Professional Documents
Culture Documents
FUNDAMENTALS ACCOUNTS
PERSONAL A/c IMPERSONAL A/c
Debtors Creditors
(Receivable) (Payable) Characteristics of Personal A/c
Purchase Sale Purchase return or, Return onward or, Sales return or, Return inward or,
Return to Suppliers Return from Customers.
Purchase of Goods
1. Purchase for cash :Purchase A/c Dr.; To Cash A/c (Being goods purchased for cash )
2. Purchase for credit : Purchase A/c ..Dr.; To Creditors A/c. (Being goods purchased on credit.)
3. Purchased by Cheque : Purchase A/c ..Dr; To Bank A/c. (Being goods purchased by Cheque)
Sale of Goods
1. On Cash – Cash A/c Dr. To Sales A/c 1 Purchase Return – Creditors A/c- Dr. (Name)
2. By Cheque – Bank A/c Dr. ,, ,, ,, To Purchase Return A/c
3. On Credit – Debtors A/c Dr. ,, ,, ,, ( Being goods returned to …….)
2. Sales Return :- Sales Return A/c Dr.
To Debtors A/c. (Name)
(Being goods returned by …….)
Ex-2. Machinery purchased for –5000 and Carriage paid thereon -1000.
Machinery A/c…Dr. 6000
To Cash A/c. 6000.
(Being machinery purchased for –5000 & carriage paid thereon –1000)
Ex.- 1. Goods sold for – 10000 subject to trade 2]- Cash paid to Mr. X Rs. 490 in full settlement of–Rs. 500.
discount 10% and cash discount @ 5%.
Cash A/c Dr. 8550 X’s A/c… Dr. 500
Discount Allowed A/c Dr. 450 To Cash A/c 490
To Sales A/c. 9000. To Disc. Recd A/c 10.
( Being goods sold for –1000, subject to T.D. @ (Being cash paid and discount received )
10% and cash discount @ 5%.)
**[To remember, when cash is paid disc. is received & when cash is received, discount is allowed.]
8. BAD DEBTS :- Due to an ill motive or financial bankruptcy a debtor may prove to be bad e.g. irrecoverable such
a debtor is called bad debts. A Debtors may be fully bad or partial bad.
1) Partial bad : Mr. X who our debtor for –1000 became 2. Fully Bad:- Mr. X who was our debtor
bad and only 40% of the due realised from his estate. for –1000 proved bad.
Cash A/c Dr. 400 Bad Debts A/c 1000
Bad Debts A/c 600 To X’s A/c. 1000
To Mr. X. A/c 1000 (Being bad debts written off)
(Being 40% of the due realized from X’s estate and balance written off as bad.)
9. BAD DEBTS RECOVERY :- When a debtor who was written off as bad, now paying, it becomes our income.
Ex. Mr. X who was written off as bad for – 200 recovered now— Cash A/c. Dr.
To Bad debts recovery A/c
10. Drawings / Donations / Charity :-When the proprietor takes anything from business for his personal use it is
called Drawings A/c. It is Asset for us and so should be debited. When we give anything to others without charging
anything for it or in exchange of no benefit, it is donation or charity . This is our exp. and must be debited. The mode
of Drawing / Donation /charity may be as under :-
By Cash By Cheque By Goods By Assets
Drawings A/c Dr. Drawings A/c Dr. Drawings A/c Dr. Drawings A/c Dr.
Or, Donation A/c .Dr. Or, Donation A/c .Dr. Or, Donation A/c .Dr. Or, Donation A/c .Dr.
To Cash A/c. To Bank A/c. To Purchase A/c To Asset A/c.
3. On Jan. 1, 1986, K. Bose started his business with a capital of Rs. 12,000. His transactions during the month were as
follows:
1986 Rs. 1986 Rs.
Jan. 2 Purchased furniture 4,000 Jan. 18 S. Roy returned goods 1,000
,, 3 Purchased goods from ,, 20 Paid for advertisement 300
B. Sen 7,000 ,, 23 Received interest 50
,, 5 Sold goods to S. Roy 5,000 ,, 26 Received from S. Roy 1,800
,, 7 Paid to B. Sen 3,000 ,, 28 Paid commission 80
,, 8 Returned goods to B. Sen 500 ,, 29 Paid office rent 200
,, 12 Goods sold for cash 2,500 ,, 31 Paid salaries to staff 450
Record the above transactions in Journal, post them into Ledger Accounts of K. Bose and prepare a T. Balance on 31.1.86.
(T.B. – Rs.23,550; Goods A/c – nil)
TRIAL BALANCE
4. Prepare a Trial Balance of Mr. Basak from the following balances:-
Stock (1.1.85) Rs. 9,000 Goods invoiced to Rs. 70,000
Stock (31.1.85) Rs. 9,000 Purchase Ledger Bal. Rs. 15,000
Purchase Rs. 41,000 Rent paid Rs. 4,000
Purchase Return Rs. 500 Bills Receivable Rs. 2,000
Sales Return Rs. 700 Customer's Bal. Rs. 7,000
Carriage Rs. 1,000 Rent Receivable Rs. 5,000
Salary Rs. 2,000 Salary Payable Rs. 200
Acceptance (accepted) Rs. 1,700 Provision for Discount Rs. 2,000
Bad Debts Rs. 200 Buildings Rs. 40,000
…………………………………………………….…..6…………………………………………………………I.I.P.S.
