Maharashtra Board Class 11 Commerce BK Chapter 3 Journal Solutions

Class 11 Commerce BK Chapter 3 Exercise Solutions

 

1A. Answer in One Sentence:

 

Question 1. What is Journal?
Answer: Journal is a book of account in which all types of day-to-day business transactions are recorded in chronological order. It serves as the primary book of entry where transactions are first written down before being posted to the ledger.
In simple words: A journal is like a daily diary for a business where every financial transaction is written down in the order it happens.

🎯 Exam Tip: Always mention the term 'chronological order' as it is a key term that examiners look for when defining a Journal.

Question 2. What is Narration?
Answer: Explanation of transaction which is written just below the accounting entry in the particular column is called narration. It helps anyone reading the books of accounts to quickly understand the nature and purpose of that specific entry.
In simple words: Narration is a short note written below a journal entry. It explains what the transaction was about in plain language.

🎯 Exam Tip: Always start a narration with the word "Being" to follow standard accounting practices and secure full marks.

 

Question 3. What is GST?
Answer: GST is an abbreviated form of Goods and Service Tax that is levied by the Government on specific goods and services in the place of different taxes levied earlier. This unified tax system was introduced to simplify the taxation process across the entire country.
In simple words: GST stands for Goods and Services Tax. It is a single tax that replaced many older taxes on things we buy and services we use.

🎯 Exam Tip: Remember that GST is an indirect tax, meaning it is collected by businesses from customers and then paid to the government.

 

Question 4. In which year GST was imposed by the Central Government of India?
Answer: In the year 2017 GST was imposed by the Central Government of India. Specifically, it came into effect on July 1st of that year, marking a major economic reform.
In simple words: The Indian government started charging GST in the year 2017. It replaced older taxes to make business transactions smoother.

🎯 Exam Tip: Memorize the exact date, July 1, 2017, as it is frequently asked in objective-type questions.

 

Question 5. What is meant by simple entry?
Answer: An entry in which only two accounts are affected viz. one account is debited and the other account is credited is called simple entry. This is the most basic form of recording a transaction in double-entry bookkeeping.
In simple words: A simple entry is a journal entry that involves only two accounts. One account gets debited, and the other gets credited.

🎯 Exam Tip: When writing a simple entry, ensure that the debit amount exactly equals the credit amount.

 

Question 6. What is the meaning of combined entry?
Answer: A journal entry that combines more than one debit or more than one credit or both is called a combined/compound entry. This type of entry is highly efficient as it saves time and space when recording related transactions occurring on the same date.
In simple words: A combined entry is a single journal entry that deals with three or more accounts at the same time. It helps record multiple related transactions together.

🎯 Exam Tip: In a combined entry, always double-check that the total of all debits equals the total of all credits.

 

Question 7. Which account is debited, when rent is paid by Debit card?
Answer: The rent account is debited when rent is paid by debit card. This is because rent is an expense, and according to nominal account rules, all expenses must be debited.
In simple words: When you pay rent using a debit card, you debit the Rent Account because it is an expense. The Bank Account is credited because money is going out.

🎯 Exam Tip: Remember that paying by debit card directly affects the Bank Account, not the Cash Account.

Question 8. Which discount is not recorded in the books of account?
Answer: Trade discount is not recorded in the books of the account. This is because trade discount is deducted directly from the catalog price before the transaction is recorded.
In simple words: Trade discount is a reduction in price given at the time of purchase, so we only record the final net price in our accounts.

🎯 Exam Tip: Remember that only cash discount is recorded in the ledger, while trade discount is directly deducted from the invoice value.

 

Question 9. In which order monthly transactions are recorded in a Journal?
Answer: In chronological (date wise) order monthly transactions are recorded in the journal. This systematic recording ensures that no transaction is missed and can be easily tracked later.
In simple words: Transactions are written down in the order they happen, day by day, just like a diary.

🎯 Exam Tip: Always write the date clearly in the date column of the journal to maintain chronological order.

 

Question 10. Which account is credited, when goods are sold on credit?
Answer: Sales account is credited, when goods are sold on credit. This credit entry represents the revenue earned by the business from the sale.
In simple words: When we sell goods, our sales increase, so we credit the Sales Account to show this income.

