FA-1 / FA-2 / FFA (F3) Financial Accounting

by Syed Munib

CHAPTER # 3 - BOOKS OF PRIME ENTRY

Books of Prime Entry are the books in which we first record transactions. These are not
accounts; they are simply books that records the details of a transactions, almost like a diary.
The firm will have a separate book for each kind of transaction. The type of the transaction will
affect which book it, is entered into. Sales will be entered in one book, purchases in another
book, cash in another book, and so on. The books of prime entry are used to record the
following:
 The date on which each transaction took place - the transactions should be shown in date
order;
 Details relating to the transactions are entered in a 'details' column; e.g. name of
customer/supplier
 A folio column entry is made cross-referencing back to the original 'source document',
e.g. the invoice;
 The monetary amounts are entered in columns included in the books of original entry for
that purpose.

Advantages of keeping books of original entry:

 Initially recording all transactions in the book of Prime Entry rather than in the General
Ledger reduces the chance of the main accounts becoming cluttered and errors being
made.
 Accounts can be found more easily by the use of the cross-referencing nature of the
books of original entry being kept.
 If records are lost then the ledgers and the books of original entry acts as a backup for
each other.
 Acts as a 'listing device' for posting totals to various accounts, thereby saving labor.

The commonly used books of original entry together with source document it used to record
transactions are:

TYPE OF TRANSACTION BOOK OF ENTRY

Credit sales of merchandise Sales journal / Sales day book
Credit purchases of merchandise Purchase journal / Purchase day book
Return inwards from credit customer Return inward journal
Return outward to credit suppliers Return outward journal
Cash and bank transactions Cash book
Cash receipts only Cash receipt journal
Cash payments only Cash payment journal
Minor cash payments Petty cash book
Other transactions, adjustment and corrections General journal

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A. Cash Book:
Deals with both credit and debit transactions using cash i.e. cash receipts and cash payment.
These transactions are totaled on a regular basis to be posted to the ledger, either directly or
through the journal. Types of cash books are:
1. A single column cash book (with only cash column)
2. A two-column cash book (with cash and bank column)
3. A three-column cash book (with cash, bank and discount column)

 If a cashbook is maintained then accounts for the cash and bank balances are also
maintained in general ledger
 Transaction related to accounts receivables and accounts payable are posted to the
respective personal account in the subsidiary ledger
 The total of discount allowed and discount received are posted to discounts, account
receivable control and account payable control account at the end of each month
 The totals of receipts from customers and payment to supplier are posted to the
account receivable control and accounts payables control accounts at the month end
 All others transactions are posted in the usual manner on continuous basis

B. Petty Cash Book:

In almost all businesses, it is found necessary to keep small sums of ready money with the
cashier or petty cashier for the purpose of meeting small expenses such as postage,
telegrams, stationary and office sundries etc. The sum of money so kept in hand generally
termed as petty cash and book in which the petty cash expenditures are recorded is termed
as petty cash book.
➢ Imprest System of Petty Cash
Under this method, a certain sum is advanced to the Petty Cashier for a particular
period, say a month, in order to meet different petty expenses for the month. At the end
of the month, the amount actually spend is reimbursed by the Head Cashier to the petty
Cashier, to restore the sum advanced.

 None of the amount from petty cash book is posted to the general ledger
 However petty cash book is the basis for recording of transactions by Head Cashier
general journal

C. Sales Journal / Sale Day Book:

Sale journal is a book of original entry or day book. Sale invoices are recorded in this book in
the sequence of dates so that a complete record of credit sales in kept. Sales journal helps in
posting the credit sales entries in personal accounts of customers in sales ledger.
 In sales journal only the sale of goods on credit basis is recorded.
 The sale of goods on cash basis is recorded in cash book, not in sales journal
 The sale of fixed assets, for example the sale of fixtures are not recorded in sale journal
 Credit sales in sales journal is always recorded net of trade discount.

D. Purchases Journal / Purchase Day Book:

Purchases journal is a book of original entry or day book. Purchase invoices are recorded in
this book in the sequence of dates so that a complete record of credit purchases is kept.
 Purchases journal helps in posting the credit purchases entries in personal accounts of suppliers in
the purchases ledger.
 In purchases journal only the purchase of goods on credit basis are recorded.
 The purchase of goods on cash basis is recorded in cash book not in purchase journal.