Advance for sale Rs. 700 Loan on Mortgage of building Rs. 20,000
Profit on sale of Investment Rs. 200
G. P. Notes Rs. 4,000 [Total: Rs.1,15,900; Capital Rs.5,600]
5.The total of the debit side of the T. Balance of a large Boot and Shoe repairing firm as at December 31, 1991 is
Rs.1,66,590 and that of the credit side is Rs.42,470.
After several checkings and re-checkings the following mistakes are discovered:
Item of A/cs Correct figure (as it should be) Figure as it appears in the T. Balance
Rs. Rs.
Opening Stock 14,900 14,800
Repairs 61,780 61,780 (but appears on the debit side)
Rent and Rates 2,160 2,400
S. Creditors 6,070 5,900
S. Debtors 8,060 8,310
Ascertain the correct total of the T. Balance. [Total: Rs.1,04,420]
6. Eleven Bullets Club has the following ledger balance as on 31.3.1999. Prepare a trial balance as on that date:
subscription received Rs.15000; Donation received Rs.10000; Entrance fees received Rs.3000; Stock of bats, balls and
wickets etc. on 1.4.98 Rs.2300; Purchase of sports material Rs.10500; Rent Rs.1800; Electricity Rs.800; Newspaper
Rs.200; Sale of newspaper Rs.50; Books Rs.3000; Locker Rs.4000; Locker Rent received Rs.500; Sports expenses
Rs.2300; Furniture Rs.2500; Cash in hand Rs.500; Cash at Bank 2900; Reserve Fund Rs.2500; Subscription Outstanding on
1.4.98 Rs.750; Subscription received in advance on 1.4.98 Rs.500; Stock of bats balls and wickets etc. on 31.3.99 Rs.1700;
Subscription outstanding on 31.3.99 Rs.800; Subscription received in advance on 31.3.99 Rs.450
CASH BOOK
7. Prepare a suitable Cash Book of Mr. Marchant.
Jan 1. Cash Balance 5000.
Jan 2. Purchase goods from Mr. A for 10,000; half of which for ready cash subject to 10% T. D. and 5% C. D. as
& when payment is made.
Jan 3. Sold goods for cash 8000 & opened a Bank A/c out of the proceeds keeping 500 in hand.
Jan 4. Sold goods for 10,000 to Mr. P. Prakash who accepted a bill for payment.
Jan 5. The bill of P. Prakash was got discounted with the bank for Rs. 9800.
Jan 6. P. Prakash's bill was dishonoured and the banker charged a noting charge of RS. 15.
Jan 7. Discount allowed to a Debtors in cash RS. 50.
Jan 8. A Cheque issued for Mr. M for 475 after receiving a discount @ 5% on due.
Jan 9. Cheque issued Mr. M. dishonoured.
Jan 10. Recd three Cheque from X - 500; Y - 700; and Z - 900.
Jan 11. X's Cheque endorsed to Mr. P for a settlement of 550.
Jan 12. Y's Cheque sent to Bank.
Jan 13. All the Cheque reed on 10th Jan. was dishonoured.
Jan 14. Borrowed a loan of 10,000 from Mr. Moneywala.
Jan 31. Keeping RS. 800 in till balance deposited into the bank.
8. B. Bhatia, a dealer in furniture, requires you to write his Cash Book with Cash, Bank and Discount Columns for the
month of October, 1991 from the following transactions. Write up and balance the Cash Book and show the
relevant Discount A/cs as they would appear in the General Ledger.
1991
Oct. 2. Opening Cash Balance Rs.530.
Opening Bank Balance Rs.7,400.
4. Received from A. Arora Rs.250 in cash being rent for the month of September, 1991.
5. L. Laha paid Rs. 780 by Cheque on account and allowed him discount Rs.20.
7. H. Hasan paid Rs. 1,500 for sale for furniture by Cheque.
10. Withdrew from Bank Rs.800.
12. Paid N. Nag Rs 540 in cash in full settlement of his account of Rs. 550.
13. Sold furniture to J. Jalan for Rs. 2,000 for Cheque.
16. B. Banerjee paid Rs.1,000 cash against sale of furniture.
19. Deposited Rs. 1,200 into Bank.
22. paid R. Rustam, Rs.2,500 by Cheque for furniture purchased in September, 1991. Discount allowed by
him Rs. 50.
23. S. Saha settled his account of Rs.400 in cash subject to 5% discount.
30. Paid staff salaries for October, Rs.2,600 by Cheque.
…………………………………………………….…..7…………………………………………………………I.I.P.S.
31. Paid cash in excess of Rs. 500 into Bank.