🎯 Exam Tip: In credit sales, credit the Sales Account and debit the customer's (debtor's) account.

 

Give One Word/Term or Phrase for Each of the Following Statements:

 

Question 1. A book of prime entry.
Answer: Journal. It is the very first book where daily financial transactions are written down.
In simple words: A journal is the first notebook where a business writes down every transaction as soon as it happens.

🎯 Exam Tip: "Journal" is the fundamental book of original entry; make sure to spell it correctly.

 

Question 2. The tax imposed by Central Government on Goods and Services.
Answer: GST. This unified tax system simplifies the taxation process across the entire country.
In simple words: GST is a single tax that people pay when they buy goods or use services.

🎯 Exam Tip: Write "GST" as the standard term, but remember it stands for Goods and Services Tax.

 

Question 3. A brief explanation of an entry.
Answer: Narration. It is written in brackets right below the journal entry to explain why the entry was made.
In simple words: Narration is a short note that explains what the transaction was about so anyone reading it can understand.

🎯 Exam Tip: Always start your narration with the word "Being" to follow standard accounting practices.

 

Question 4. The process of recording transactions in the Journal.
Answer: Journalising. This process requires a thorough understanding of the rules of debit and credit.
In simple words: Journalising is the actual act of writing down the business transactions into the journal book.

🎯 Exam Tip: Do not confuse "Journal" (the book) with "Journalising" (the action or process of writing in it).

 

Question 5. The French word from which the word Journal is derived.
Answer: Jour. This word literally means 'day', which explains why a journal is a daily record of business transactions.
In simple words: The word 'Journal' comes from the French word 'Jour', which means 'day'. So, a journal is simply a daily record of business transactions.

🎯 Exam Tip: Remember that 'Jour' means day, which helps in understanding why a journal is used for daily entries.

 

Question 6. Concession is given for immediate payment.
Answer: Cash discount. This financial incentive encourages customers to pay their bills promptly.
In simple words: A cash discount is a price reduction given to customers if they pay their bills quickly. It helps businesses collect cash faster.

🎯 Exam Tip: Do not confuse cash discount with trade discount; cash discount is specifically given to encourage quick cash payments.

 

Question 7. Entry in which more than one accounts are be debited or credited.
Answer: Combined Entry. This method helps in saving time and space in the journal books.
In simple words: A combined entry is a single journal entry that records multiple debits or credits at the same time. It makes bookkeeping much quicker.

🎯 Exam Tip: Always ensure that the total debit amount equals the total credit amount in a combined entry.

 

Question 8. Anything took by the proprietor from the business for his private use.
Answer: Drawings. This reduces the owner's overall capital in the business.
In simple words: When a business owner takes cash or goods from the business for personal use, it is called drawings. It is treated as a reduction in the owner's investment.

🎯 Exam Tip: Remember that drawings are debited to the Drawings Account and ultimately deducted from the Capital Account.

 

Question 9. Tax payable to the Government on purchase of goods.
Answer: Input Tax. This tax can often be set off against the output tax collected on sales.
In simple words: Input tax is the tax a business pays when it buys goods or services. This tax can usually be deducted from the tax the business collects from its own customers.

🎯 Exam Tip: Clearly distinguish between Input Tax (paid on purchases) and Output Tax (collected on sales) to avoid calculation errors.

 

Question 10. Page number of the ledger.
Answer: Ledger Folio. It serves as a reference link between the journal and the ledger accounts.
In simple words: Ledger Folio is the page number in the ledger book where a particular account is written. It helps you easily find where a transaction was posted.

🎯 Exam Tip: Write 'L.F.' as the column header in the journal and fill it only when the entry is actually posted to the ledger.

 

3. Select the most appropriate alternative from the alternatives given below and rewrite the statements.

 

Question 1. ___________ means explanation of the transactions recorded in the Journal.
(a) Narration
Answer: (a) Narration
In simple words: A narration is a short explanation written below each journal entry to describe what the transaction was about.

