A unit of Realwaves (P) Ltd Journal

CHAPTER 2 JOURNAL

Meaning
Journal is a book of original entry in which the transactions are recorded first of all, as and when
they take place.

FORMAT OF JOURNAL
JOURNAL
Date Particulars Ledger Amount Dr. (`) Amount Cr. (`)
folio
(1) (2) (3) (4) (5)

Classification of accounts

Classification of Accounts

Personal Accounts Impersonal Accounts

Real Accounts Nominal Accounts

Natural Personal Artificial Personal Representative Personal

Accounts Accounts Accounts

Tangible Real Intangible Real

Accounts Accounts

(A) Personal Accounts: The accounts, which relate to an individual, firm, company or institutions
are called personal accounts. Accounts of Mohan, Accounts of Ram Chander, Accounts of D.C.M
limited, Accounts of Delhi university, bank account, capital account of the proprietor, drawings
account of the proprietor etc. are examples of personal accounts.
Rule: Rule for recording a transaction in personal accounts in simple words is
“DEBIT THE RECEIVER
CREDIT THE GIVER”

(i) Natural personal Accounts: Accounts of ‘natural persons’ means the accounts of human beings.
E.g., Mohan’s Account, Sohan’s Account, Shubhi’s Accounts, Neha’s Account etc. Proprietor’s
Capital Account, Proprietor’s Drawings Account, Debtors Account, Creditors Accounts are also
included in this category.

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.1
A unit of Realwaves (P) Ltd Journal
(ii) Artificial personal Accounts: These accounts do not have physical existence as human being
but they work as personal accounts. E.g., any firm’s account, any limited company’s account, any
institution’s account and any bank’s account. These are treated as artificial persons for the recording
of business transactions. These accounts also include the accounts of clubs, insurance companies and
the accounts of government departments, which are recognized as ‘persons’ in the business dealings.

(iii) Representative personal Accounts: When an account represents a particular person or group
of persons, it is treated as a Representative personal Account. “Salaries Outstanding Account” is the
account, which represents the account of all the persons to whom salaries have to be paid. This is
therefore termed as ‘Representative personal Account’. Other e.g. of the Representative personal
Accounts are, prepaid insurance account, accrued interest account and unearned commission account
etc.

(B) Impersonal Accounts: These accounts are classified into Real & Nominal accounts they are as
follows:

(i) Real Accounts: The accounts of all those things whose value can be measured in terms of money
and which are the properties of the business are termed as Real Accounts. Such as cash account,
furniture account, machinery account, goodwill account etc.
Rule: Rule for recording a transaction in real accounts in simple words is
“DEBIT WHAT COMES IN
CREDIT WHAT GOES OUT”

(a) Tangible Real Accounts: Tangible real accounts are the accounts of those things which can be
touched, felt, measured, purchased, sold etc. e.g. of such accounts are cash account, stock account,
furniture account, land account etc.

(b) Intangible Real Accounts: These accounts represent such things, which cannot be touched, but,
of course, their value can be measured in terms of money. E.g., goodwill account, patents account,
trade marks account, copyrights accounts etc.

(ii) Nominal Accounts: These accounts include the accounts of all expenses and incomes. E.g. of
nominal accounts relating to expenses are salaries paid, rent paid, discount allowed, bad debts etc.
E.g. of nominal accounts relating to incomes are commission received, interest received, discount
received etc.
Rule: Rule for recording a transaction in nominal accounts in simple words is

“DEBIT ALL EXPENSES & LOSSES

CREDIT ALL INCOMES & GAINS”

Illustration: 1
Enter the following transactions in the journal of Manish:

1994 Particulars Amt (`)

June 1 Manish started business with cash 50000
2 Purchased goods for cash 20000
4 Purchased goods from Harish 12000

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.2
A unit of Realwaves (P) Ltd Journal
5 Purchased furniture for cash 6000
7 Sold goods for cash 13000
9 Sold goods to Pravesh 15000
10 Paid cash to Harish 8000
12 Received cash from Pravesh 10000
16 Purchased goods from Anish for cash 7500
17 Purchased goods from Anish 5000
18 Sold goods to Tanish for cash 12600
19 Sold goods to Tanish 7000
20 Bought machinery for cash 8000
24 Withdrew cash from office for personal use 2500
27 Paid rent 400
29 Paid wages 450
30 Paid salary to Ramesh 1200
30 Received commission 200
Ans: Total: ` 176600

Illustration: 2
Record the following transactions in the journal of Vishal:

2005 Particulars Amt (`)

May 1 Commenced business with cash 500000
2 Goods purchased from Sohan for cash 50000
3 Goods purchased from Mohan 120000
4 Goods returned to Mohan 5000
8 Goods sold to Rohan 40000
12 Rohan returned 10% of goods
Ans: Total: ` 719000

Illustration: 3
Record the following transactions in the journal of Naresh:

2005 Particulars Amt (`)

June 1 Paid cash to Mahesh 9600
And discount received from him 400
4 Received cash from Ganesh 4900
And discount allowed to him 100
10 Goods sold to Suresh 30000
12 Suresh returned goods 2000
14 Received cash from Suresh ` 27500 in full
settlement of his account
20 Sold goods to Rajesh of the list price of ` 60000
at 10% trade discount.
23 Purchased goods from Dinesh of the list price of
` 20000 at 15% trade discount.
Ans: Total: ` 146000

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.3
A unit of Realwaves (P) Ltd Journal
Illustration: 4
Give journal entries for the following transactions in the books of Pratap Rai:

1994 Particulars Amt (`)

March1 Started business with cash 100000
2 Cash purchases 48000
3 Sold goods to ram 10000
6 Returned defective goods by ram 1000
8 Received cash from ram 8800
And discount allowed 200
9 Shyam sold goods to us 20000
10 Khush purchased goods from us 12000
10 Paid insurance premium 500
12 Paid for life insurance premium of Sh. Pratap Rai 2000
15 Paid cash to Shyam 13780
and discount allowed to him 220
18 Bought goods from Pawan, list price ` 15000 less
20% trade discount
22 Paid to Pawan 8000
26 Received cash from Khush 6000
31 Paid wages ` 400, advertisement expenses ` 250
and salaries paid ` 1500
31 Received interest 100
31 Received commission 600
Ans: Total: ` 245350

Illustration: 5
Pass journal entries in the books of Raghu from the following transactions:

1994
June 1 Raghu started business with cash ` 80000; goods ` 40000 & furniture ` 20000
. 2 Sold goods to Nandu of the list price of ` 20000 at trade discount of 10%
4 Nandu returned goods of the list price of ` 4000
8 Received from Nandu ` 14150 in full settlement of his account.
10 Purchased goods from Chandu of the list price of ` 10000 at 15% trade discount
13 Returned goods to Chandu of the list price of ` 1000
16 Settled the account of Chandu by paying cash, under a discount of 4%
18 Purchased goods from Anil ` 5000; Sunil ` 10000
19 Paid cash to Anil ` 1900 and discount received ` 100
20 Paid ` 9800 to Sunil in full settlement of his account.
20 Bought a ‘table fan’ for ` 1200 for the domestic use of Raghu.
25 Sold goods for cash of the list price of ` 8000 at 10% trade discount and 3% cash discount.
30 Paid rent ` 800; trade expenses ` 700 & traveling expenses ` 380.
Ans: Total: ` 230280

Illustration: 6
Journalise the following transactions in the books of Sanjeet bros:

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.4
A unit of Realwaves (P) Ltd Journal

(a) ` 1000 due from Archeet are now bad debts.

(b) Goods worth ` 2000 were used by the proprietor.
(c) Charge depreciation @10% p.a. for two months on machine costing ` 30000
(d) Provide interest on capital of ` 150000 at 6% p.a for 9 months.
(e) Manjeet who owed us ` 2000 becomes insolvent and a final dividend of 60 paise in a rupee is
received from his estate.
(f) Goods costing ` 8000 sold to Paramjeet for ` 10000.
Ans: Total: ` 22250

Illustration: 7
Enter the following transactions in the journal of Manoj:

1994 Particulars Amt (`)

March1 Manoj started business with cash 60000
2 Purchased furniture for cash 10000
4 Purchased goods for cash 25000
5 Bought goods from Kamlesh 15000
6 Sold goods for cash 36000
8 Sold goods to Hari 30000
10 Paid cash to Kamlesh 15000
14 Received cash from Hari 18000
16 Purchased goods from Sohan 6000
18 Purchased goods from Sohan for cash 8000
20 Paid rent for the office 1000
26 Received commission 750
27 Paid salary to Gopal 1200
28 Received cash from Hari 12000
29 Withdrew cash from office for personal use 4000
30 Wages paid 7200
30 Bought machinery for cash 8000
Ans: Total: ` 257150

Illustration: 8
Enter the following transactions in the journal of Sahil:
1994 Particulars Amt (`)
Oct 1 Purchased goods from Anil for cash 40000
3 Purchased goods from Atul 75000
6 Returned goods to Atul 3000
8 Paid cash to Atul 50000
10 Sold goods to Charu 100000
12 Charu returned 20% of goods
15 Paid rent 2000
20 Sahil withdrew for personal use 10000
Ans: Total: ` 300000

Illustration: 9

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.5
A unit of Realwaves (P) Ltd Journal
Enter the following transactions in the journal of Ganesh:
1994 Particulars Amt (`)
March3 Sold goods to dev 100000
5 Received from dev in full settlement of his 98000
account.
6 Sold goods to Manmohan 80000
8 Manmohan returned goods 1000
15 Received from Manmohan in full settlement of 78200
his account
16 Received cash from ram 19500
And discount allowed 500
20 Paid cash to Pawan 4700
and discount received to him 300
25 Sold goods to Varun of the list price of ` 25000
at 20% trade discount.
Ans: Total: ` 405000

Illustration: 10
Pass journal entries in the books of Harish from the following transactions:
1994 Particulars Amt (`)
Jan 1 Commenced business with cash 50000
2 Purchased goods from Subhash 20000.
4 Sold goods to Ramnath 15000
6 Ramnath returned defective goods 1000
10 Received cash from Ramnath 13800
And discount allowed 200
12 Gopal sold goods to us 10000
14 Paid to Gopal in full settlement of his account
after deducting 5% discount
15 Paid rent 1000
16 Paid rent of Harish’s residence 500
18 Purchased goods for cash from Govind for `
6000 at 20% trade discount
20 Purchased goods from Govind for ` 10000 at
20% trade discount
24 Paid to Govind ` 7850 in full settlement of his
account
25 Paid to Subhash ` 4750; discount received rs 250
Paid wages ` 400; salaries ` 4000; advertisement
31 expenses ` 800 and trade
expenses ` 1000
Ans: Total: ` 153500

Illustration: 11
Enter the following transactions in the journal of Raja:

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.6
A unit of Realwaves (P) Ltd Journal
2005 Particulars
Jan 10 Purchased goods from Ravi of the list price of ` 50000 at 15% trade discount
13 Returned goods to Ravi of the list price of ` 2000
15 Paid cash to Ravi ` 40000 in full settlement of his account
20 Purchased goods from Vicky of the list price of ` 60000 at 10% trade discount
22 Returned goods to Vicky of the list price of ` 5000
25 Paid cash to Vicky ` 49000 in full settlement of his account
Ans: Total: ` 193000. Cash discount on Jan 15 ` 800 & on Jan 25 ` 500.

*****

Vidhyadhar Nagar: F – 45, Balaji Tower – I, Behind Vishal Mega Mart.

Mansarovar: 69/318, VT Road, Mansarovar
Contact: 9829959536,7737733360,9928001210 2.7