Financial Accounting -Basics

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Financial Accounting:

Financial Accounting Journal, Ledger & Trial Balance Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 1

Journalize the following transactions, post them into the Ledger and prepare Trial balance of the same. ( Illustration 4.1, p.35-p38, An Introduction to Accountancy by S.N Maheswari) :

Journalize the following transactions, post them into the Ledger and prepare Trial balance of the same. ( Illustration 4.1, p.35-p38, An Introduction to Accountancy by S.N Maheswari ) Ram started business with a capital of Rs. 10,000 He purchased goods from Mohan on credit worth Rs. 2,000 He Paid cash to M ohan Rs. 1,000 He sold goods to S uresh R s. 2,000 He received cash from sureshRs.3,000 He further purchased goods from Mohan Rs.2,000 He paid cash to Mohan Rs. 1,000 He further sold goods to Suresh Rs. 2,000 He received cash from Suresh Rs. 1,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 2

Journal Entries:

Journal Entries Date Particulars LF Debit Amount (Rs.) Credit Amount (Rs.) Jan. 01 Cash Account Dr. To Capital Account ( Being Commencement of Business) 10,000 10,000 02 Purchase Account Dr. To Mohan Account (Being purchase of goods on credit) 2,000 2,000 03 Mohan Account Dr. To Cash Account (Being Payment of cash to Mohan) 1,000 1,000 04 Suresh Account Dr. To Sales (Being Goods sold to Suresh) 2,000 2,000 05 Cash Account Dr. To Suresh Account ( Being cash received from Suresh) 3,000 3,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 3

…….Journal Entries:

…….Journal Entries Date Particular LF Debit Amount (Rs.) Credit Amount (Rs.) 06 Purchase Account Dr. To Mohan Account (Being purchase of goods from Mohan) 2,000 2,000 07 Mohan Account Dr. To Cash Account (Being payment of Cash to Mohan) 1,000 1,000 08 Suresh Account Dr. To Sales Account ( Being goods sold to Suresh) 2,000 2,000 09 Cash Account Dr. To Suresh Account (Being cash received from Suresh) 1,000 1,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 4

Ledger Posting Cash Account:

Ledger Posting Cash Account Date Particulars Amount Date Particular Amount To Capital A/C 10,000 By Mohan 1,000 To Suresh 3,000 By Mohan 1,000 To Suresh 1,000 Jan. 31 st By Balance 12,000 14,000 14,000 Feb. 1 st To Balance b/d 12,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 5

Capital Account:

Capital Account Date Particulars Amount Date Particular Amount Jan.31 To Balance c/d 10,000 By Cash Account 10,000 10,000 10,000 Feb.1 st By Balance b/d 10,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 6

Purchase Account:

Purchase Account Date Particulars Amount Date Particular Amount To Mohan A/C 2,000 Jan. 31 st By Balance c/d 4,000 To Mohan A/C 2,000 4,000 4,000 Feb. 1 st To Balance b/d 4,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 7

Mohan Account:

Mohan Account Date Particulars Amount Date Particular Amount To Cash 1,000 By Purchase A/c 2,000 To Cash 1,000 By Purchase A/C 2,000 Jan 31 st To balance c/d 2,000 4,000 4,000 Feb. 1 st By Balance b/d 2,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 8

Suresh Account:

Suresh Account Date Particulars Amount Date Particular Amount To Sales 2,000 By Cash 3,000 To Sales 2,000 By Cash 1,000 4,000 4,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 9

Sales Account:

Sales Account Date Particulars Amount Date Particular Amount Jan 31 st To Balance c/d 4,000 By Suresh A/C 2,000 By Suresh A/C 2,000 4,000 4,000 Feb. 1 st By Balance b/d 4,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 10

Trial Balance:

Trial Balance Particulars Debit Amount Credit Amount Cash Account 12,000 Capital Account 10,000 Purchases Account 4,000 Mohan Account 2,000 Sales Account 4,000 Suresh Account Nil Nil TOTAL 16,000 16,000 Dr. Punit K. Dwivedi Prestige Institute of Management & Research, Indore 11

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