🎯 Exam Tip: Always write a brief narration starting with the word 'Being' after recording every journal entry to secure full marks.

 

Question 2. ___________ discount is not recorded in the books of accounts.
(a) Trade
(b) Cash
(c) GST
(d) VAT
Answer: (a) Trade
In simple words: A trade discount is a reduction in price given at the time of purchase, so we only record the final net price in our account books rather than showing the discount itself.

🎯 Exam Tip: Remember that only cash discounts are recorded in the ledger, while trade discounts are directly deducted from the catalog price.

 

Question 3. Recording of transaction in Journal is called ___________
(a) posting
(b) journalising
(c) narration
(d) prime entry
Answer: (b) journalising
In simple words: The process of entering or writing down a business transaction in the journal book for the first time is called journalising.

🎯 Exam Tip: Do not confuse journalising with posting; journalising is entering transactions in the journal, while posting is transferring them to the ledger.

 

Question 4. Every Journal entry require ___________
(a) casting
(b) posting
(c) narration
(d) journalising
Answer: (c) narration
In simple words: A narration is a short explanation written below each journal entry so that anyone reading it can easily understand why the entry was made.

🎯 Exam Tip: Always write a clear and brief narration starting with the word "Being" to secure full marks for journal entry questions.

 

Question 6. Goods sold on credit should be debited to ___________
(a) Purchase A/c
(b) Customer A/c
(c) Sales A/c
(d) Cash A/c
Answer: (b) Customer A/c
In simple words: When we sell goods on credit, the customer becomes our debtor, so we debit their account to show they owe us money.

🎯 Exam Tip: For credit transactions, always identify the customer's personal account to debit, as no cash is received immediately.

 

Question 7. Wages paid for installation of Machinery should be debited to ___________
(a) Wages A/c
(b) Machinery A/c
(c) Cash A/c
(d) Installation A/c
Answer: (b) Machinery A/c
In simple words: Any expense paid to set up or install a new machine is considered part of the machine's cost, so it is debited to the Machinery account.

🎯 Exam Tip: Do not confuse installation wages with regular wages; installation costs are capitalized and debited directly to the asset account.

 

Question 8. The commission paid to the agent should be debited to ___________
(a) Drawing A/c
(b) Cash A/c
(c) Commission A/c
(d) Agent A/c
Answer: (c) Commission A/c
In simple words: Commission is a business expense, so we debit the Commission account to record this cost.

🎯 Exam Tip: Under nominal account rules, debit all expenses and losses. Therefore, commission paid is debited to the Commission account, not the agent's personal account.

 

Question 10. Purchase of animals for cash should be debited to ___________
(a) Livestock A/c
(b) Goods A/c
(c) Cash A/c
(d) Bank A/c
Answer: (a) Livestock A/c
In simple words: When a business buys live animals, they are considered assets and recorded under the Livestock Account rather than regular goods.

🎯 Exam Tip: Remember that animals are living assets, so they are always debited to the Livestock Account instead of the Purchases or Goods Account.

State Whether the Following Statements Are True or False With Reasons

 

Question 1. Narration is not required for each and every entry.
Answer: This statement is False. Correct statement: Narration is required for each and every entry. Reasons: Narration is a brief explanation of the Journal Entry. It is written in the bracket just below the accounting entry. By reading the narration, the reader understands the meaning and significance of accounting entry and the nature and type of business transactions. Narration should be as short as possible and it should be simple and easy to understand. This helps anyone reviewing the books to quickly grasp the purpose of the transaction without searching for external documents.
In simple words: Every journal entry must have a short explanation (narration) written below it. This helps people understand why the entry was made without any confusion.

🎯 Exam Tip: Always start your answer by clearly stating 'True' or 'False' before writing the detailed explanation to secure full marks.

 

Question 2. A journal voucher is a must for all transactions recorded in the Journal.
Answer: This statement is True. Reasons: A voucher is a document that supports a payment made by the businessmen. It is legal evidence that a certain sum of money has been paid to a specific person or party. A Journal voucher is an original or basic voucher on the basis of which business transactions are journalized in the journal. It serves as the primary written proof for every entry made in the books of accounts.
In simple words: A journal voucher is a necessary document that proves a transaction actually took place. It acts as the official evidence needed to write entries in the journal.

