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Page No 152:

Question 1:

Briefly state how the cash book is both journal and a ledger?

Answer:

Transactions are recorded directly from source documents in the Cash Book, so there is no need to record transactions in the Journal book. Further, on the basis of the cash transactions recorded in the Cash Book, cash and bank balances can be determined, and so there is no need to prepare cash account (which is a part of ledger) separately. Thus, the Cash Book serves the purpose of both Journal as well as ledger.

Page No 152:

Question 2:

What is the purpose of contra entry?

Answer:

Contra entry represents deposits or withdrawals of cash from bank or vice versa. The purpose of contra entry is to indicate the transactions that effect both cash and bank balances. This entry does not affect the financial positions of a business. A contra entry is recorded in both sides of a two column Cash Book and is denoted by ‘C’ in the ledger folio column.

Page No 152:

Question 3:

What are special purpose books?

Answer:

Business transactions are large in number and difficult to record; so, journal is sub-divided for quick, efficient and accurate recording of the business transactions. Special purpose books like, sales book and purchases book are maintained for those transactions that are routine and repetitive in nature. Recording through these books is economical and enables division of work among accountants.

Page No 152:

Question 4:

What is petty cash book? How it is prepared?

Answer:

Petty Cash Book is used for recording payment of petty expenses, which are of smaller denominations like postage, stationery, conveyance, refreshment, etc. Person who maintains petty cash book is known as petty cashier and these small expenses are termed as petty expenses.

It is prepared by two methods:

  1. Ordinary system: In this case, a fixed sum of money is paid to petty cashier for the payment of petty expenses and after spending the whole amount, the account is submitted by the petty cashier to the main cashier.

  2. Imprest system: In this case, a fixed sum of the money is given to the petty cashier in the beginning of a period and at the end of the period the amount spent by him is reimbursed, so that he has a fixed amount in the beginning of every new period.

Page No 152:

Question 5:

Explain the meaning of posting of journal entries?

Answer:

Posting is the process of transferring the business transactions from Journal to ledgers.

Every transaction is first recorded in the Journal and subsequently transferred to their respective accounts.

Page No 152:

Question 6:

Define the purpose of maintaining subsidiary journal.

Answer:

The process of accounting starts from identification of financial and non-financial events. Financial events are first recorded in a Journal. A small business has lesser number of transactions and thereby it may be possible to record these transactions through Journal entry. However, on the contrary, as the business grows, there will be voluminous number of transactions and the firm may experience difficulty, thereby it becomes tedious to record through Journal entry. Thus, in order to save time and effort, it is recommended to sub-divide Journal. Sub-division of Journal provides scope for division of work. This leads to the improvement of efficiency and effectiveness and infuses higher degree of accountability to the accountants for the specific subsidiary Journal assigned to them. The purposes of maintaining subsidiary Journal are given below.

  1. It saves time and efforts in recording.

  2. It enables division of work, leading to an enhancement of efficiency and effectiveness, as particular accountant takes care of particular books.

  3. It also makes each accountant more responsible and accountable for the books assigned to them.

  4. It records routine and repetitive transactions at one place, which leads to easy accessibility of information and hassle-free communication.

Page No 152:

Question 7:

Write the difference between return inwards and return outwards.

Answer:

Basis of Difference

Return Inwards

Return Outwards

Meaning

Goods sold to the customers, are returned by them.

Goods purchased are returned to the suppliers.

Balance

It has debit balance.

It has credit balance.

Treatment

It is deducted from Sales in the Trading Account.

It is deducted from Purchases in the Trading Account.

Issued

Credit note is prepared by the seller.

Debit note is prepared by the buyer.

Reduction

It reduces the payment from the Debtors.

It reduces the payment made to the Creditors.

Term

It is also termed as Sales Returns.

It is also termed as Purchases Returns.

 

Page No 152:

Question 8:

What do you understand by ledger folio?

Answer:

Ledger folio is a page number of an account in ledger that is written in the L.F. column of a journal format. In journal entry, ledger folio number is written corresponding to the name of the account in the L.F. column. It helps in easy locating of the account in the ledger book. It reduces the time in recording and rechecking.

Page No 152:

Question 9:

What is difference between trade discount and cash discount?

Answer:

Basis of Difference

Trade Discount

Cash Discount

Meaning

It is allowed when goods are purchase or sold.

It is allowed at the time of payment.

Recording in books

It is recorded in invoice/bill but not in the books.

It is recorded in the discount column of the Cash Book’s debit side, if allowed, and credit side, if received.

Purpose

It is allowed to increase sale.

It is allowed for earlier payment.

Deduction

It is deducted from the price-list of the goods.

It is not deducted from the price-list of the goods.

 

 

Page No 152:

Question 10:

Write the process of preparing ledger from a journal.

Answer:

The process of preparing ledger from Journal can be explained with the help of an example. Let us suppose that machinery is purchased from Mr. X, so, the journal entry will be:

Machinery A/c

Dr.

 

To Mr. X Account

 

In this example, Machinery Account is debited and Mr. X Account is credited. Let us understand the process of preparing ledger from the journal entry.

Account which is debited in the entry:

Step 1: Indentify the account in ledger that is debited, i.e., ‘Machinery Account’.

Step 2: Enter date in the debit side of the ‘Machinery Account’ in the ‘Date’ column.

Step 3: Enter the name of the account as ‘Mr. X Account’ (which is credited in the entry) in the ‘Particulars’ column in the debit side of the Machinery Account.

