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JOURNAL
ENTRY FOR STARTING A BUSINESS
Particular
LF
Debit
Credit
Cash a/c Dr.
50,000
To Capital a/c
( Being cash introduced)
CASH PURCHASE
2. Purchased goods for cash Rs. 20,000
Purchases a/c Dr.
20,000
To Cash a/c
( Being goods purchased for cash)
3. Purchased goods from Ravi for cash Rs. 5,000
5,000
CREDIT PURCHASE
4. Purchased goods from Subhash Rs. 12,000
If not specified, on cash Rs. 12,000, then assume it was on credit
12,000
To Subhash a/c
( Being goods purchased on credit)
5. Purchased goods on credit and returned
1,20,000
To Mohan a/c
ii Goods returned to Mohan Rs. 5,000
Mohan a/c Dr.
To Purchases returna/c
( Being goods purchased on credit returned)
PURCHASE OF ASSET
6. Purchased furniture for cash Rs. 6,000
Furniture a/c Dr.
6,000
( Being furniture purchased in cash )
7. Purchased furniture on credit Rs. 6,000
To vendora/c.
( Being furniture purchased on credit)
8. Purchased fan and Almira for Rs. 6,000
Particulars
L.F
Furniture &fixtures a/c Dr.
( Being fan & almira purchased )
9. Purchased an iron safe for business for Rs. 10,000
Office equipment a/c Dr.
10,000
To cash a/c
(Being iron safe purchased in cash )
10. Purchase of filing cabinet, type writer and electric fan costing Rs. 5,000, 2,000 and 4,000 respectively.
7,000
Fixture a/cDr.
4000
( Being filing cabinet, type writer and electric fan in cash)
11,000
CASH SALES
11. Sold goods for cash Rs. 13,000
13,000
To sales a/c
( Being goods sold for cash)
CREDIT SALES
12. Sold goods to Mahesh Rs. 15,000
Mahesh a/c Dr.
15,000
To Sales a/c
( Being goods sold on credit)
13.
Rajiv a/c Dr.
40,000
ii. Rajiv returned 10% of goods
Sales returna/cDr.
4,000
To Rajiv a/c
( Being goods sold on credit returned back)
14. Received cash from Mahesh Rs. 10,000
To Mahesh a/c
( Being cash received from Mahesh)
15. Sale of old furniture Rs. 800
800
To furniturea/c
( Being old furniture sold)
16. Paid cash to Subhash Rs. 8,000
Subhash a/c Dr.
8,000
( Being cash paid to Subhash)
17. Received cash from Subhash Rs. 8,000
( Being cash received from Subhah)
18. Paid into bank for opening a current account Rs. 10,000
Bank a/c Dr.
(Being bank account opened)
19.Goods sold for Rs. 50,000 & the amount was deposited into the bank
( Being goods sold and cash deposited into bank the same day)
20. Amount withdrawn from bank
To Bank a/c
( Being amount withdrawn from bank)
21. Goods purchased & payment made by cheque Rs. 25,000
25,000
( Being goods purchased & payment made by cheque)
22. If amount of Rs. 20,000 is received for cash sales & deposited in the bank on the same day.
March 1
OR
Sales a/c
( Being goods sold and received through cheque)
23. Cheque received on previous day & deposited today Rs. 1,500
1,500
To cheque in hand a/c
( Being cheque received previous day & deposited today)
?24.
( Being cheque received from Mohan)
b, Mohan’s cheque dishonored Rs. 10,000
Mohan a/cDr.
( Being Mohan’s Cheque dishonoured)
25. Bank charges deducted by bank Rs. 120
Bank charges a/cDr.
120
To Banka/c
( Being bank charges deducted by bank)
26. Bank allowed interest or interest received Rs. 1500
Bank a/cDr.
To Interesta/c
( Being interest received)
Amount/Goods/Assets, etc. withdrawn for personal use
27. Withdraw cash from office for personal use Rs. 2,500
Drawingsa/cDr.