🎯 Exam Tip: Highlight the word 'legal evidence' in your explanation, as examiners look for this key term when grading voucher-related questions.

 

Question 3. Cash discount allowed should be debited to discount A/c.
Answer: This statement is True. Reasons: Any allowance or reduction in payment allowed by the seller to the buyer or creditor to the debtor on payment of cash is called cash discount. It is the concession given to encourage prompt payment. This financial incentive helps businesses maintain a healthy cash flow. The cash discount allowed is an expense or a loss to the receiver. Expenses or Losses are always to be debited. Cash discount allowed is an expense or loss and therefore it is debited to Discount A/c.
In simple words: When we give a discount to someone for paying quickly, it is a loss for us. Since all losses are debited in accounting, this discount is debited to the discount account.

🎯 Exam Tip: Remember the nominal account rule: "Debit all expenses and losses." Since cash discount allowed is a loss, it must be debited.

 

Question 4. Journal is a book of prime entry.
Answer: This statement is True. Reasons: Journal is the most important book of accounts. It is a book of daily records. It is the main book of accounts in which transactions are recorded for the first time from source documents. This systematic recording ensures that no transaction is missed or forgotten. Therefore this book is known as the book of original entry or first entry or prime entry. Business transactions are first entered in the journal and then they are recorded in other accounts book. For these reasons, the journal is called a book of prime entry.
In simple words: A journal is the very first place where business transactions are written down every day. Because it is the starting point of all accounting entries, it is called the book of prime entry.

🎯 Exam Tip: Use keywords like "book of original entry" and "source documents" to secure full marks when explaining why the journal is a prime entry book.

 

Question 5. Trade discount is recorded in the books of accounts.
Answer: This statement is False. Correct statement: Trade discount is never recorded in the books of accounts. Reasons: The discount which is allowed or given by the manufacturer to wholesalers and by wholesalers to retailers and retailers to customers on the bulk purchases is called trade discount. By custom or by law trade discount is calculated on the catalog or printed price of the goods. This deduction is made at the time of purchase itself. Trade discount is directly deducted from the printed price and net prices of the goods or services are recorded in the books of accounts. A trade discount is given to encourage the buyers to increase their purchases. It is given to traders to enable them to earn a sizeable profit on the printed prices.
In simple words: Trade discount is a reduction in price given for buying in bulk. Since it is deducted before the final sale price is decided, we only record the final net price in our accounts, not the discount itself.

🎯 Exam Tip: Always distinguish between trade discount and cash discount. Remember that only cash discount is recorded in the books of accounts, while trade discount is directly deducted from the invoice price.

 

Question 6. Goods lost by theft are debited to the goods account.
Answer: This statement is False.
Correct statement: Goods lost by theft is credited to the goods account.
Reasons: Goods account is a real account because unsold goods are the property of the business. If goods are purchased or acquired, the Goods account is debited and if goods are sold or lost from the business, they are credited. As per the traditional approach, goods lost means go away from the business, and whatever goes out an account of it is credited. As per the modern approach if loss of business increases account of such loss is credited in the books of account. This ensures that all losses are systematically tracked to maintain accurate financial statements.
In simple words: When goods are stolen, they leave the business, so we credit the goods account. We do not debit it because debiting would mean we received goods.

🎯 Exam Tip: Remember that goods going out of the business for any reason (like theft, fire, or free samples) are always credited to the Goods/Purchases account.

 

Question 7. If rent is paid to the landlord, the landlord’s A/c should be debited.
Answer: This statement is False.
Correct Statement: If rent is paid to the landlord, the Rent account should be debited.
Reasons: Rent paid is an expense and hence it is a nominal account. When rent is paid to the landlord, the rent account is affected and not the landlord’s account. Rent is an expense to a tenant who pays it and it is an income for the landlord. Such payment is not personally due to the landlord as there is no lending and borrowing of money between landlord and rent payer. As per the rule of nominal account, the rent account is debited because it is an expense. As cash goes out cash account is credited. This follows the fundamental accounting principle of focusing on the nature of the transaction rather than the individual receiving the payment.
In simple words: When you pay rent, it is an expense for your business, so you debit the Rent account. You only debit a person's account if they owe you money or if you are lending to them.