Step 4: Enter the page number of the journal, where the entry is recorded in the ‘J.F.’ (journal folio) column.

Step 5: Post the corresponding amount in the ‘Amount’ column, which is recorded against ‘Machinery Account’ in the journal entry.

Account which is credited in entry:

Step 1: Indentify the account in ledger that is credited, i.e., ‘Mr. X Account’.

Step 2: Enter date in the credit side of ‘Mr. X Account’ in the ‘Date’ column.

Step 3: Enter the name of the account as ‘Machinery Account’ (which is debited in the entry) in the ‘Particulars’ column in the credit side of the ‘Machinery Account’.

Step 4: Enter the page number of the journal where the entry is recorded in the ‘J.F.’ (journal folio) column.

Step 5: Post the corresponding amount in the ‘Amount’ column, which is recorded against ‘Mr. X Account’ in the journal entry.

Page No 152:

Question 11:

What do you understand by Imprest amount in petty cash book?

Answer:

Imprest amount is an amount of money given by the main cashier to the petty cashier in the beginning of a period. At the end of the period, the amount spent by the petty cashier gets reimbursed in such a manner, that he has the same amount of cash in hand in the beginning of next period. For example, if the main cashier gives an imprest amount of Rs 1,000 to the petty cashier on April 01, 2011 and at the end of the month the petty expenses amount to be Rs 850, which is spent by the petty cashier during the month. In this case, Rs 850 will be reimbursed, so, that on May 01, 2011, the petty cashier will have Rs 1,000 at his disposable to meet petty expenses for the next month.

Page No 152:

Question 1:

Explain the need for drawing up the special purpose books.

Answer:

The needs for drawing up the special purpose book are given below.

  1. Quick and efficient recording: It is a time consuming process to record all the transactions in a journal. If there are separate books, then recording of transactions can be done more efficiently and timely. So, the need of special purpose book arises.

  2. Repetitive nature: In every business, some transactions are similar and repetitive in nature. It will be more convenient to record all similar transactions at one place. For example, all credit sales transactions are recorded in the Sales Book.

  3. Economical: It is more economical as recording through the special purpose books saves time and also enhances the efficiency of accountants and clerks.

  4. Easy posting: If similar transactions are recorded at one place, posting becomes easier.

  5. Complete information at one place: All information related to purchases, sales, cash receipts, payments, etc. are easily and hassle-free available.

Page No 152:

Question 2:

What is cash book? Explain the types of cash book.

Answer:

Cash Book is a book of original entry. It records all transactions related to receipts and payments of cash and deposits in and withdrawals from a bank in a chronological order. In the debit side of the cash book, the cash receipts are recorded in the cash column while all deposits into bank account are recorded in the bank column. On the contrary, in the credit side of the cash book, all cash payments are recorded in the cash column, while all payments through cheques are recorded in the bank column. Usually, it is prepared on monthly basis. Cash book also serves the purpose of principle book (i.e. cash account and bank account).

  1. Single Column Cash Book: A single column Cash Book contains one column of amount on both sides, i.e., one in the debit side and other in the credit side. In the single column Cash Book, only cash transactions are recorded. In the debit side of the Cash Book, all cash receipts are recorded, while in the credit side all cash payments are recorded.

  1. Double Column Cash Book: A double column Cash Book contains two columns of amount, namely cash column and bank column on both sides. In the cash column of Cash Book, all cash receipts and payments are recorded, according to the rule of Real Accounts. All deposits either in cash or through cheques into the bank account of the business are debited in the bank column and all withdrawals of cash and payments through cheques are credited in the bank column.

    Cash Book

    Dr.

                   

    Cr.

    Date

    Particulars

    L.F.

    Cash

    Rs

    Bank

    Rs

    Date

    Particulars

    L.F.

    Cash

    Rs

    Bank

    Rs

     

    Cash

    (C)

     

     

    Bank

    (C)

     
                       
                       
                       

     

  1. Triple Ccolumn Cash Book: In a triple column Cash Book, there are three columns of amount namely, cash, bank and discount. Discount allowed and discount received are recorded in the discount column. While in the debit side, discount allowed is recorded along with the receipts, either in cash or through cheque; whereas, in the credit side, discount received is recorded, along with the payments made either in cash or by issuing cheques.

  1. Petty Cash Book: This book is used for recording payment of petty expenses, which are of smaller denominations like, postage, stationery, conveyance, refreshment, etc. is known as Petty Cash Book.

 

Page No 152:

Question 3:

What is contra entry? How can you deal this entry while preparing double column cash book?

Answer:

The transaction that is entered in either sides of the double column or three column cash book, affecting both cash and the bank balances concomitantly is called contra entry. These entries result in increase in cash balances and decrease in bank balances or vice versa. In other words, a debit of bank account leads to a credit of cash account and a credit of bank account leads to a debit of cash account. For example, Rs 200 cash deposited into bank. This transaction increases the bank amount on one hand; whereas, on the other hand reduces the cash balance. In this entry, in the debit side of the cash book, ‘Cash’ will be recorded with a balance of Rs 200 in the bank column and in the credit side of the cash book, ‘Bank’ will be recorded with a balance of Rs 200 in the cash column. This entry is a contra entry as it affects both cash and bank balance together. The contra entries are denoted by ‘C’.

Some transactions that lead to contra entry are given below.

  1. Opening a bank account

  2. Depositing cash into bank

  3. Withdrawal from bank

These transactions are recorded in a double column Cash Book as done below.

Cash Book

Dr.

Cr.

Date

Particulars

L.F.