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  The purchase of fixed assets for example the purchase of fixtures on credit is not recorded in the
purchase journal.
 Credit purchases are always recorded net of trade discount in purchases journal.

E. Return Inward Journal: (Sales Return)

Return inward journal is a book of original entry or day book. Credit notes issued are entered
in this book in the sequence of dates, so that a complete record of return inwards is kept.
Return inward journal helps in posting the sales returns entries in personal accounts
customers in the sales ledger.

F. Return Outward Journal: (Purchase Return)

Return outward journal is a book of original entry or day book Credit notes received a recorded
in this book in the sequence of dates, so that a complete record of Return outwards is kept.
Return outward journal helps in posting the purchases returns entries in personal accounts of
suppliers in the purchases ledger.

 Each individual transaction in these journals is posted to the relevant account in

subsidiary ledger.
 At the end of each month totals of these journals is posted to following a/c in general
ledger
1) Sales
2) Purchases
3) Return Inward
4) Return Outward
5) Accounts Receivable control
6) Accounts Payable control

G. General Journal:
Double effect of each transaction posted to respective accounts in general and subsidiary
ledger on continuous basis.

SOURCE DOCUMENTS:

To show that the business transaction has taken place, there must be documentary proof. This
proof is known as source document. Once a transaction has taken place, the accountant uses
the source document to record the transaction in the books of the business.

a) Sale invoice
When a business sells goods on credit basis it sends a document to buying firm showing
full details of goods sold and their prices. This document is known as sales invoice the
firm keeps one copy of this invoice to enter up in sales journal.

b) Purchase invoice
When a business buys goods on credit basis it receives a documents form-selling firm
showing full details of goods received and their prices. this document is known as
purchase invoice. The buyer firm enters up the details of purchases from this document
in purchases journal.

c) Credit note
A document sent by a business to its customers on receiving back the defective goods
previously sold on credit basis, or giving an allowance for unsatisfactory goods. This
document is also used to correct the account for an over-charge or increase in Trade
Discount.
A credit Note issued by a business is recorded in Return inwards journal
A credit Note received by a business is recorded in Return outwards journal

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d) Debit note
A document sent by a customer to its suppler on returning the defective hoods,
previously sold on credit basis, or claiming an allowance for unsatisfactory goods.
Also, it is a document sent by a business to its customer for correction of
an under- charge or decrease in Trade Discount.
A debt Note is also used to charge interest on overdue accounts. In this
case, it is recorded in General Journal.

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 1.0
CASHBOOK

Question 1.01:

Following are some of the transactions of Hameed & Sons for the month of November 2007.

1. Cash balance Rs. 35,000

1. Bank balance (Debit) Rs. 34,500
3. Issued cheques to Sajan Rs. 2,100
5. Paid cash on salary Rs. 2,000
7. Received cash from Karim Rs. 5,700
9. Sold merchandise on cash Rs. 8,600
13. Purchased furniture paid by cash Rs. 2,700..
14. Cheques issued to Saqib Rs. 4,300.
17. Counter Sales Rs. 14,500 (including a cheque of Rs. 7,450)
19. Deposited cash into bank Rs. 17,040.
21. Withdrew cash from bank for personal use Rs. 1,100.
23. Paid commission expenses Rs. 380 by cheques.
24. Purchased supplies and paid by cash Rs. 2,147.
25. Received cheques from Noor Rs. 9,500 in full settlement of his account Rs.9,600.
26. Paid cash Rs. 2,350 and cheques Rs. 1,250 to Waseem in full settlement of his account Rs. 3,720.
27. Cash sales Rs. 1,750.
28. Paid for transportation Rs. 470
29. Paid for merchandise purchased Rs. 2,140 and also paid for wages expenses Rs.1,420
30. Withdrew cash from bank for office use Rs. 3,000

