 6000.

April-16 Mr. B returns goods Rs. 1000.

April-17 Drew from Bank for personal use Rs. 5000.

April-25 Paid to Mr. Y in full Settlement by Cheque Rs. 4800.

April-26 Received a cheque from Mr. B in full settlement Rs. 4900.

April-27 Draw cash from bank for office use Rs. 10000.

April-30 Draw cash for personal purpose Rs. 5000.

April-30 Paid salary to staff Rs. 5000.

April-30 Issued a cheque for Rs. 3000 in favour of Shri Devi a landlady towards rent for April.

April-30 Withdraw goods for personal use Rs. 1000.

Shivam Mishra
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Q.2 Prepare Journal Entries

Business started with cash in Hand Rs. 5,00,000, Nabil Bank Balance Rs. 40,0000, Citizen Bank
Balance Rs. 1,00,000 And Loan From Nepal Rastra Bank Rs. 2,00,000.

1. Goods purchased from Ganesh Traders of Rs. 30,000 on Credit.

2. Goods Sold to Him star Enterprises Pvt. Ltd. Of Rs. 30,000 & Cash received Rs. 16,000.

3. Electricity Charges Paid at the end of April 1st month Rs. 4,000 & Telephone Charges Rs.
2,500 on the same date.

4. Plant & Machinery purchased from Ramesh Agro & Sales Co. of Rs. 2, 50,000 & Made partial
Payment of Cash Rs. 1, 00,000.

5. Furniture purchase on Cash Rs. 20,000.

6. Interest on Investment money was collected Rs.2800 & Paid in to Nabil Bank by Cheque No.
1285.

7. A cheque of Rs. 1700 as commission provided to us by an Agent for providing him services of
solution for technology.

8. Nabil Bank charges the Amount of Interest Rs. 20,000.

9. Furniture Purchase for Rs. 20,000.

10. Depreciation charge on Plant & machinery Rs. 8000 during the year.

11. Furniture Purchase for Rs. 20,000 was depreciated @ 10% per annum.

12. Salary due was recorded Rs. 35,000 during the end of year.

13. Cash paid for the travelling expenses Rs. 2000.

14. Cash paid for Audit fee Rs. 20,000.

15. Cash paid for rent Rs. 15,000.

16. Cash paid for salary Rs. 80,000.

17. Cash paid for goods purchased on cash Rs. 3, 00,000.

18. Interest received Rs. 2500.

19. Cash sales made of Rs. 4, 00,000

Shivam Mishra
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Q.3 Enter the following transaction in to journal and post in to ledger:

Jan-1 Assets are cash in hand Rs.22, Bank Rs.38, Plant & Machinery Rs.5, Furniture &
Fixture Rs.99 and liability are Mr.Rs.2000, capital Rs.10000.

Jan-2 Sold goods by cash to Ram Rs.100

Jan-3 Sold goods to shyam Rs.200

Jan-4 Goods return by Shyam Rs.14

Jan-5 carriage outward paid Rs.50

Jan-6 Carriage in ward paid Rs.100

Jan-7 Cheque paid to Mr. Rs 1980 in full settlement of his Account.

Jan-8 Sold goods by cash Rs.80, Paid telephone bill Rs.500, purchased goods from Mr. Y
Rs.20

Q.4 Prepare the Journal Entries:

1. Mr. A starts business by introducing capital of Rs.2000000 in Cash.

2. Mr. A deposited 1500000 in to the Bank.

3. Mr. A purchased would & other necessary material of Rs.800000 by making payment
by cheque.

4. Mr. A purchased wood cutting machine of Rs.300000 by making payment in cash.

5. Mr. A purchased furniture for resale of Rs.500000 from m/s furniture suppliers in
credit.

6. Mr. A Purchased furniture for Own (Business) use of Rs. 100000 by making payment
by cheque.

7. Mr. A sold furniture of Rs.800000 in cash.

8. Mr. A sold furniture of Rs. 400000 to Mr. B in credit.

9. Mr. B returns furniture worth Rs.200000

10. Mr. A pay rent of Rs. 50000 in cash.

11. Mr. A paid wages for the labor of rs.80000 in Cash.

Shivam Mishra