Cash

Rs

Bank

Rs

Date

Particulars

L.F.

Cash

Rs

Bank

Rs

Cash

(C)

Bank

(C)

 

 



Page No 153:

Question 4:

What is petty cash book? Write the advantages of petty cash book?

Answer:

Petty Cash Book is used for recording payments of small expenses, which are of smaller denominations such as postage, stationery, conveyance, refreshment, etc. Person who maintains Petty Cash Book is known as petty cashier and these small expenses are termed as petty expenses.

It is prepared by the below given two methods.

  1. Ordinary system: Under this system, a certain sum of money is given to the petty cashier for the payment of petty expenses. After spending the whole amount, the accounts are submitted by the petty cashier to the main cashier.

  2. Imprest system: Under this system, a fixed sum of money is given to the petty cashier in the beginning of a period to meet the petty expenses to be incurred in that period. At the end of the period, the amount spent by the petty cashier is reimbursed. So, the petty cashier has the same fixed amount of money in the beginning of the next period.

The Performa of Petty Cash Book is given below.

Petty Cash Book

Dr.

Cr.

Amount Received

Date

Particulars

Voucher No.

Amount Paid

Rs

Analysis of Payments

Postage

Stationery

Conveyance

Telephone and

 Telegram

Miscellaneous

Remarks

                     
                     
                     
                     

 Advantages of Petty Cash Book:

Simple method: Recording of transactions in a petty cash book is easy. In an analytical Petty Cash Book, there exists separate heads for different petty expenses, which makes recording much easier. Recording in a Petty Cash Book does not require formal knowledge of accounting principles and techniques.

Time saving: Recording in Petty Cash Book saves time and efforts of the chief cashier.

Efficient control: At the end of a period,Petty Cash Book is audited by the main cashier, so frauds and errors are less probable.

Convenient handling: Recording in Petty Cash Book is convenient, as entries are to be recorded under separate heads, which makes posting easier and quicker.

Page No 153:

Question 5:

Describe the advantages of sub-dividing the Journal.

Answer:

The advantages of sub division of Journal are given below.

  1. Division of work: The lack of sub-division of Journal may lead to chaos and confusions, if large numbers of transactions are to be recorded through Journal entry by more than one accountant. There will be more inflexibility and lack of accountability among the accountants. Sub-division of Journal into Subsidiary Books facilitates division of work. Sub-division enables different accountants to work on different books. This will not only avoid confusions but also enhance the sense of accountability among the accountants.

  2. Time saving: The art of recording through subsidiary book is time efficient and more effective as compared to recording through Journal entries.

  3. Prompt information: The transactions of similar nature are recorded in a particular Subsidiary Book. This acts as a ready source to access information quicker than through Journal entry.

  4. Creates Accountability: Sub-division of Journal entrusts accountants with higher degree of responsibility and accountability for maintaining subsidiary book that are assigned to them.

  5. Easy checking: In case discrepancies or errors arise, they can be easily located and rectified, as lesser number of transactions is recorded in a Subsidiary Book than in a Journal.

  6. Specialisation: The accountability, responsibility and division of work together enhance the specialisation of each accountant. This is because, routine and repetitive tasks are performed by each accountant.

Page No 153:

Question 6:

What do you understand by balancing of account?

Answer:

Accounts are prepared on weekly, fortnightly, monthly, quarterly or on daily basis. At the end of each period they are balanced. The balancing of the accounts is done in the manner given below.

  1. The totals of the debit and credit of an account is calculated, to ascertain which one of them is higher.

  2. The higher figure among debit and credit side is written in the grand total cell on both sides of the account, i.e., in debit and in credit side.

  3. The next step is to ascertain the difference between the debit total and the credit total. This difference is called ‘Closing Balance’ or ‘Balance carried down’, and is denoted by ‘Balance c/d’.

  4. The ‘Balance c/d’ will be shown either in the debit or credit side, whichever totals up into lower amount.

  5. If ‘Balance c/d’ is written in the debit side, then the balance is called ‘Credit balance’. On the other hand, if ‘Balance c/d’ is written in the credit side, then the balance is called ‘Debit Balance’.

  6. On closing the account, ‘Balance c/d’ is brought forward to the subsequent period, and it is written as ‘Balance b/d’.

Usually, the closing balances of real and personal accounts are forwarded to the next period by this manner. For nominal accounts, Steps 1 to 3 remain same and they are closed by transferring the closing balances either to Trading Account or to Profit and Loss Account.

Page No 153:

Question 1:

Enter the following transactions in a simple cash book for December 2016:

 

 

 

Rs

01

Cash in hand

12,000

05

Cash received from Bhanu

4,000

07

Rent Paid

2,000

10

Purchased goods Murari for cash

6,000

15

Sold goods for cash

9,000

18

Purchase stationery

300

22

Cash paid to Rahul on account

2,000

28

Paid salary

1,000

30

Paid rent

500

 

Answer:

Cash Book

Dr.

           

Cr.

Date

Particulars

L.F.

Amount

Rs

Date

Particulars

L.F.