Required:
Prepare 3 column cash book and accounts of discounts

Question 1.02:
Following are the transaction of Zia & Brothers for the month of June 2009
1. Cash in hand Rs. 20,000 and cash at bank Rs. 70,000
2. Received cash from services rendered Rs. 2,400, cash deposited into bank.
3. Sold merchandise Rs. 5,000 received by cheques
4. Purchased merchandise Rs. 2,500 paid by cheques and Rs. 3,000 by cash.
5. Cash deposited into bank Rs. 3,000
6. Received cheques of Rs. 2,850 from Ghazali in full settlement of his account 3,200
7. Counter sales Rs. 30,000 (including 2 cheques of Rs. 18,000)
8. Purchased supplies and paid by cheques Rs. 500
9. Received cheques Rs. 5,000 and cash Rs. 3,500 from Zeeshan in full settlement of his account Rs.
9,200
10. Issued cheques of Rs. 6,200 and cash Rs. 3,400 to Ali in full settlement of his account Rs. 10,000
11. Received cash for commission Rs. 3,500 out of which Rs. 1,500 deposited into bank
12. Withdrew cash from bank for personal use Rs. 1,400 and for office use Rs. 4,000
Required:
a) Enter the opening balance and record the above transaction in cash book
b) Balance the cash book on June 30, 2009 bringing down the cash and bank balances on July 1, 2009

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Question 1.03:

Following are transaction of Yousuf & Brothers for the month of July 2012.
1. Balance brought forward cash Rs. 97 Bank Rs. 2,186
2. The following paid us by cheque in each case deduction a 5% cash discount: R Harris Rs. 1,000; C
White Rs. 280; P Peers Rs. 180; O Hardy Rs. 600
3. Cash sales paid direct into the bank Rs. 134
4. Sold merchandise on cash Rs. 8,000 and on credit to Zia Rs. 6,500
5. Received rent in advance for 6 months per month Rs. 1,000
6. Received cheque for Rs. 1,800 from Naeem
7. Zia returned merchandise Rs. 300 and received from him a cheque of Rs. 5,700 in full settlement of
his account
8. Paid advertisement by cash Rs. 1,500 and commission by cheque Rs. 1,200
9. Withdrew cash and merchandise Rs. 2,000 and Rs. 500 respectively
10. Namee’s cheque was returned dishonored by bank
11. Paid to Rashid Rs. 5,000 less 2% discount by cheque in full settlement of his account
12. Received a cheque from Fareed in full settlement of Rs. 10,000 less 2% discount
13. Proprietor withdrew cash Rs. 7,000 from bank for payment of his residential house rent
14. Cash was found short Rs. 150 (Debit Miscellaneous expense)

Required:
Enter the following in three-column cash book. Balance off the cash book at the end of the month

Question 1.04:

Mr.X operates two bank accounts both of which are maintained in the Columnar Cash Book itself. You
are required to draw up a Cash Book with necessary columns and show how the following transactions
relating to 28th Febraury,1998 will appear there in the close the Cash Book for the day

1) Opening balances Rs.

Cash 150
National Bank 11,240
Overseas Bank 35,460
2) Received a cheque for Rs.1,250 in respect of sales for realizing which the National charged
Rs.2 and credited the balance.
3) Purchased goods for Rs. 13,210 and a cheque issued on the Overseas Bank. The Bank
charged Rs. 3 for collection of the cheque to concerned party.
4) Paid office expenses of Rs . 45 and Rs. 15 for stationary.
5) Out of cash sales of Rs. 13,625 a sum of Rs . 10,000 was deposited in the National Bank.
6) Credit purchases of Rs. 15,000 were made from Mr.Smith, who sent the documents relating
to the good through the Overseas Bank for 90% of their value. The Bank charged Rs. 115 for
realizing the documents
7) Withdrew Rs. 5,000 from the Overseas Bank.
8) Deposited Rs. 5,000 in National Bank.
9) A Bill Receivable for Rs. 10,000 was discounted with the Overseas Bank which charged 1%
towards discounting.
10)A Demand Draft was purchased for Rs. 3,000 from the bank after paying Rs.2 towards their
charges and paid to the Electric Supply Corporation as deposit.
11) Interest of Rs. 122 and Rs. 50 was credited and debited, respectively, by the Overseas Bank and
National Bank.

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 12) An amount of Rs. 1,500 was withdrawn from the Overseas Bank and salaries paid to that
extent.
13) Manager’s salary of Rs. 1,000 was paid by cheque drawn on the National Bank.
14) Overseas Bank collected dividends of Rs. 1,250 and sent credit note.
15) An amount of Rs. 1,500 was transferred from the Overseas Bank to the National Bank.

Required:
Enter the following in cash book. Balance off the cash book at the end of the month

Question 1.05:

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PETTY CASHBOOK
Question 1:
The following is summary of the petty cash transactions of Jack Field Ltd. May 2011.