2,500
(Being drawings made in cash)
28. Paid for propertier LIC Rs. 1,200 through cheque
1,200
( Being lic paid for the proprietor)
29. Paid income tax through chequeRs. 5000
( Being income tax paid through cheque)
30. Proprietor took goods from office for personal use Rs. 2,500
To Purchases a/c
( Being goods taken by proprietor for personal use)
31. Paid rent Rs. 400
Renta/cDr.
400
( Being rent paid in cash)
32. Paid wages Rs. 5,000
Wages a/cDr.
(Being wages paid in cash)
33. Paid salary to Gopal Rs. 1,200
Salarya/cDr.
12,00
( Being salary paid to Gopal)
34. Trade expenses paid Rs. 500
Trade expenses a/cDr.
500
To casha/c
( Being trade expenses paid)
35. Paid stationery expenses Rs. 780
Stationery expensea/cDr.
780
( Being stationary expense paid)
36. Paid for office cleaning Rs. 200
Office expensea/cDr.
200
( Being office expenses paid)
37. Received commission Rs. 200
Casha/cDr.
To Commission a/c
(Being commission received)
38. Received interest Rs. 2000
2000
To Interest a/c
(Being interest received in cash)
39. Old newspapers sold Rs. 50
Cash a/cDr.
50
To miscellaneous incomea/c
( Being old newspapers sold)
DISCOUNT
Discount is of two types
Trade discount
Cash discount
40. Trade discount:
Trade sells goods of a list price Rs. 1,00,000 at 20% T.D. (trade discount) for cash
1,00,00020%=20,000
1,00,000-20,000
80,000
( Being cash sales made)
S.no.
Amount
List price
1,00,000
a)
(-) Trade discount (10)%
90,000
b)
(-) cash discount 2 %
1,800
Total
88,200
Two types-
Expenses Income
(discount allowed) (discount received)
41. a) Received cash from Vasudev Rs. 8,800, and discount allowed Rs. 200
8800
Discount a/c Dr.
To Vasudev a/c
( Being cash received from Vasudev and discount allowed to him)
9,000
b) Paid cash to Chanderkant Rs 13,780, discount allowed by him Rs. 220
Chanderkant a/c Dr.
14,000
13,780
To Discounta/c
( Being cash paid to Chanderkantand discount availed on such payment)
220
Purchases
(-) purchases return
XXX
Net amount due
(-) amount paid
Discount received
(XX)
Sales
(-) Sales return
(-) amount received
Discount allowed
42 Bought goods for cash of L.P. Rs. 50,000 at 20% T.D. and 5% cash discount
38,000
( Being purchases made in cash and cash discount received)
2,000
(-) Trade discount 20%
(-) Cash discount 5%
Trade discount=50,000=10,000
Cash discount=40,000=2,000
43. Paid Gopal through cheque Rs. 10,000
Gopal a/c Dr.
( Being payment made to Gopal through cheque)
44. Paid Gopal through Cash Rs. 15,000
( Being payment made to Gopal in cash)
45. Bought goods for Rs. 2,00,000 from Trisha at 5% discount and 10% T.D. half of the amount paid through cheque
1,80,000
85,500
To discount a/c
4,500
To Trisha a/c
( Being purchases madeand part payment made through cheque)
Cash discount is awaited only on cash amount paid.
2,00,000
(-) T.D 10%
(-) Credit
46 Assets & liabilities of previous year carried forward to the current year
Assets a/c Dr.
To liabilities a/c
To capital a/c (B.F)
( Being assets and liabilities brought forward)
Building a/c Dr.
60,000
To creditors a/c
To capital a/c
1,10,000
47. Paid income tax Rs. 10,000
Drawings a/c Dr.
( Being income tax paid)
Failure to pay the whole debt.
48 .Dinesh was declared involvement & a payment of Rs. 60 paisa, in a rupee loan given to Dinesh 10,000.
Bad debts a/c Dr.
To Dinesh a/c
( Being 60% amount received from Dinesh due to insolvency)
Bad debt = Rs.10,000
49. Bad debts recovered
To bad debts recovereda/c
( Being bad debts recovered)
50 Purchase goods from Gopal & paid by cheque, goods sold half of these goods to Y at a profit on cost @30%.
To bank a/c
(Being purchase made through cheque)
Y a/c Dr.