Amount

 Rs

2016

 

 

 

2016

 

 

 

Dec.01

Balance b/d

 

12,000

Dec.07

Rent

 

2,000

Dec.05

Bhanu

 

4,000

Dec.10

Purchases

 

6,000

Dec.15

Sales

 

9,000

Dec.18

Stationery

 

300

 

 

 

 

Dec.22

Rahul

 

2,000

 

 

 

 

Dec.28

Salaries

 

1,000

 

 

 

 

Dec.30

Rent

 

500

 

 

 

 

Dec.31

Balance c/d

 

13,200

 

 

 

 

 

 

 

 

 

 

 

25,000

 

 

 

25,000

 

 

 

 

 

 

 

 

 

 

 

Page No 153:

Question 2:

Record the following transaction in simple cash book for November 2016:

 

 

 

Rs

01

Cash in hand

12,500

04

Cash paid to Hari

600

07

Purchased goods

800

12

Cash received from Amit

1,960

16

Sold goods for cash

800

20

Paid to Manish

590

25

Paid cartage

100

31

Paid salary

1,000

 

 

Answer:

Cash Book

Dr.

           

Cr.

Date

Particulars

L.F.

Amount

Rs

Date

Particulars

L.F.

Amount Rs

2016

 

 

 

2016

 

 

 

Nov.01

Balance b/d

 

12,500

Nov.04

Hari

 

600

Nov.12

Amit

 

1,960

Nov.07

Purchases

 

800

Nov.16

Sales

 

800

Nov.20

Manish

 

590

 

 

 

 

Nov.25

Cartage

 

100

 

 

 

 

Nov.30*

Salaries

 

1,000

 

 

 

 

Nov.30*

Balance c/d

 

12,170

 

 

 

 

 

 

 

 

 

 

 

15,260

 

 

 

15,260

 

 

 

 

 

 

 

 

 

* Note: There is a misprint in the question as there is a transaction on November 31, which is not possible as there are only 30 days in the month of November.

 

 

Page No 153:

Question 3:

Enter the following transaction in Simple cash book for December 2017:

 

 

 

Rs

01

Cash in hand

7,750

06

Paid to Sonu

45

08

Purchased goods

600

15

Received cash from Parkash

960

20

Cash sales

500

25

Paid to S. Kumar

1,200

30

Paid rent

600

 

 

Answer:

Cash Book

Dr.

           

Cr.

Date

Particulars

L.F.

Amount Rs

Date

Particulars

L.F.

Amount Rs

2017

 

 

 

2017

 

 

 

Dec.01

Balance b/d

 

7,750

Dec.06

Sonu

 

45

Dec.15

Prakash

 

960

Dec.08

Purchases

 

600

Dec.20

Sales

 

500

Dec.25

S. Kumar

 

1,200

 

 

 

 

Dec.30

Rent

 

600

 

 

 

 

Dec.31

Balance c/d

 

6,765

 

 

 

 

 

 

 

 

 

 

 

9,210

 

 

 

9,210

 

 

 

 

 

 

 

 

 

 

Page No 153:

Question 4:

Record the following transactions in a bank column cash book for December 2016:

 

 

Rs

01

Started business with cash

80,000

04

Deposited in bank

50,000

10

Received cash from Rahul

1,000

15

Bought goods for cash

8,000

22

Bought goods by cheque

10,000

25

Paid to Shyam by cash

20,000

30

Drew from Bank for office use

2,000

31

Rent paid by cheque

1,000

 

           

Answer:

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

Date

Particulars

L.F.

Cash

Rs

Bank

Rs

2016

 

 

 

 

2016

 

 

 

 

Dec.01

Capital

 

80,000

 

Dec.04

Bank

C

50,000

 

Dec.04

Cash

C

 

50,000

Dec.15

Purchases

 

8,000

 

Dec.10

Rahul

 

1,000

 

Dec.22

Purchases

 

 

10,000

Dec.30

Bank

C

2,000

 

Dec.25

Shyam

 

20,000

 

 

 

 

 

 

Dec.30

Cash

C

 

2,000

 

 

 

 

 

Dec.31

Rent

 

 

1,000

 

 

 

 

 

Dec.31

Balance c/d

 

5,000

37,000

 

 

 

 

 

 

 

 

 

 

 

 

 

83,000

50,000

 

 

 

83,000

50,000

 

 

 

 

 

 

 

 

 

 

 



Page No 154:

Question 5:

Prepare a double column cash book with the help of following information for December 2016:

 

 

 

Rs

01

Started business with cash

1,20,000

03

Cash paid into bank

50,000

05

Purchased goods from Sushmita

20,000

06

Sold goods to Dinker and received a cheque

20,000

10

Paid to Sushmita cash

20,000

14

Cheque received on December 06, 2010 deposited into bank

 

18

Sold goods to Rani

12,000

20

Cartage paid in cash

500

22

Received cash from Rani

12,000

27

Commission received

5,000

30

Drew cash for personal use

2,000

 

 

Answer:

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

Date

Particulars

L.F.

Cash

Rs

Bank

Rs

2016

 

 

 

 

2016

 

 

 

 

Dec.01

Capital

 

1,20,000

 

Dec.03

Bank

C

50,000

 

Dec.03

Cash

C

 

50,000

Dec.10

Sushmita

 

20,000

 

Dec.06

Dinker

 

20,000

 

Dec.14

Bank

C

20,000

 

Dec.14

Cash

C

 

20,000

Dec.20

Cartage

 

500

 

 Dec.22

Rani

 

12,000

 

Dec.30

Drawings

C

2,000

 

 Dec.27

Commission

 

5,000

 

Dec.31

Balance c/d

 

64,500

70,000

 

 

 

     

 

   

 

 

 

 

1,57,000

70,000

 

 

 

1,57,000

70,000

 

 

 

 

 

 

 

 

 

 

 

 

Page No 154:

Question 6:

Enter the following transactions in double column cash book of M/s Ambica Traders for July 2017:

 

 