1. Received from cashier Rs 300 as petty cash float

2. Postages 18
3. Travelling 12
4. Cleaning 15
5. Petrol for delivery van 22
6. Travelling 25
7. Stationery 17
8. Cleaning 18
9. Postage 5
10. Travelling 8
11. Stationery 9
12. Cleaning 23
13. Postage 13
14. Delivery van 5,000 mile service 43
15. Petrol 18
16. Cleaning 21
17. Postage 5
18. Petrol 14

Required:
Rule up a suitable petty cash book with analysis columns for expenditure on clearing motors
expenses, postage, stationery, travelling

Question 2:
Following are transactions on March 31st.
1. A cheque received from the accountant for petty payment Rs. 1,900
2. Paid rickshaw fare Rs. 30
3. Paid for bus fare Rs. 45
4. Paid for entertainment Rs. 25
5. Paid for postage stamp Rs. 10
6. Paid transporting Rs. 25
7. Paid for taxi fare Rs. 40
8. Paid for telegram Rs. 45
9. Paid for paper, Ink etc. Rs. 75
10. Paid for V.P.P. (Value Payable Post) Rs. 60
11. Paid for repair of furniture RS. 80
12. Paid for rickshaw fare Rs. 60
13. Paid for Rubber stamp Rs. 10
14. Paid for entertainment Rs. 50
Required:
a) Prepare petty cash book under imprest system with analysis column for expenditure on
Entertainment, Postage, Transportation, Travelling, Stationery and Sundry. Balance the petty
cash book on March 1, 2006
b) Pass the journal entries
✓ Establishment of Petty Cash Fund
✓ For Expenditure of Petty Cash Fund
✓ For Replenishment of Petty Cash Fund

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Question 3:
Mr. Khan maintains Petty cash on imprest system. On March 31, 2006 the petty cashier reported the
balance of 250 and presented voucher for the amount of Rs. 1,250. The amount was replenished and
a cheque was issued. The cheque was cashed and the following payments were made during the
month of April 2006
1. Paid for bus fare Rs. 15
2. Paid for postage stamp Rs. 20
3. Paid for transportation Rs. 75
4. Paid for repair of computer Rs 50
5. Paid for taxi fare Rs. 30
6. Paid for advance to clerk Rs. 200
7. Paid for ribbons Rs. 15
8. Paid for carbon papers Rs. 10
9. Paid for tea, pan Rs. 65
10. Paid for electric bill Rs. 150
11. Paid for local train Rs. 10
12. Paid for electrician Rs. 100
13. Paid for came cart Rs. 25
14. Paid for gums pins and papers Rs. 20
15. Paid for unpaid bill for repair of typewriter Rs. 40
Required:
a) Record the above transactions in the petty cash book with analysis columns for expenditure
on travelling, postage, transportation, entertainment and sundry
b) Balance the Petty Cash Book, on March 31, 2006 and enter the amount reimbursed on April 1,
2006
c) Give entries in general journal for establishment of the Fund, payment made out of petty cash
and replenishment of the Fund on April 1, 2006

Question 4:
The Following is a summary of the petty cash transactions of J Brown for September 2011.
1. The head teacher gives Rs. 300 as float to the petty cashier payments out of petty cash during
September.
2. Petrol school bus Rs. 16
3. J Green – travelling expenses of staff Rs. 23
4. Postages Rs. 12
5. D Davies – Travelling expenses of Rs. 32
6. Cleaning expenses Rs. 11
7. Petrol: school bus Rs. 21
8. K Jones – travelling expenses of staff Rs. 13
9. Petrol Scholl bus Rs. 23
10. L Black – travelling expenses of staff Rs. 5
11. Cleaning expenses Rs. 11
12. Petrol School Bus Rs. 22
13. Postages Rs. 12
14. Cleaning expenses Rs. 11
15. G Wood – Travelling expenses of staff Rs. 7
16. Settlement of C Brown’s account in the Purchase Ledger Rs. 13
17. Postages Rs. 12
18. The head teacher reimburses the petty cashier the amount spend in the month
Required:
Rule up a suitable petty cash book with analysis columns for petrol, travelling,
postages, cleaning and sundry.

