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Transactions

Names of A/c

Two Effects

Type of A/c

Purchased goods for cash Rs. 25,000.

Purchases A/c Cash Purchase is an expense


A/c
Cash has gone out

Nominal A/c
Real A/c

Paid salary Rs. 4,000 to Mr. Nikhil.

Salary A/c
A/c

Cash Salary is an expense


Cash has gone out

Nominal A/c
Real A/c

Sold goods of Rs. 15,000.

Cash A/c
A/c

Sales Cash has come in


Sales is an income

Purchased machinery for Rs. 75,000.

Received commission Rs. 350.

Machinery A/c
Cash A/c
Cash A/c
Commission A/c

Machinery has come in


Cash has gone out
Cash has come in
Commission is an income

Real A/c
Nominal A/c
Real A/c
Real A/c
Real A/c
Nominal A/c

Deposited in bank A/c Rs. 10,000.

Bank A/c
A/c

Cash Bank is the receiver


Cash has gone out

Withdrew from bank Rs. 2,500.

Cash A/c
A/c

Bank Cash has come in


Bank is the giver

Purchased goods from Mr. Tejas of Rs. 3,000 on credit.

Purchases A/c M/s Purchase is an expense


Tushar A/c
M/s Tushar is the giver

Nominal a/c
Persoanl A/c

Sold goods to Mr. Swaroop of Rs. 50,000.

Ramesh A/c
Sales A/c

Persoanl A/c
Nominal A/c

Ramesh is the receiver


Sales is an income

Personal A/c
A/c

Real

Real A/c
Personal A/c

Rule Applied

Effect Dr/Cr

Debit Expenses and Losses Credit


what goes out

Debit
Credit

Debit Expenses and Losses Credit


what goes out

Debit
Credit

Debit what comes in


Credit
incomes and gains

Debit
Credit

Debit what comes in


what goes out

Credit

Debit
Credit

Debit what comes in


incomes and gains

Credit

Debit
Credit

Debit the receiver


what goes out

Credit

Debit
Credit

Debit what comes in


the giver

Credit

Debit
Credit

Debit Expenses and Losses Credit


the giver

Debit
Credit

Debit the receiver


Credit
incomes and gains

Debit
Credit

In the Book of Mr. Mahendra

Journ
September, 2009

Date

01.09.09

Particular
Cash A/c
Capital A/c
brought into business)

Dr.
Cr.

Dena Bank A/c

Purchases A/c

18.09.09

23.09.09

29.09.09

Dr.
To Cash A/c
(Being goods purchased for cash)

Cr.

12.09.09

Sundry Expenses A/c


Cr.

Cash A/c
Sales A/c
for cash)
Salaries A/c
A/c

To
(Being cash

Dr.
To Cash A/c
(Being cash deposited into bank)

Cr.

06.09.09

L/F

Dr.
To Cash A/c
(Being sundry expenses paid)

Dr.
Cr.

Cr.

To
(Being goods sold

Dr.
To Dena Bank
(Being salaries paid by cheque)

__

__

__

__

__

__

Journal Entries for the month of

Dr. Amt.

Cr. Amt.

9,000
9,000
4,000
4,000
3,000
3,000
350
350
4,000
4,000
1,200
1,200

1) SIMPLE CASH BOO


Dr.
DATE

RECEIPT NO.

RECEIPTS

L/F

AMOUNT Rs.

PLE CASH BOOK


Cr.
DATE

VOUCHER NO.

PAYMENTS

L/F

AMOUNT Rs.

2) TWO COLUMN CA
Dr. (Receipts)
DATE

R. No.

PARTICULAR

L/F

DISCOUNT Rs.

2) TWO COLUMN CASH BOOK

(Paymen
AMOUNT Rs.

DATE

V. No.

PARTICULAR

L/F

(Payments) Cr.
DISCOUNT Rs.

AMOUNT Rs.

3) THREE COLUM
Dr. (Receipts)
DATE

R.NO.