Rs

01

Commenced business with cash

50,000

03

Opened bank account with ICICI

30,000

05

Purchased goods for cash

10,000

10

Purchased office machine for cash

5,000

15

Sales goods on credit from Rohan and received cheque

7,000

18

Cash sales

8,000

20

Rohan’s cheque deposited into bank

 

22

Paid cartage by cheque

500

25

Cash withdrawn for personal use

2,000

30

Paid rent by cheque

1,000

 

 

Answer:

Books of M/s. Ambika Traders

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

  Rs

Bank

 Rs

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

2017

 

 

 

 

2017

 

 

 

 

Jul.01

Capital

 

50,000

 

Jul.03

Bank

C

30,000

 

Jul.03

Cash

C

 

30,000

Jul.05

Purchases

 

10,000

 

Jul.15

Rohan

 

7,000

 

Jul.10

Office Machine

 

5,000

 

Jul.18

Sales

 

8,000

 

Jul.20

Bank

C

7,000

 

Jul.20

Cash

C

 

7,000

Jul.22

Cartage

 

 

500

 

 

 

 

 

Jul.25

Drawings

 

2,000

 

 

 

 

 

 

Jul.30

Rent

 

 

1,000

 

 

 

 

 

Jul.30

Balance c/d

 

11,000

35,500

 

 

 

65,000

37,000

 

 

 

65,000

37,000

 

 

 

 

 

 

 

 

 

 

 

 

Page No 154:

Question 7:

Prepare double column cash book from the following information for July 2017:

 

 

 

 Rs

01

Cash in hand

7,500

 

Bank overdraft

3,500

03

Paid wages

200

05

Cash sales

7,000

10

Cash deposited into bank

4,000

15

Goods purchased and paid by cheque

2,000

20

Paid rent

500

25

Drew from bank for personal use

400

30

Salary paid

1,000

 

 

Answer:

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

 Rs

Bank

 Rs

Date

Particulars

L.F.

Cash

Rs

Bank

 Rs

2017

 

 

 

 

2017

       

Jul.01

Balance b/d

 

7,500

 

Jul.01

Balance b/d (Overdraft)

 

 

3,500

Jul.05

Sales

 

7,000

 

Jul.03

Wages

 

200

 

Jul.10

Cash

C

 

4,000

Jul.10

Bank

C

4,000

 

 

 

 

 

 

Jul.15

Purchases

 

 

2,000

 

 

 

 

 

Jul.20

Rent

 

500

 

 

 

 

 

 

Jul.25

Drawings

 

 

400

 

 

 

 

 

Jul.30

Salaries

 

1,000

 

Jul.30

Balance c/d (Over draft)

 

 

1,900

Jul.30

Balance c/d

 

8,800

 

 

 

 

14,500

5,900

 

 

 

14,500

5,900

 

 

 

 

 

 

 

 

 

 

 

 



Page No 155:

Question 8:

Enter the following transaction in a double column cash book of M/s Mohit Traders for January 2017:

 

 

Rs

01

Cash in hand

3,500

 

Bank overdraft

2,300

03

Goods purchased for cash

1,200

05

Paid wages

200

10

Cash sales

8,000

15

Deposited into bank

6,000

22

Sold goods for cheque which was deposited into bank same day

2,000

25

Paid rent by cheque

1,200

28

Drew from bank for personal use

1,000

31

Bought goods by cheque

1,000

 

 

Answer:

Books of M/s. Mohit Traders

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

Date

Particulars

L.F.

Cash

Rs

Bank

Rs

2017

 

 

 

 

2017

 

 

 

 

Jan.01

Balance b/d

 

3,500

 

Jan.01

Balance b/d (overdraft)

 

 

2,300

Jan.10

Sales

 

8,000

 

Jan.03

Purchases

 

1,200

 

Jan.15

Cash

C

 

6,000

Jan.05

Wages

 

200

 

Jan.22

Sales

 

 

2,000

Jan.15

Bank

C

6,000

 

 

 

 

 

 

Jan.25

Rent

 

 

1,200

 

 

 

 

 

Jan.28

Drawings

 

 

1,000

 

 

 

 

 

Jan.31

Purchases

 

 

1,000

 

 

 

 

 

Jan.31

Balance c/d

 

4,100

2,500

 

 

 

11,500

8,000

 

 

 

11,500

8,000

 

 

 

 

 

 

 

 

 

 

 

 

Page No 155:

Question 9:

Prepare double column cash book from the following transactions for the year August 2017:

 

 

 

Rs

01

Cash in hand

17,500

 

Cash at bank

5,000

03

Purchased goods for cash

3,000

05

Received cheque from Jasmeet

10,000

08

Sold goods for cash

7,000

10

Jasmeet’s cheque deposited into bank

 

12

Purchased goods and paid by cheque

20,000

15

Paid establishment expenses through bank

1,000

18

Cash sales

7,000

20

Deposited into bank

10,000

24

Paid trade expenses

500

27

Received commission by cheque

6,000

29

Paid Rent

2,000

30

Withdrew cash for personal use

1,200

31

Salary paid

6,000

 

 

Answer:

[[S]]

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

  Rs

Bank

Rs

Date

Particulars

L.F.