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Question 5:

Question 6:

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 2.0

SPECIAL JOURNALS

Question 1:
Following are some transactions of the BCCI traders for the month of May 2013
1. Credit sales: Shakib Rs. 560; Ashraful 1,480
3. Credit purchases: Sehwag Rs. 1,440; Tendulkar Rs 250
7. Credit sales: Tamim Rs 890; Ashraful Rs. 780; Shakib Rs. 1,257
9. Credit purchases: Dhone Rs. 240; Tendulkar Rs. 580; Sehwat Rs. 1,230
11. Goods return by us to: Tendulkar Rs. 120; Sehwag Rs. 220
14. Goods return to us by: Tamim Rs. 500; Shakib Rs. 140
17. Credit purchases; Dhoni Rs. 540; Tendulkar Rs. 750
20. Goods returned by us to Dhoni Rs 190
24. Credit Sales: Ashraful Rs. 570; Shakib Rs. 650; Tamim Rs. 1,120
28. Goods returned to us by Tamim Rs. 240; Ashraful Rs. 310
31. Credit purchase: Sehwag Rs. 550
Required
a) Enters the transactions in sales, purchases and the returns inwards and return outwards
journals.
b) Post the items to the relevant accounts in the accounts receivable and accounts payable
subsidiary ledgers.
c) The total of the journals are then to be transferred so the accounts in the general ledger.

Question 2:
Following are the transactions of Younis Associates:
1. Purchased merchandise on cash Rs. 15,000
2. Purchased merchandise on credit from Ghani Rs. 14,000
3. Purchased merchandise on credit from Areej Rs. 6,500
4. Purchased equipment on account from Aslam Rs. 3,000
5. Sold merchandise on cash Rs. 1,000
6. Merchandise returned to Areej Rs. 100
7. Purchased merchandise on account from Kayoom Rs. 1,500
8. Returned merchandise to kayoom Rs. 150
9. Purchased furniture on cash Rs. 4,600
10. Purchased merchandise on account from Naeem Rs. 7,900
11. Returned merchandise to Naeem Rs. 400
12. Purchased merchandise on credit from Sarfaraz Rs. 6,000
13. Returned merchandise to Sarfaraz Rs. 310
14. Sold merchandise on account to Fahim Rs. 9,800
15. Sold equipment on cash Rs. 23,000 and furniture on credit to Bashir Rs. 3,500
16. Merchandise was returned by Fahim Rs. 290
17. Sold merchandise on cash Rs. 4,000
18. Sold Merchandise on account to Asad Rs. 15,000
19. Merchandise was returned by Asad Rs. 650
Required:
Prepare relevant journals
Question 3:
Following are the transactions of Ghani’s business during February 2006
1. Purchased merchandise on account from Nabeel Rs. 5,000
5. Purchased merchandise on credit from Jamal Rs. 4,800
7. Purchased equipment on account from Zaheer Rs. 15,000
14. Purchased furniture on cash Rs. 11,000
18. Merchandise returned on Nabeel Rs. 200
21. Merchandise purchased on account from Akram Rs. 11,000
24. Merchandise returned to Akram Rs. 2,500
26. Purchased goods on cash Rs. 2000
26. Machinery was purchased on account from Haji Rs. 20,000
28. Bought merchandise on credit from Zaheer Rs. 6,000
28. Merchandise returned to Zaheer Rs. 320

Required:
a) Record above transaction in:
✓ Purchases journal
✓ Purchases Return and allowance journal
✓ General journal
b) Prepare subsidiary ledgers of each supplier

Question 4:
Following transaction were taken from book of Fahim traders during the month of June 2006.
1. Sold merchandise on account to Karim for Rs. 2,650
7. Sold merchandise on Jamil on account Rs. 6,000
11. Merchandise were sold on cash Rs. 8,500
15. Sold merchandise on account Khalid stores Rs. 7,800
19. Sold equipment on cash Rs. 1,000
21. Merchandise were returned from Karim Rs. 200
22. Sold merchandise to Hakim Rs. 14,500
23. Sold merchandise on cash Rs. 4,700
29. Khalid returned merchandise Rs. 1,450
30. Merchandise were returned from Hakim Rs. 550
Required:
a) Record above transaction in:
✓ Sale journal
✓ Sale Return and allowance journal
✓ General journal
b) Set up account receivable and sales in general ledger
c) Prepare account receivable for each customer in subsidiary ledgers

