GSEB Class 11 Solutions Chapter 8 Journal Proper

 

Question 1. Write the correct option from those given below each question :
1. Transactions which are not recorded in other subsidiary books are recorded in
(a) Journal
(b) Journal proper
(c) Cash book
(d) Other book
Answer: (b) Journal proper
In simple words: Journal proper is a special subsidiary book where transactions not suitable for other specialized ledgers are recorded.

Exam Tip: Remember that "Journal proper" serves as a residual book for entries that do not fit into specific subsidiary books like cash, sales, or purchases.

 

Question 1. Write the correct option from those given below each question :
2. __________ is not included in subsidiary book.
(a) Sales book
(b) Petty cash book
(c) Ledger
(d) Debit note
Answer: (c) Ledger
In simple words: A ledger is a main accounting book, not a subsidiary book. Subsidiary books record initial transactions, while the ledger compiles those into accounts.

Exam Tip: Differentiate between subsidiary books (like sales, purchase, cash, petty cash) which record original transactions, and the ledger, which summarizes these transactions into accounts.

 

Question 1. Write the correct option from those given below each question :
3. Why is it necessary to write adjustment entry at the end of the year for closing stock?
(a) To rectify the error
(b) To find true profit or loss
(c) To transfer the account
(d) To close the account
Answer: (b) To find true profit or loss
In simple words: Adjustment entries for closing stock are vital to accurately calculate a business's real profit or loss for the year.

Exam Tip: Understanding the purpose of adjustment entries, especially for closing stock, is crucial for accurate financial statement preparation.

 

Question 1. Write the correct option from those given below each question :
4. Wages of Rs 1000 paid for the installation of a new machine is debited to wages account. Which account will be affected while rectifying this error?
(a) Wages A/c and Machine A/c
(b) Only Machine A/c
(c) Only Wages A/c
(d) Cash A/c
Answer: (a) Wages A/c and Machine A/c
In simple words: To fix this error, the Wages Account needs to be reduced, and the Machine Account needs to be increased because installation costs are added to the asset's value.

Exam Tip: Remember that expenses incurred for the installation of a new asset are capitalized, meaning they are added to the asset's cost, not treated as revenue expenses.

 

Question 2. Explain journal proper with illustration.
Answer: Journal proper: Transactions not recorded in other specific subsidiary books are entered in a special subsidiary book known as Journal proper. This book helps to manage unusual or infrequent business events that don't fit into routine ledgers. When business dealings are few, only one main Journal book may be enough. However, as a business grows, the number of transactions rises significantly. In such situations, it becomes difficult to quickly get all needed information from a single book. Therefore, businesses maintain subsidiary books. Transactions that are not included in the purchase book, sales book, purchase return book, sales return book, cash book, petty cash book, bills receivable book, or bills payable book are recorded in the Journal proper. This ensures that all transactions are systematically captured.
Format: The layout of the journal proper is just like a general journal, with five columns: Date, Particular, Ledger Folio (L. F.) Number, Debit Amount (Rs), and Credit Amount (Rs).
Illustration: To start a business, Sagar brought furniture of Rs 16,000 and stock of goods of Rs 9,000 into the business on April 1, 2019.

Utility: This book is useful for specific types of transactions, for example, (1) Opening journal entry of the year, (2) Transactions of inter-account transfer, (3) Closing entries, (4) Adjustment entries, (5) Rectification entries, and (6) Transactions not included in other subsidiary books.
In simple words: Journal proper is a special book for recording business transactions that don't fit into other main accounting books. It's used for things like starting entries, moving money between accounts, end-of-year adjustments, fixing mistakes, and other unusual events. This helps keep all financial records organized, especially as a business grows.

Exam Tip: Clearly define Journal Proper and list its primary uses, emphasizing its role in capturing transactions that do not belong to other specialized subsidiary books. Include a simple illustration to demonstrate its format.

 

Question 3. Explain the classifications of the transactions recorded in the journal proper.
Answer: The classification of transactions that are necessary to be recorded in journal proper is as follows:

Explanation:
(1) Opening journal entry: When a business begins, the owner brings certain assets into the business. These transactions are recorded in the journal proper through a special journal entry in the business books. For example, to start a business, Hashmukh brought cash Rs 9,000, stock of goods Rs 6,000, and debtors Rs 5,000 into the business on April 1, 2019.
[Note: Since other subsidiary books are kept by the business, cash Rs 9,000 brought by the proprietor should have been recorded in the cash book. Therefore, this cash transaction will not be shown in the journal proper.]
(2) Transactions of inter-account transfer: If an amount needs to be transferred from one account to another, or if a total amount must be moved by closing an account, a special entry called an Inter-account transfer entry is passed. For example, transferring a receivable amount to another account, or closing the drawings account or entry of depreciation of an asset, are all known as inter-account transfer entries.
For instance, the balance of the drawings account, Rs 6,300, on March 31, 2019, needs to be transferred to the capital account. This will be recorded in the journal proper as follows:
(3) Closing entry: At the end of the financial year, accounts related to goods and incomes/expenses are closed by moving their balances to either the trading account or the profit and loss account. Accounts for goods and purchase expenses are transferred to the trading account. Accounts for expenses and incomes other than purchases are transferred to the profit and loss account. Entries are passed to transfer the gross profit or gross loss to the profit and loss account, and net profit or net loss to the capital account. All these entries are called Closing entries. In short, a closing entry means an entry made to close an account.
For instance, the closing balance of the purchase account is Rs 67,500 and the discount allowed account is Rs 900 on March 31, 2019. The entries for closing these accounts will be as follows:
(4) Adjustment entry: Final accounts are prepared to show the actual and fair financial position and results of a business. For this, an adjustment entry is necessary.
For example, on March 31, 2019, the closing stock was Rs 42,000. The entry for this will be as follows:
[Note: Closing entries and adjustment entries are discussed in detail in the final account chapter (Part 2).]
(5) Rectification entry: Mistakes made during account preparation are kept as they are, instead of being erased or canceled. To fix these errors, an entry called a Rectification entry is passed.
For example, on March 31, 2019, a salary amount of Rs 2,500 paid to accountant Shri Mafatbhai was mistakenly debited to Mafatbhai's account. The rectification entry for this error will be as follows:
[Note : Rectification entry is discussed in detail in Chapter 1, Rectification of Errors (Part 2).]
(6) Transactions which are not included in other subsidiary books: We previously learned how transactions are recorded in various subsidiary books. Transactions that cannot be recorded in these other subsidiary books are entered in the journal proper. For instance, transactions related to bad debts, endorsement of bills, goods destroyed by fire or accident, goods given as charity, goods going out by any means, dishonor of bills, and assets purchased on credit are all recorded here.
For example, in 2019:
April 1: A receivable amount of Rs 1,800 from Narendrabhai is to be written off.
April 3: Goods worth Rs 700 were burnt in a fire.
Entries for these transactions are as follows:
In simple words: The journal proper categorizes transactions into six types: initial entries when a business starts, transfers between different accounts, entries to close accounts at year-end, adjustments needed for correct financial reports, corrections for errors made, and any transactions that don't fit into other specialized record books. Each type has specific examples and journal entries to follow.

Exam Tip: Memorize the six main classifications of transactions handled by the journal proper. For each classification, be ready to provide a brief explanation and a relevant journal entry example, ensuring correct debit and credit usage.

 

Question 4. Dhrumil Kamani starts business with following assets and liabilities on Dt. 1 - 1 -'15. Write opening journal proper.
Cash Rs 18,000; Bank balance Rs 12,000; Furniture Rs 15,000; Stock of goods Rs 20,000; Personal debtors Rs 5,000 and 12 % Loan from Mayaben Rs 10,000.
Note: Record cash and bank balance in cash book.
Answer:

In simple words: When Dhrumil Kamani started his business on Jan 1, 2015, he brought in furniture, goods, and debtors. He also took a loan from Mayaben. We record these items in the journal, with assets on the debit side and liabilities and capital on the credit side. Cash and bank amounts are not included here because they go into the cash book.

Exam Tip: For opening journal entries, always identify all assets and liabilities. Remember that cash and bank balances for a new business are typically recorded directly in the cash book, not the journal proper, if a cash book is maintained.

 

Question 5. Shri Gujarat Stores does not maintain separate subsidiary books for transactions of bill receivable, bill payable, purchase returns and sales returns. Record the following transactions in the journal proper:
(1) Drew a bill of Rs 8,000 on Ramnik which he accepted and returned.
(2) Accepted a bill of Rs 3,000 drawn by Vijay and returned to him.
(3) Bill receivable of Ramnik endorsed to Ramesh.
(4) Goods of Rs 3,000 returned by Paresh to us.
(5) Goods of Rs 1,500 returned to Mahendra.
Answer:

In simple words: Since Shri Gujarat Stores doesn't keep separate books for bills or returns, all these transactions go into the journal proper. This includes recording bills receivable and payable, endorsing a bill, and handling both sales returns and purchase returns. Each entry shows what account is debited and what is credited.

Exam Tip: When a business does not maintain separate subsidiary books for specific types of transactions (like bills or returns), all such transactions must be recorded in the Journal Proper. Ensure you correctly identify the accounts to be debited and credited for each type of transaction.