Cash

 Rs

Bank

 Rs

2017

 

 

 

 

2017

 

 

 

 

Aug.01

Balance b/d

 

17,500

5,000

Aug.03

Purchases

 

3,000

 

Aug.05

Jasmeet

 

10,000

 

Aug.10

Bank

C

10,000

 

Aug.08

Sales

 

7,000

 

Aug.12

Purchases

 

 

20,000

Aug. 10

Cash

C

 

10,000

Aug.15

Establishment Expenses

 

 

1,000

Aug.18

Sales

 

7,000

 

Aug.20

Bank

C

10,000

 

Aug.20

Cash

 

10,000

Aug.24

Trade Expenses

 

500

 

Aug.27

Commission

 

 

6,000

Aug.29

Rent

 

2,000

 

 

 

 

 

 

Aug.30

Drawings

 

1,200

 

 

 

 

 

 

Aug.31

Salaries

 

6,000

 

 

 

 

 

 

Aug.31

Balance c/d

 

8,800

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

41,500

31,000

 

 

 

41,500

31,000

 

 

 

 

 

 

 

 

 

 

 

 

Page No 155:

Question 10:

M/s Ruchi trader started their cash book with the following balances on July 2017: cash in hand Rs 1,354 and balance in bank current account Rs 7,560. He had the following transaction in the month of July, 2017:

 

 

Rs

03

Cash sales

2,300

05

Purchased goods, paid by cheque

6,000

08

Cash sales

10,000

12

Paid trade expenses

700

15

Sales goods, received cheque (deposited same day)

20,000

18

Purchased motor car paid by cheque

15,000

20

Cheque received from Manisha (deposited same day)

10,000

22

Cash Sales

7,000

25

Manisha’s cheque returned dishonoured

 

28

Paid Rent

2,000

29

Paid telephone expenses by cheque

500

31

Cash withdrawn for personal use

2,000

 

Prepare bank column cash book

 

 

Answer:

Books of M/s. Ruchi Trader

Cash Book

Dr.

               

Cr.

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

Date

Particulars

L.F.

Cash

 Rs

Bank

Rs

2017

 

 

 

 

2017

 

 

 

 

Jul.01

Balance b/d

 

1,354

7,560

Jul.05

Purchases

 

 

6,000

Jul.03

Sales

 

2,300

 

Jul.12

Trade Expenses

 

700

 

Jul.08

Sales

 

10,000

 

Jul.18

Motor Car

 

 

15,000

Jul.15

Sales

   

20,000

Jul.25

Manisha (Dishonour)

 

 

10,000

Jul.20

Manisha

 

 

10,000

Jul.28

Rent

 

2,000

 

Jul.22

Sales

 

7,000

 

Jul.29

Telephone Expenses

 

 

500

 

 

 

 

 

Jul.31

Drawings

 

2,000

 

 

 

 

 

 

Jul.31

Balance c/d

 

15,954

6,060

 

 

 

 

 

 

 

 

 

 

 

 

 

20,654

37,560

 

 

 

20,654

37,560

 

 

 

 

 

 

 

 

 

 

 

 



Page No 156:

Question 11:

Prepare petty cash book from the following transactions. The imprest amount is Rs 2,000.

January
2017

 

Rs

01

Paid cartage

50

02

STD charges

40

02

Bus fare

20

03

Postage

30

04

Refreshment for employees

80

06

Courier charges

30

08

Refreshment of customer

50

10

Cartage

35

15

Taxi fare to manager

70

18

Stationery

65

20

Bus fare

10

22

Fax charges

30

25

Telegrams charges

35

27

Postage stamps

200

29

Repair on furniture

105

30

Laundry expenses

115

31

Miscellaneous expenses

100

 

 

Answer:

Petty Cash Book

Amount

Received

Rs

Date
2017

Particulars

Voucher

No.

Amount

Paid

Rs

Analysis of Payments

Telephone Telegram

Postage

Conveyance

Refreshment

Cartage

Miscellaneous

2,000

Jan.01

Cash

 

 

 

 

 

 

 

 

 

Jan.01

Cartage

 

50

 

 

 

 

50

 

 

Jan.02

STD charges

 

40

40

 

 

 

 

 

 

Jan.02

Bus Fare

 

20

 

 

20

 

 

 

 

Jan.03

Postage

 

30

 

30

 

 

 

 

 

Jan.04

Refreshment for Employees

 

80

 

 

 

80

 

 

 

Jan.06

Courier charges

 

30

 

30

 

 

 

 

 

Jan.08

Refreshment of customer

 

50

 

 

 

50

 

 

 

Jan.10

Cartage

 

35

 

 

 

 

35

 

 

Jan.15

Taxi Fare to Manager

 

70

 

 

70

 

 

 

 

Jan.18

Stationery

 

65

 

 

 

 

 

65

 

Jan.20

Bus Fare

 

10

 

 

10

 

 

 

 

Jan.22

Fax Charges

 

30

30

 

 

 

 

 

 

Jan.25

Telegram Charges

 

35

35

 

 

 

 

 

 

Jan.27

Postage stamps

 

200

 

200

 

 

 

 

 

Jan.29

Repair to Furniture

 

105

 

 

 

 

 

105

 

Jan.30

Laundry Expense

 

115

 

 

 

 

 

115

 

Jan.31

Miscellaneous Expenses

 

100

 

 

 

 

 

100

 

 

 

 

1,065

105

260

100

130

85

385

 

Jan.31

Balance c/d

 

935

 

 

 

 

 

 

2,000

   

 

2,000

 

 

 

 

 

 

935

Feb.01

Balance b/d

 

 

 

 

 

 

 

 

1,065

Feb.01

Cash

               

 

Page No 156:

Question 12:

Record the following transactions during the week ending January. 30, 2017 with a weekly imprest Rs 500

 

 

 

Rs

24

Stationery

100

25

Bus fare

12

25

Cartage

40

26

Taxi fare

80

27

Wages to casual labour

90

29

Postage

80

 

 

Answer:

Petty Cash Book

Amount

Received

Rs

Date

Particulars

Voucher No.

