Illustration 1

Journalize the following transactions and post them in the ledger.

2022
1. April 1: Om Enterprises Commenced business with cash Rs. 1,00,000
2. April 3: Deposited into bank Rs. 50,000
3. April 5: Purchased furniture for cash Rs. 10,000
4. April 8: Purchased goods and paid by cheque Rs. 30,000
5. April 8: Paid for carriage Rs. 1,000
6. April 14: Purchased Goods from Sandeep on credit Rs. 70,000
7. April 18: Cash Sales Rs. 64,000
8. April 20: Sold Goods to Shiva on credit Rs. 56,000
9. April 25: Paid cash to Sandeep in full settlement Rs. 68,400
10. April 28: Cash received from Shiva Rs. 40,000
11. April 30: Paid Rent for the month Rs. 4,000
12. April 30: Withdrew from bank for private use Rs. 5,000
In the Books of Om Enterprises-Journal
Sr. Date Particulars A/c. Debit (Rs.) Credit
No (Rs.)
.
1 2022 Cash A/c Dr. R 1,00,000
April 1 To Owner’s Equity A/c P 1,00,000
(Being business commenced)
2 April 3 Bank A/c Dr. P 50,000
To Cash A/c R 50,000
(Cash paid in the Bank)
3 April 5 Furniture A/c Dr. R 10,000
To Cash A/c R 10,000
(Purchased furniture for cash)
4 April 8 Purchase A/c Dr. N 30,000
To Bank A/c P 30,000
(Purchased goods and paid by
cheque)
5 April 8 Carriage A/c Dr. N 1,000
To Cash A/c R 1,000
(Cash paid for carriage charges)
6 April 14 Purchase A/c Dr. N 70,000
To accounts payable A/c P 70,000
(Goods purchased on credit)
7 April 18 Cash A/c Dr. 64,000
To Sales A/c 64,000
(Goods sold for cash)
8 April 20 Accounts Receivable A/c 56,000
Dr.
56,000
To Sales A/c
(Goods sold to Shiva on credit)
9 April 25 AccountsPayableA/c P 70,000
Dr.
68,400
To Cash A/c
R 1,600
To Discount A/c
N
(Cash paid to Sandeep and discount
allowed by them)

10 April 28 Cash A/c Dr. R 40,000

To Accounts Receivable A/c P 40,000
(Cash received from Shiva on A/c)
11 April 31 Rent A/c Dr. 4,000
To Cash A/c 4,000
(Cash paid for rent)
12 April 31 Drawings A/c Dr. P 5,000
To Bank A/c P 5,000
(Cash withdrawn from bank for
domestic use)
Total 5,00,000 5,00,000
 In the Books of Om Enterprises-Ledger
Cash A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

1 Owner’s 1,00,000 3 Bank A/c 50,000

Equity A/c

18 Sales A/c 64,000 5 Furniture A/c 10,000

28 Accounts 40,000 8 Carriage A/c 1,000

Receivable
A/c

25 Accounts Payable 68,400

A/c

31 Rent A/c 4,000

31 Balance c/d 70,600

2,04,000 2,04,000

May 1 Balance b/d 70,600

Owner’s Equity a/c

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022
April April

31 Balance c/d 1,00,000 1 Cash A/c 1,00,000

1,00,000 1,00,000

May 1 Balance b/d 1,00,000

Bank A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

2 Cash A/c 50,000 8 Purchase A/c 30,000

31 Drawings A/c 5,000

31 Balance c/d 15,000

50,000 50,000

May 1 Balance b/d 15,000

Furniture A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

5 Cash A/c 10,000 31 Balance c/d 10,000

10,000 10,000
May 1 Balance b/d 10,000

Purchase A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

8 Bank A/c 30,000 31 Balance c/d 1,00,000

14 Accounts 70,000
payable A/c

1,00,000 1,00,000

May 1 Balance b/d 1,00,000

Carriage A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

8 Cash A/c 1,000 31 Balance c/d 1,000

1,000 1,000

May 1 Balance b/d 1,000

Sandeep A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

25 Cash A/c 68,400 14 Purchase A/c 70,000

25 Discount A/c 1,600

70,000 70,000

Sales A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

31 Balance c/d 1,20,000 18 Cash A/c 64,000

20 Shiva A/c 56,000

1,20,000 1,20,000

May 1 Balance b/d 1,20,000

Shiva A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April
20 Sales A/c 56,000 28 Cash A/c 40,000

31 Balance c/d 16,000

56,000 56,000

May 1 Balance b/d 16,000

Rent A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

31 Cash A/c 4,000 31 Balance c/d 4,000

4,000 4,000

May 1 Balance b/d 4,000

Drawings A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2022 2022

April April

10 Bank A/c 5,000 31 Balance c/d 5,000

5,000 5,000

May 1 Balance b/d 5,000

Illustration 1: The following balances appeared in the ledger of Sharan on 1st March 2023
Debit Balance Amount (Rs.) Credit Balance Amount (Rs.)
Cash Account 30,000 Sharan’s Capital A/c 1,00,000
Purchase Account 40,000 Sales A/c 20,000
Bank of Baroda A/c 50,000

March 5: Bought goods from Radha on credit Rs. 5,000.