PARTICULAR

L/F

DISCOUNT

Rs.

CASH
Rs.

THREE COLUMN CASH BOOK

(Pay
BANK

Rs.

DATE

V.NO.

PARTICULAR

L/F

DISCOUNT

Rs.

(Payments) Cr.
CASH
Rs.

BANK

Rs.

4) ANALYTICAL

AMOUNT
RECEIVED Rs.

C.B.F.

DATE

PARTICULAR

TOTAL
PAYMENTS Rs.

4) ANALYTICAL PETTY CASH BOOK


Printing &
Stationery
Rs.

Carriage &
Postage &
Freight
Telegram
Rs.
Rs.

Conveyance &
Travelling Rs.

Wages

Rs.

Sundry Expenses
Rs.

L/F

Ledger A/c Rs.

TRIAL BALANCE
Sr. No.

Name of the Account

Balance of
Accounts

Nominal Accounts:
i) All expenses & losses like rent, salary,
wages, bad debts, commission and
discount given etc.

DEBIT

ii) All incomes and gains like dividend


received, commission & dividend received

CREDIT

Real Accounts:
Assets and properties e.g. Land &
Building, Plant & Machinery, Furniture, Bills
Receivable etc.

DEBIT

Personal Accounts:
i) If personal accounts shows a debit
balance, it means amount is due from that
person, so it is treated as a debtor.

DEBIT

3
ii) If personal account shows a credit
balance, it means amount is payable to
him, so it is treated as Creditors
Others important items:
i) Capital

ii) Purchase of goods

CREDIT

CREDIT

DEBIT

4
iii) Sale of goods

CREDIT

iv) Purchase Return (Return Outward)

CREDIT

v) Sales Return (Return Inward)

DEBIT

CE
Why ?

Debit all expenses and losses

Credit all incomes and gains

Debit what comes in

Amount due from others, it means


debtors, are treated as assets.

Amount payable to outsiders, it


means creditors, it is a liability
Amount invested by proprietor in to
business. It is a liability for business.
Credit all liabilities
Expense

Income
Goods goes out
Goods comes in

Specimen for Trial Balance


1) Journal Form
Sr.No.

Particulars

L/F

Debit

Rs.

1)

_____

2)

_____

3)

_____

XXXXX

4)

_____

XXXXX

5)

_____

XXXXX

TOTAL

XXXXX

2) 'T' Form (Ledger Form


Sr. No.

Particulars

L/F

Debit

Rs.

1)

_____

XXXXX

2)

_____

XXXXX

3)

_____

XXXXX

4)

_____

XXXXX

5)

_____

XXXXX

TOTAL

XXXXX

Credit

Rs.

XXXXX

XXXXX
XXXXX

orm (Ledger Form)


Sr. No.

Particulars

L/F

Credit

Rs.

1)

_____

XXXXX

2)

_____

XXXXX

3)

_____

XXXXX

4)

_____

XXXXX

5)

_____

XXXXX

TOTAL

XXXXX

Specimen for Trading Account


Dr.

Trading Account for the year ended 31st March, 2009


Particulars

Amount

Rs.

To Opening Stock
To Purchases
Purchases Return
Outwards)

Amount

Rs.
XXXXX

Less (Return

XXXXX
XXXXX

XXXXX

To Direct Expenses

XXXXX

To Freight & Carriage Inward

XXXXX

To Custom & Insurance

XXXXX

To Wages

XXXXX

To Coal, Gas, Fuel & Water

XXXXX

To Factory Expenses

XXXXX

To Royalty

XXXXX

To Gross Profit c/f

XXXXX
XXXXX

Cr

for Trading Account

ed 31st March, 2009

Cr.
Particulars

By Sales
Sales Return
Inwards)

Less (Return

Amount

Rs.

Amount

Rs.