Question 5:
Following are the transactions of Agha Traders for the month of May 2006
1. Purchased merchandise from Faraz Sons Rs. 4,200
4. Purchased equipment on credit from Muslim Broth: Rs. 15,000
7. Purchased merchandise from Aslam on cash Rs. 12,000
11. Merchandise returned to Fazal Sons Rs. 350
18. Purchased merchandise from Naveed Rs. 6,000 under credit term of 3/15, n/45.
22. Purchased office suppliers on credit from Ahsan Rs. 1,500
25. Credit purchase of merchandise from Hameed Rs. 20,000 at 15% discount
28. Purchases return to Naveed Rs. 220
31. Purchases return to Hameed Rs. 300
Required:
a) Record the transaction listed above in relevant journals
b) Post the total purchase and account payable in the general ledger
Question 6:
Following are the transaction of Younis Associates
1. Purchased machinery on account from Najeeb Rs. 11,000
2. Sold Merchandise on cash Rs. 15,000
3. Purchased merchandise on account from Adil Rs. 23,000
4. Return merchandise to Adil Rs. 270
5. Purchased merchandise on cash Rs. 13,500
6. Purchased merchandise on credit from Zaheer Rs. 2,000
7. Purchased merchandise on credit from Nida Rs. 3,800
8. Merchandise return to Nida Rs. 140
9. Sold furniture on credit to Jameela Rs. 15,000
10. Sold merchandise on cash Rs. 6,000
11. Sold merchandise on account to Nazia Rs. 8,700
12. Merchandise was returned by Nazia Rs. 200
13. Purchased furniture on cash Rs. 3,200
14. Purchased merchandise on account from Zaheer Rs. 9,700
15. Return merchandise to Zaheer Rs. 190
16. Purchased merchandise on credit from Safi Rs. 9,000
17. Returned merchandise to Saifi Rs. 150
18. Sold merchandise on account to Najma Rs. 9,500
19. Merchandise was returned by Najma Rs. 350
Required:
a) Purchase journal
b) Purchase return and allowance journal
c) Sales journal
d) Sales return and allowance journal
e) Relevant accounts in general ledger
f) Relevant accounts in respective subsidiary ledgers

Question 7:
Question 8:

Question 9:

Question 10:
 3.0
CASHBOOK MIX PLATE

Question 1:
Followings are the transactions of A-2-Z traders for the month of January 2014. This is the first
year of business:

Party Sales Sales Return Cheque received Discount allowed

Rs. Rs. Rs. Rs.

Ali 5,000 200 2,000 100

Bilal 2,400 - 1,000 50
Chaudary 1,500 - 500 -
Dilawar 4,600 400 1,500 100
Enaam 2,700 - 800 50
Fahad 3,500 300 1,000 -

Purchases Purchase return Cheque paid Discount received

Rs Rs Rs Rs

Gulraiz 2,000 300 400 -

Hashim 1,800 - 500 50
Imran 2,500 - 1,000 100
Jahanzeb 1,400 - 400 -
Kashif 2,600 200 700 -
Show the following transactions in books of prime entry, in general ledger and in subsidiary
ledgers. (Cash book is with discount column)
The following are the transaction of Chinto Traders for the month of January 2012.

Question 2:

1. Started business with cash Rs. 500,000

Deposited Cash into Bank Rs. 280,000
2. A petty cash fund was created with a float of Rs. 8,000 paid by cheque
3. Purchased good for cash Rs. 45,000
4. Purchased furniture costing Rs. 40,000 from Baqir by paying rs. 12,000 and balance on
credit
5. Purchased goods on credit from Bashir Rs. 43,000
6. Sold goods for cash Rs. 29,000
7. Sold goods on credit to Haris Rs. 65,000 and Naeem Rs. 24,000
8. Purchased goods on credit from Aslam Rs. 55,000 and Bashir Rs. 30,000
9. Sold goods to Naeem worth Rs. 60,000 who paid Rs. 35,000 by cheque, Rs.
15,000 in cash and remaining on credit.
10. Received a cheque of Rs. 48,200 from Haris in full settlement of Rs. 50,000
11. Purchased goods from Aslam Rs. 75,000 by paying Rs. 25,000 by cheque
and balance on credit.
12. Withdraw cash from bank Rs. 18,000 for business use
 13. Goods returned by customer for cash Rs. 3,800
14. Paid rent expense by cheque Rs. 18,000
15. Returned goods to Aslam Rs. 4,400 and Bashir Rs. 6,000
16. A personal Motor vehicle worth Rs. 50,000 was invested into the business
17. Received cash Rs. 19,000 from Naeem in full settlement of Rs. 20,000 of
which Rs. 16,000 was deposited with bank
18. Goods returned by Harris Rs. 3,500 and Naeem Rs. 2,100
19. Paid to Aslam Rs. 48,000 by cheque in full settlement of Rs. 50,000
20. Withdraw goods for personal use Rs. 10,000
21. Returned goods to Aslam Rs. 4,800
22. Paid to Bashir Rs. 16,500 by cheque and Rs. 22,000 by cash in full settlement of Rs. 40,000
23. Returned goods to Bshir Rs. 3,200 for cash
24. Paid salaries by cheque Rs. 40,000
25. Good returned by Naeem for cash Rs. 4,200
26. The following expenses were incurred from petty cash during the month:
Stationary Rs. 1,100, Entertainment Rs. 1,800. Cleaning Rs. 900. Postage Rs.
660 and Travelling Rs. 2,451 which were duly reimbursed from cash.

