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3.more Double Entries
3.more Double Entries
Accounting
(MF 1093)
BSc. in Engineering
Intake 34
Faculty of Engineering
1
Double entry records Cont.
Return Outwards (Purchases Returns)
Double Entry
Creditors Dr
Return Outwards Cr
2
Double entry records Cont.
• Faulty or wrong goods that the customers return back to the business
if they carry defects or if they are not according to the specifications
of the buyer
Double Entry
Return inwards Dr
Debtors Cr
3
Double entry records Cont.
Carriage Inwards
• Double Entry
Carriage Inwards Dr
Cash Cr
4
Double entry records Cont.
Carriage Outwards
Double Entry
Carriage Outwards Dr
Cash Cr
5
Practice Question 1
• Write journal entries for the following for the month of January 2016
I. 1st January, Sold goods to Nuwan worth Rs. 50,000
II. 2nd January, Return inwards amounts to Rs. 2,000
III. 3rd January, Sold goods to Rakitha worth Rs. 100,000 on credit
IV. 3rd January Carriage outwards amounts to Rs. 1,000
V. 5th January, Sales return by Rakitha amounts to Rs. 2,500
VI. 5th January, Purchased goods from Sonali Rs. 75,000 on credit
VII. 7th January, Purchases return to Sonali were Rs. 4,000
VIII. 8th January, Purchased goods from XYZ Ltd worth Rs. 60,000
IX. 9th January, Carriage inwards incurred Rs. 2,000
X. 10th January Return outwards amounts to Rs. 3,000
6
Discounts
Discounts
• Ex:- when purchasing a product for resale, the marked price of the
product is Rs. 1000. The seller gives a discount of Rs. 100 where the
product can be bought for Rs. 900.
Therefore the trade discount is – Rs. 100
Cash Discounts
Cash Discounts
Discount Discount
Allowed Received
Cash Discounts Cont.
Discounts Allowed
• Double entry
Discount Allowed Dr
Debtor Cr
Cash Discounts Cont.
Discount Received
• Double entry
Creditor Dr
Discount Received Cr
Practice Question
Identify whether the following transactions are Trade discounts, Discounts received or
Discounts allowed.
I. Purchased goods worth Rs. 50,000 and obtained a discount of 10%
II. Paid Rs. 5000 to a creditor in settlement of Rs. 6000 payment
III. 20% discount was allowed by ABC Limited when purchasing goods from them
IV. Received Rs. 6000 from a debtor who was owing Rs. 7000 as full settlement
V. Saduni, a creditor allowed a discount of Rs, 2000
VI. Discount allowed to a debtor worth Rs. 1000
VII. Purchased goods worth Rs. 50,000 from Malinda on credit. Credit term is 3 months,
however Malinda agreed Rs. 47,000 as the full settlement if amount to be paid
within one month
VIII. Sold Rs 20,000 worth of goods and collected 90% as the full settlement