XXXXX
XXXXX
XXXXX

By Closing Stock

XXXXX

By Gross Loss c/f

XXXXX

XXXXX

Specimen for Profit & Loss Account


Dr.
Particulars

Profit & Loss Account for the year ended 31st March, 2009
Amount

Rs. Amount

To Gross Loss b/d (if any)


To Salaries

Rs.

XXXXX
XXXXX

XXXXX

To Rent, rates & taxes

XXXXX

To Insurance Premium

XXXXX

To Bank Charges

XXXXX

To Discount Allowed

XXXXX

To Audit Fees

XXXXX

To Depreciation on each asset (if any)

XXXXX

To Travelling Exp.

XXXXX

To Advertising

XXXXX

To Printing & Stationery

XXXXX

To Interest Paid

XXXXX

To Loss by Fire / Theft

XXXXX

To Packing Exp.

XXXXX

To Commission

XXXXX

To Net Profit
capital a/c)

(transfered to

XXXXX
XXXXX

or Profit & Loss Account

unt for the year ended 31st March, 2009


Particulars

Cr.
Amount

Rs.

Amount

Rs.

By Gross Profit b/d (if any)

XXXXX

By Commission Received

XXXXX

By Discount Received

XXXXX

By Interest on Investment

XXXXX

By Interest on Bank Deposits

XXXXX

By Miscellaneous Income

XXXXX

By Net Loss
capital a/c)

XXXXX

(transfered to

XXXXX

Specimen for Balance Sheet


Balance Sheet for the year ended 31st March, 2009
Liabilities
Capital A/c
Add - Net Profit

Amount

Rs. Amount

Assets

Rs.

XXXXX

Cash in Hand

XXXX

Cash at Bank

Less - Net Loss (if any)

(XXXX)

Less - Drawings (if any)

(XXXX)

Rs.

Prepaid Expenses (if any)


XXXXX Investments (if any)

Reserves

Bills Receivable (if any)

Bills Payable

XXXXX Sundry Debtors


Bad Debts
XXXXX

Creditors

XXXXX

Bank Loans

XXXXX Closing Stock

Personal Loan

XXXXX Furniture & Fixtures

Bank Overdraft

XXXXX Plant & Machinery

Outstanding Expenses

Amount

Land & Building


Goodwill
XXXXX

Less Less - R.D.D

XXXXX
(XXXX)
(XXXX)

Amount

Rs.
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX

XXXXX

XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX

Adjustments Effects
Sr.No.

Adjustment

1st Effect

Closing Stock (at cost or market price whichever is


less)

Trading A/c - Credit Side

Outstanding Expeneses - Direct Exp. Eg. Wages, factory


rent etc.

Trading A/c - Debit Side


respective exp.)

Outstanding Expeneses - Indirect Exp. Eg. Salary, Rent,


Printing etc.

Profit & Loss A/c - Debit Side


respective exp.)

(add to the

(add to the

Prepaid Exp.Direct Exp.


Wages, factory rent etc.

Eg.

Trading A/c - Debit Side


(deduct from
the respective exp.)

Prepaid Exp.Indirect Exp.


Salary, Rent, Insurance etc.

Eg.

Profit & Loss A/c - Debit Side


from the respective exp.)
Profit & Loss A/c - Debit Side
depreciation)

(deduct

(only amount of

Depreciation on Assets

Bad Debts & R.D.D

Balance sheet - Asset Side


(less bad debts
first then less % of R.D.D)

Income received in advance

Profit & Loss A/c - Credit Side (deduct from the


respective income)

s
2nd Effect
Balance Sheet - Asset Side
Balance sheet - Liability Side (outstanding
amount only)
Balance sheet - Liability Side (outstanding
amount only)
Balance Sheet - Asset Side (prepaid amount
only)
Balance Sheet - Asset Side (prepaid amount
only)
Balance Sheet - Asset Side
(deduct from
the respective asset)
Profit & Loss A/c - Debit Side (add new bad
debts into old)
Balance sheet - Liability Side (advanced
amount only)