Amount

Paid

Rs

Analysis of Payments

Stationery

Conveyance

Cartage

Postage

Miscellaneous

 

2017

 

 

           

500

Jan​.24

Cash

 

 

 

 

 

 

 

 

Jan​.24

Stationery

 

100

100

 

 

 

 

 

Jan​.25

Bus Fare

 

12

 

12

 

 

 

 

Jan​.25

Cartage

 

40

 

 

40

 

 

 

Jan​.26

Taxi Fare

 

80

 

80

 

 

 

 

Jan​.27

Wages to Casual labour

 

90

 

 

 

 

90

 

Jan​.29

Postage

 

80

 

 

 

80

 

 

   

 

402

100

92

40

80

90

 

Jan​.30

Balance c/d

 

98

 

 

 

 

 

 

2017

 

 

500

 

 

 

 

 

98

Jan​.31

Balance b/d

 

 

 

 

 

 

 

402

Jan​.31

Cash

 

 

 

 

 

 

 

 

Page No 156:

Question 13:

Enter the following transactions in the Purchase Journal (Book) of M/s Gupta Traders of July 2017:

01

Bought from Rahul Traders as per invoice no. 20041

 

40 Registers @ Rs 60 each

 

80 Gel Pens @ Rs 15 each

 

50 note books @ Rs 20 each

 

Trade discount 10%.

15

Bought from Global Stationers as per invoice no. 1132

 

40 Ink Pads @ Rs 8 each

 

50 Files @ Rs 10 each

 

20 Color Books @ Rs 20 each

 

Trade Discount 5%

23

Purchased from Lamba Furniture as per invoice no. 3201

 

2 Chairs @ 600 per chair

 

1 Table @ 1,000 per table

25

Bought from Mumbai Traders as per invoice no. 1111

 

10 Paper Rim @ Rs 100 per rim

 

400 drawing Sheets @ Rs 3 each

 

20 Packet water colour @ Rs 40 per packet

 

 

Answer:

Books of M/s. Gupta Traders

Purchases Book

Date

Invoice

No.

Name of Supplier

 (Accounts to be credited)

L.F.

Details

Rs

Amount

Rs

2017

 

 

 

 

 

 July 01

20041

Rahul Traders

 

 

 

 

 

40 Registers @ Rs 60 each

 

2,400

 

 

 

80 Gel Pens @ Rs 15 each

 

1,200

 

 

 

50 Note Books @ Rs 20 each

 

1,000

 

 

 

 

 

4,600

 

 

 

Less: Trade Discount 10%

 

(460)

4,140

 

 

 

 

 

 

July 15

1132

Global Stationeries

 

 

 

 

 

40 Ink Pads @ Rs 8 each

 

320

 

 

 

50 Files @ Rs 10 each

 

500

 

 

 

20 Colour Books @ Rs 20 each

 

400

 

 

 

 

 

1,220

 

 

 

Less: Trade discount 5%

 

(61)

1,159

 

 

 

 

 

 

July 25

1111

Mumbai Traders

 

 

 

 

 

10 Paper Rim @ Rs 100 each

 

1,000

 

 

 

400 Drawing Sheet @ Rs 3 each

 

1,200

 

 

 

20 Packet Water Colour @ Rs 40 per pack

 

800

3,000

 

 

 

 

 

 

 

 

Purchases Account

 

 

8299

 

 

 

 

 

 

 

Note: Furniture purchased from Lamba Traders will not be recorded in the Purchases Book as furniture is not to be considered as goods for the M/s Gupta Trader. This is because as per the transactions M/s. Gupta traders deals in stationery and not in furniture.

 

Note: Slight change in the Performa of subsidiary book is done. Here ‘Details’ column has been added in Purchase Book.

 

 



Page No 157:

Question 14:

Enter the following transactions in sales (journal) book of M/s. Bansal electronics:

September

01

Sold to Amit Traders as per bill no.4321

 

20 Pocket Radio @ 70 per Radio

 

2, T.V. set, B&W.(6.) @ 800 Per T.V.

 

10. Sold to Arun Electronics as per bill no.4351

 

5 T.V. sets (20.) B&W @ Rs 3,000 per T.V.

 

2 T.V. sets (21.) Colour @ Rs 4,800 per T.V.

22

Sold to Handa Electronics as per bill no.4,399

 

10 Tape recorders @ Rs 600 each

 

5 Walkman @ Rs 300 each

28

Sold to Harish Trader as per bill no.4430

 

10 Mixer Juicer Grinder @ Rs 800 each.

 

 

Answer:

Books of M/s. Bansal Electronics

Sales Book

Date

Bill No.

Name of the Customer

 (Accounts to be debited)

L.F.