March 10: Drew from Bank Rs. 10,000 for the office and Rs. 3,000 for self-use.
March 17: Return goods to Radha 1,000.
March 19: Cash Purchases Rs. 7,000.
March 22: Cash Sales Rs. 10,000.
March 26: Deposited into Bank Rs. 8,000.
March 28: Interest collected by Bank Rs. 3,500 on our behalf.
Pass Journal Entries, prepare necessary Ledger Accounts and prepare a Trial Balance as on
31st March 2023

Journal
Sr. Date Particulars L.F. Debit (Rs.) Credit (Rs.)
No.

1 2023 Purchases A/c Dr. 5,000

March 1
To Accounts PayableA/c 5,000

(Being goods purchased on credit)

2 March 10 Cash A/c Dr. 10,000

Sharan's Drawings A/c Dr. 3,000

To Bank of Baroda's A/c 13,000

(Being Amount withdrawn for personal use

and office use.)

3 March 17 Accounts Payable A/c Dr. 1,000

To Purchases Return A/c 1,000

(Being goods returned to Radha)

4 March 19 Purchases A/c Dr. 7,000

To Cash A/c 7,000

 (Being goods purchased for cash)

5 March 22 Cash A/c Dr. 10,000

To Sales A/c 10,000

(Being goods sold for cash)

6 March 26 Bank of Baroda's A/c Dr. 8,000

To Cash A/c 8,000

(Being cash deposited into bank)

7 March 28 Bank of Baroda’s A/c Dr. 3,500

To Interest A/c 3,500

(Being interest collected by bank on our

behalf

Total 47,500 47,500

Ledger Accounts:
Purchases A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023
March 31
March 1 To Balance b/d 40,000 By Balance c/d 52,000
To Radha's A/c 5,000
1
7,000
To Cash A/c
19

52,000 52,000

April 1 To Balance b/d 52,000

Radha A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023
March17 March 5
To Purchases 1,000 By Purchases A/c 5,000
Return A/c

31 To Balance c/d
4,000

5,000 5,000

April 1 By Balance b/d 4,000

Cash Account
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023

March 1 To Balance b/d 30,000 March 19 By Purchases A/c 7,000

8,000
10 To Bank of 10,000 26 By Bank of
Baroda's A/c Baroda's A/c

To Sales A/c By Balance c/d 35,000

19 10,000 31

50,000 50,000

April 1 To Balance b/d 35,000

Sharan's Drawings Account

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023

March 10 To Bank of 3,000 March 31 By Balance c/d 3,000

 Baroda's A/c

3,000 3,000

April 1 To Balance b/d 3,000

Purchases Return A/c

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023

March 31 To Balance c/d 1,000 March 17 By Radha's A/c 1,000

1,000 1,000

April 1 By Balance b/d 1,000

Sales A/c
Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023

March 31 To Balance c/d 30,000 March 1 By Balance b/d 20,000

10,000
22 By Cash A/c

30,000 30,000

April 1 By Balance b/d 30,000

Bank of Baroda's A/c

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023

March 1 To Balance b/d 50,000 March 10 By Cash A/c 10,000

8,000 3,000
26 To Cash A/c 10 By Sharan's
3,500
Drawings A/c
31 To Interest
received A/c By Balance c/d 48,500
31

61,500 61,500

April 1 To Balance b/d 48,500

Interest Received A/c

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023
March 31 March 28
To Balance c/d 3,500 By Bank of
Baroda's A/c
3,500

3,500 3,500

April 1 By Balance b/d 3,500

Sharan's Capital A/c

Dr. Cr.
Date Particulars JF Amount Date Particulars JF Amount

(₹) (₹)

2023 2023
March 31
 To Balance c/d 1,00,000 March 1 By Balance b/d 1,00,000

1,00,000 1,00,000

April 1 By Balance b/d 1,00,000

Trial Balance as on 31st March 2023

Sr. No. Name of Account L.F. Debit Amount Credit Amount

(Rs.) (Rs.)

1 Cash 35,000

2 Purchases 52,000

3 Purchase Return 1,000

4 Radha 4,000

5 Bank of Baroda 48,500

6 Sharan’s Capital 1,00,000

7 Sharan’s Drawings 3,000

8 Sales 30,000

9 Interest 3,500

Total 138,500 138,500

Balance Sheet Concepts

1. Money measurement
2. Going Concern
3. Double Entry
4. Entity Concept

Income Statement Concepts

ii. Accounting Period (by convention it is 1 year)
iii. Matching concept

Types of Accounts

1. Real Accounts (Debit what comes in; credit what goes out)
2. Personal Accounts (Debit the receiver; credit the giver)
3. Nominal Accounts (Debit expenses and losses; credit income and
gain)