5,200
51. Supplied goods costing Rs. 6,000 to Shakuntla, issued invoice at 10% above cost, 5 % trade discount.
Shakuntlaa/cDr.
6,270
( Being sales made to Shakuntala and trade discount allowed on the goods)
Profit -6,000
Cost +profit=sales price
Selling price = 6,000+600= 6,600
Trade discount =6,600
Final Selling Price =6,600-330
SALE OF ASSET AT A GAIN OR LOSS?.
52. Purchase furniture from Gopal Rs. 8,000 & paid by cheque.
( Being furniture sold and payment received trough cheque)
53. Furniture sold to Y for cash for 6,000
loss on sale a/c Dr.
To furniture a/c
( Being Furniture sold for cash)
54. Purchase Land for Rs. 8,00,000 & paid by cheque.
Land a/c Dr.
8,00,000
( Being land purchased and payment made through cheque)
55. Land sold to Y for cash for Rs. 10,00,000
10,00,000
To Land a/c
To profit on sale a/c
( Being Land sold to Y for cash)
56. Outstanding expenses
Salary a/c Dr.
To salary outstandinga/c
( Being salary outstanding)
57. Prepaid expenses
Insurance premium a/c Dr.
Insurance prepaid a/c Dr.
3,000
( Being insurance premium paid )
INSURANCE - 12000/12 x 3 = Rs. 3000
58. Insurance paid in advance Rs. 3000
Prepaid Insurance a/c Dr.
To insurancea/c
( Being insurance paid in advance)
Depreciation ?
59 Decrease in the value of asset due to obsolescence, wear and tear or use.
Depreciation a/c Dr.
To asset a/c
( Being asset depreciated)
60 Depreciate machinery , furniture and office equipment for Rs. 7,000 , 2,000 and 1,000 respectively.
To machinery a/c
To office equipment a/c
1,000
61. Charges depreciate on machinery costing Rs. 3,00,000 bought in February/ @10%p.a
( BeingMachinery depreciated)
Depreciation -3,00,000 *10% *2/12
62. Interest on capital
Provide 12% interest on capital amounting to 10,00,000
IOC = 10,00,000 X 12/100
Interest on capital a/c Dr.
( Being interest on capital due)
63. Interest on Drawings
Charge interest on drawings Rs. 8,000
To interest on drawings a/c
( Being interest on drawings due)
64. Bought goods from X for cash Rs. 50,000, also paid 1,000 for carriage.
Carriage a/c Dr.
(Being goods purchased from X for cash)
51,000
65. Purchased machinery for cash Rs. 3,00,000 and paid Rs. 2,50,000 in cash as wages on its installation
Machinery a/c Dr.
3,25,000
( Being machinery bought in cash & installation charges paid on the same)
66. Bricks, timber costing Rs. 10,00,000 and Rs. 5,00,000 respectively purchased for construction of building and paid there cheque.
15,00,000
To bank a/c.
( Being Building constructed and material bought for construction)
66. Purchased on old machinery Rs. 1,00,000 and spent Rs. 5,000 on its carriage, Rs. 20,000 on its immediate repairs.
1,25,000
(Being old machinery purchasedand repair charges paid on the same)
67. Purchased a horse for business for Rs. 15,000
Live stock a/c Dr.
( Being horse purchased)
68. The horse bought died its carcass was sold for Rs. 1,000
Profit & loss a/cDr.
To live stocka/c
( Being carcass of horse sold)
69. Drawings in goods
To purchases a/c
( Being goods withdrawn for personal use)
70. Goods given as charity
Charitya/cDr.
71. Goods distributed as free sample.
Advertisement exp.a/c Dr.
( Being goods distributed as free sample.)
72. Loss of goods by theft or loss by fire
Loss by theft a/c Dr.
Loss by fire a/c Dr.
( Being goods lost due to fire & theft)
73 In case goods were insured, in full amount of loss is received
To insurance company. a/c
( Being insurance money received on loss of goods that were insured)
74. If partial amount of loss is received loss by theft Rs. 100, received amount from insurance company Rs. 80
80
Loss by theft a/cDr.
20
To insurance com. a/c
( Being compensation received from insurance company)
100
By: NIHARIKA WALIA ProfileResourcesReport error
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