 

Question 6. Record the following transactions in the journal proper of Rakesh:
(1) Gave goods of Rs 5,000 to Anath Ashram.
(2) Distributed goods of Rs 4,000 as free samples.
(3) Withdrew goods of Rs 8,000 from the business for the personal use.
(4) Purchased furniture of Rs 3,000 by giving goods of Rs 2,800.
(5) Goods of Rs 7,000 were destroyed by fire, for which the insurance company accepted a claim of 5,500.
(6) An amount of Rs 2,000 is receivable from Nirali, which cannot be received now.
(7) Write off depreciation on machinery Rs 800.
(8) Salary for the month of March is unpaid Rs 7,800.
Answer:

In simple words: These journal entries for Rakesh cover various non-standard transactions. They include donations of goods, free samples, personal withdrawals of goods, purchasing assets by exchanging goods, accounting for goods lost to fire and insurance claims, writing off bad debts, recording depreciation on machinery, and making an adjustment for unpaid salaries. Each entry ensures proper accounting for these specific events.

Exam Tip: For diverse transactions like charity, free samples, drawings, asset purchase against goods, and loss by fire, it is crucial to understand how to debit the expense/loss or asset account and credit the Purchases/Goods account or specific asset account accurately. Pay close attention to the impact on stock and capital.

 

Question 7. Record the following transactions in the Journal Proper of Shri Ekta:
2014
March 1 Brought furniture of Rs 7,000, goods of Rs 15,000 and machinery of Rs 20,000 to start the business.
2 Scientific calculator of Rs 2,000 and cellular phone of Rs 25,000 purchased from Kamlesh Traders.
3 Fan of Rs 2,500 purchased for household use by giving goods of Rs 3,000.
4 Drew a bill of Rs 8,000 on Namrata, which she accepted and returned.
5 Bill of Namrata endorsed to Yesha against her debt of Rs 8,050.
6 A bill of Rs 6,000 drawn by Bharat accepted by us and returned to him.
7 Goods of Rs 8,000 were stolen away from the godown, for which the insurance company accepted a claim of 75 % of the amount.
8 An amount of Rs 8,000 is receivable from Nirav and Rs 8,200 is payable to Nalin. The account of Nalin was settled by Nirav accepting to pay Rs 8,000.
9 Cash received from Rajendra for bad debt recovered Rs 2,000.
10 Rs 300 is payable to Manoj for interest.
Answer:

Note: Date 9 Cash transaction, it will be recorded in cash book.
In simple words: These journal entries for Shri Ekta cover various transactions from starting the business with assets, purchasing office supplies and a phone, personal use of goods, bill transactions (drawing, accepting, endorsing), goods stolen and insurance claims, settling debts with an allowance, and recording interest payable. Note that cash transactions (like the bad debt recovery on Date 9) are handled in the cash book.

Exam Tip: For comprehensive problems involving various types of transactions, carefully categorize each item. Pay attention to opening entries, bills of exchange (receivable and payable, endorsements), adjustments for losses, and debt settlements, ensuring each is correctly debited and credited in the journal proper.

 

Question 8. Pass journal entries for the following transactions in journal proper:
Date 10 Manoj name is given in the transaction, so Manoj A/c will be credited instead of 'Unpaid Interest A/c'.
(1) Rs 700 received from Renuka is recorded in Bhumika's account.
(2) Rs 1,000 received from Updesh for bad debt written off in past, which is credited to Updesh's account.
(3) Rs 800 paid to Sharma is debited to Varma's account.
(4) Rs 1,200 paid for insurance premium is debited to drawings account.
(5) Old furniture of Rs 6,000 of business sold for Rs 5,800.
Answer:

In simple words: These journal entries are mainly about fixing errors and recording specific events in the journal proper. They include correcting wrong account credits for cash received, rectifying incorrect debits for payments, adjusting an insurance premium debited to drawings, and recording the loss from selling old furniture. This helps ensure all accounts are correct.

Exam Tip: When correcting errors, always analyze the original incorrect entry and then determine the necessary rectification entry to reverse the wrong effect and record the correct one. For asset sales, calculate any profit or loss accurately.

 

Question 9. Pass journal entries for closing the following account:
(1) Interest Expense account Rs 1,000
(2) Sales Return account Rs 3,000
(3) Purchase Return account Rs 2,000
(4) Interest Received account Rs 800
(5) Advertisement Expense account Rs 1,500
(6) Salary Account Rs 4,000
(7) Dividend Received account Rs 700
(8) Purchase account Rs 5,000
(9) Sales account Rs 10,000
Answer:

In simple words: These journal entries show how different accounts are closed at the end of an accounting period. Expenses like interest, advertising, and salary are transferred to the Profit and Loss Account, while sales returns, purchase returns, purchases, and sales are moved to the Trading Account. Income accounts like interest received and dividend received are also transferred to the Profit and Loss Account to determine the final profit or loss.

Exam Tip: When making closing entries, remember to transfer all nominal accounts (expenses, incomes, gains, and losses) to either the Trading Account or the Profit & Loss Account. Direct expenses and incomes related to goods go to Trading A/c, while indirect ones go to Profit & Loss A/c.