Required:
a) Record the transactions in the relevant journal.
b) Prepare general ledger
c) Prepare trial balance
d) Prepare subsidiary ledger

Question 3:
Following are transactions of the business of W Smith, who is the toy dealer

1. Started business of Rs. 500 cash

2. Bought goods for cash Rs. 85
3. Bought goods on credit Rs 116 from E Morgan
4. Sold goods for cash Rs. 42
5. Returned goods to E Morgan Rs. 28
6. Bought goods on credit Rs. 98 from A Moses
7. Returned goods to A Moses Rs. 19
8. Sold goods to A Knight Rs. 55 on credit
9. Paid E Morgan’s account by cash Rs 88
10. A knight paid us his account in cash RS. 55
11. Invested business with Rs. 1,000 cash
12. Paid Rs. 900 of the cash into the bank
13. Bought goods on credits Rs. 78 from S Holmes
14. Bought a motor van by cheque Rs 500
15. Bought goods for cash Rs. 55
16. Sold goods on credit Rs. 98 to D Moore
17. Returned goods to S Holmes Rs. 18
18. Sold goods for cash Rs. 28
19. Bought fixtures on credit from Kingston Equipment Co. Rs. 150
20. D Watson lent us Rs. 100 paying us the money by cheque
21. We paid S Holmes his account by cheque Rs. 60
22. We paid Kingston Equipment Co. by cheque Rs. 150
Required:
a) Record the transactions in the relevant journal.
b) Prepare general ledger
c) Prepare trial balance
d) Prepare subsidiary ledgers.

Question 4:
1. Zia started business with cash Rs. 90,000
2. Purchased merchandise from Saeed Rs. 20,000
3. Returned merchandise to Javed Rs. 10,000
4. Paid cash for rent Rs. 1,400
5. Sold merchandise to Javed Rs. 10,000
6. Merchandise returned by Javed Rs. 1,500
7. Purchased merchandise on cash Rs. 12,000
8. Returned merchandise Rs. 1000 for cash
9. Opened Bank account with HBL by depositing cash Rs. 20,000
10. Paid cheque for commission Rs. 1,500
11. Received rent by cash Rs. 3,000
12. Zia invested cash Rs. 150,000 and shop Rs. 50,000
13. Purchased merchandise on cash Rs. 22,000
14. Opened bank account with NBP Rs. 4,500
15. Returned merchandise to supplier Rs 800 (Purchases made on cash)
16. Purchase merchandise on account from Jamil 6,000
17. Returned merchandise to Jamil Rs 200
18. Paid salary by cash Rs 1,500
19. Paid cash to Jamil Rs. 4,000
20. Sold merchandise on cash Rs. 9,800
21. Merchandise returned by customer Rs. 400 for cash
22. Sold goods on account to Safdar Rs. 9,000
23. Goods returned by Safdar Rs 600
24. Received cash from Safdar Rs 400
25. Withdraw cash from bank for personal use Rs. 1,000
26. Withdraw cash from bank for office use Rs. 3,000
27. Received commission by cash Rs. 2,000

Required:
a) Record the transactions in the relevant journal.
b) Prepare general ledger
c) Prepare trial balance
d) Prepare subsidiary ledgers.
Question 5:

Question 6:
Question 7:
Question 8:
Question 9: