Accounting Cycle

Exercises
 Type of Accounts
• Personal Accounts :

• Real Accounts

• Nominal Accounts
 Debit and Credit Principle

Type of Accounts Debit Credit

Personal Receiver Giver
Real What comes in What goes out
Nominal Expenses/Losses Revenues/Gains
 Classify the accounts as:
Real, Personal or Nominal
• Bank Account
• Furniture Account
• Salary Account
• Cash Account
• Rent Outstanding
• Bank Overdraft
• Capital Account
• Sales
• Accounts Receivables
• Sundry Creditors
The following balances were extracted from the books of Snow White &co. on 31
December, 2011. You are required to arrange them in a Trial Balance
Particulars Amount in (Rs.) Particulars Amount in (Rs.)

Purchases 11,250,000 Creditors 2,812,500

Capital 9,309,375 Discount allowed 150,000
Inventories (1 January 3,750,000 Bank balance 4,687,500
2011)
Sales 16,875,000 General expenses 562,500
Discount earned 84,375 Bad Debts 75,000
Debtors 2,625,000 Furniture 937,500
Freight 22,500 Wages and 1,125,000
salaries
Cash in hand 183,750 Repair 187,500
Machinery 1,875,000 Purchase return 187,500
Provision for 562,500 Rent received 225,000
Depreciation
Sales Returns 562,500 Interest earned 187,500
Premises 2,250,000
 Correct the Trial Balance
Particulars Amount Particulars Amount
Machinery 732,089 Capital 1,897,000
Furniture 332,768 Creditors 1,331,800
Bank 303,500 Building 1,700,000
Cash 56,647 Debtors 1,796,950
Loan from Bank 1,265,000 PF deducted from 33,000
salaries
Opening Stock 402,000 Purchases 8,319,200
Sales 10,715,129 Bad Debts 66,560
Sales Returns 399,300 Insurance Premium 74,420
Rent Paid 199,660 Phone Charges 24,657
Salaries 532,600
Interest Charges 66,550
Electricity Expenses 35,368
Commission paid 199,660
TOTAL 15,240,271 TOTAL 15,243,587
 Journalise the following transactions
1. Started business with Rs. 75,000 in bank as capital

2 Bought shop furniture for Rs. 12,000 paying by cheque

3 Bought goods for Rs. 30,000 on credit from Duncans

4 Bought goods for Rs. 8,500 on credit from Brookes

5 Sold goods for cash Rs. 22,800

6 Paid rent in cash Rs. 6,000

7 Paid for stationery expenses Rs. 500 cash

8 Goods worth Rs. 7,000 returned to Duncans

9 Sold goods on credit to Harry for Rs. 20,000

10 Bought a motor van for Rs. 24,000. Paid by cheque

11 Paid by cheque to Brookes Rs. 8,500

12 Harry’s paid us by cheque Rs. 8,000

13 Paid for the month’s salaries in cash Rs. 7,500