Details

Rs

Amount

 Rs

 

 

 

 

 

 

Sept.01

4321

Amit Traders

 

 

 

 

 

20 Pocket Radio @ Rs 70 Per Radio

 

1,400

 

 

 

2 T.V. Set, B&W (6") @ Rs 800 per T.V.

 

1,600

3,000

 

 

 

 

 

 

Sept.10

4351

Arun Electronics

 

 

 
 

 

5 T.V. sets (20") B&W @ Rs 3,000 per T.V.

 

15,000

 
 

 

2 T.V. sets (21") Colour @ Rs 4,800 per T.V.

 

9,600

24,600

 

 

 

 

   

Sept.22

4399

Handa Electronics

 

   
 

 

10 Tape Recorders @ Rs 600 each

 

6,000

 
 

 

5 Walkman @ Rs 300 each

 

1,500

7,500

 

 

 

 

   

Sept.28

4430

Harish Traders

 

   
 

 

10 Mixer Juicer Grinder @ Rs 800 each

 

8,000

8,000

 

 

 

 

 

 

 

 

Sales Account

 

 

43,100

           

 

 

Page No 157:

Question 15:

Prepare a purchases return (journal) book from the following transactions for April 2017.

 

 

Rs

05

Returned goods to M/s Kartik Traders

1,200

10

Goods returned to Sahil Pvt. Ltd.

2,500

17

Goods returned to M/s Kohinoor Traders for list price Rs 2,000 less 10% trade discount.

 

28

Return outwards to M/s Handa Traders

550

 

 

Answer:

 

Purchases Return Book

Date

Debit Note No.

Name of Supplier

 (Account to be debited)

 

L.F.

Amount

Rs

2017

 

 

 

 

 

Apr. 05

 

M/s Kartik Traders

 

 

1,200

Apr. 10

 

Sahil Pvt. Ltd.

 

 

2,500

Apr. 17

 

M/s Kohinoor Trader

 

 

 

 

 

List Price

2,000

 

 

 

 

Less: 10% Trade discount

(200)

 

1,800

Apr. 28

 

M/s Handa Traders

 

 

550

 

 

 

 

 

 

 

 

Purchases Return Account

 

6,050

 

 

 

 

 

 

                 

 



Page No 158:

Question 16:

Prepare Return Inward Journal (Book) from the following transactions of M/s Bansal Electronics for July 2017:

 

 

Rs

04

M/s Gupta Traders returned the goods

1,500

10

Goods returned from M/s Harish Traders

800

18

M/s Rahul Traders returned the goods not as per specifications

1,200

28

Goods returned from Sushil Traders

1,000

 

Answer:

Sales Return Book

Date

Credit Note

 No.

Name of Customer

(Account to be credited)

L.F.

Amount

Rs

2017

   

 

 

Jul.04

 

M/s Gupta Traders

 

1,500

Jul.10

 

M/s Harish Traders

 

800

Jul.18

 

M/s Rahul Traders

 

1,200

Jul.28

 

Sushil Traders

 

1,000

 

 

 

 

 

 

 

Sales Return Account

 

4,500

 

 

 

 

 

 

 

Page No 158:

Question 17:

Prepare proper subsidiary books and post them to the ledger from the following transactions for the month of February 2017:

 

 

Rs

01

Goods sold to Sachin

5,000

04

Purchase from Kushal Traders

2,480

06

Sold goods to Manish Traders

2,100

07

Sachin returned goods

600

08

Returns to Kushal Traders

280

10

Sold to Mukesh

3,300

14

Purchased from Kunal Traders

5,200

15

Furniture purchased from Tarun

3,200

17

Bought of Naresh

4,060

20

Return to Kunal Traders

200

22

Return inwards from Mukesh

250

24

Purchased goods from Kirit & Co. for list price of

5,700

 

less 10% trade discount

 

25

Sold to Shri Chand goods

6,600

 

less 5% trade discount

 

26

Sold to Ramesh Brothers

4,000

28

Return outwards to Kirit and Co.

1,000

 

less 10% trade discount

 

28

Ramesh Brothers returned goods Rs 500.

 

 

 

Answer:

Journal

Purchases Book

Date

Invoice

No.

Name of Supplier

 (Accounts to be credited) 

L.F.

Amount

 Rs

2017

     

 

 

Feb.04

 

Kushal Traders

 

 

2,480

Feb.14

 

Kunal Traders

 

 

5,200

Feb.17

 

Naresh

 

 

4,060

Feb.24

 

Kirit and Co.

5,700

 

 

 

 

Less: Trade Discount 10%

(570)

 

5,130

 

 

 

 

 

 

 

 

Purchases Account

 

 

16,870

 

 

 

 

 

 

  

Sales Book

Date

Invoice

No.

Name of Customer

(Accounts to be debited)

L.F.

Amount

 Rs

2017

     

 

 

Feb. 01

 

Sachin

 

 

5,000

Feb.06

 

Manish Traders

 

 

2,100

Feb.10

 

Mukesh

 

 

3,300

Feb.25

 

Shri Chand

6,600

 

 

   

Less: 5% Trade Discount

(330)

 

6,270

Feb.26

 

Ramesh Brothers

 

 

4,000

   

 

 

 

 

 

 

Sales Account

 

 

20,670

 

 

 

 

 

 

  

Sales Return Book

Date

Credit

Note

Name of Customer

 (Accounts to be credited)

L.F.

Amount

 Rs

2017

     

 

Feb.07

 

Sachin

 

600

Feb.22

 

Mukesh

 

250

Feb.28

 

Ramesh Brothers

 

500

   

 

 

 

 

 

Sales Return Account

 

1,350

 

 

 

 

 

 

 

Purchases Return Book

Date

Debit

Note

Name of Supplier

(Accounts to be debited) 

L.F.

Amount

Rs

2017

     

 

 

Feb.08

 

Kushal Traders

 

 

280

Feb.20

 

Kunal Traders

 

 

200

Feb.28

 

Kirit and Co.

1,000

 

 
   

Less: 10% Trade Discount

(100)

 

900