🎯 Exam Tip: Never debit a personal account for nominal expenses like rent, salary, or electricity, even if the name of the person receiving it is mentioned.

 

Question 8. Book Keeping records monetary and non-monetary transactions.
Answer: This statement is False.
Correct Statement: Book Keeping records only monetary transactions.
Reasons: According to the money measurement concept, in the books of accounts accountant records only those business transactions which are monetary or financial in nature and capable to be expressed in monetary terms. It means the qualitative and quantitative aspects which cannot be measured in terms of money are not recorded in the books of account personal or non-monetary transactions. This limitation ensures that the financial records remain objective and standardized across different periods.
In simple words: Bookkeeping only keeps track of things that can be measured in money, like buying a machine or paying wages. It does not record things like employee happiness or brand reputation because they don't have a direct price tag.

🎯 Exam Tip: Always highlight the 'Money Measurement Concept' when explaining why non-monetary events (like a manager's skills) are excluded from accounting books.

 

Question 9. Drawings made by the proprietor increase his capital.
Answer: This statement is False.
Correct statement: Drawings made by the proprietor decreases his capital.
Reasons: Total amount of goods and services withdrawn by the proprietor from the business from time to time for personal use or family use is called drawings. Withdrawals made by a businessman for business purpose is not treated as drawings. Drawings are always adjusted or deducted from capital. Heavy withdrawals made by a businessman for self-use reduces capital in the business. If the businessman controls the drawings more funds are made available for the development of the business. Drawing made by the proprietor reduces his capital investment. This reduction directly impacts the net worth of the business.
In simple words: When an owner takes money or goods from the business for personal use, it is called drawings, and this reduces the owner's total investment (capital) in the business.

🎯 Exam Tip: Always remember that drawings reduce capital, so any statement saying drawings increase capital is false. State the correct definition of drawings to secure full marks.

 

Question 10. GST paid on the purchase of goods Input tax A/c should be debited.
Answer: This statement is True.
Reasons: GST is abbreviated from Goods and Service Tax. GST is levied by the government on the purchases of Goods and Services at a specified rate. Since it is imposed on purchases of goods and services, it increases its cost. GST is added to the purchase price. Purchases are always debited and hence GST i.e. Input tax account is also debited along with purchases. In the case of sales of goods and services, the output tax account is credited. This systematic debiting ensures proper tracking of tax credits.
In simple words: When a business buys goods, it pays GST (Input Tax), which is an expense/asset that gets debited just like the purchases.

🎯 Exam Tip: Remember the rule: "Input GST" is debited during purchases, while "Output GST" is credited during sales.

5. Fill in the Blanks.

 

Question 1. The first book of original entry is the ___________
Answer: Journal
In simple words: The journal is the very first book where every business transaction is written down.

🎯 Exam Tip: "Book of original entry" or "primary entry" always refers to the Journal.

 

Question 2. The process of recording transaction into journal is called ___________
Answer: Journalising
In simple words: Journalising is the act of writing down business transactions in the journal book.

🎯 Exam Tip: Be careful with the spelling of "Journalising" (or "Journalizing") to avoid losing marks.

 

Question 3. An explanation of the transaction recorded in the journal ___________
Answer: Narration. It is written in brackets below the journal entry to provide a brief understanding of the transaction.
In simple words: A narration is a short note written under a journal entry to explain what the transaction was about.

🎯 Exam Tip: Always start a narration with the word 'Being' to follow standard accounting practices.

 

Question 4. ___________ discount is not recorded in the books of accounts.
Answer: Trade. This discount is deducted directly from the catalog price before recording.
In simple words: Trade discount is a price cut given at the time of purchase and is not shown separately in the account books.

🎯 Exam Tip: Remember that trade discount is deducted from the list price, and only the net amount is recorded in the journal.

 

Question 5. ___________ is concession allowed for bulk purchase of goods or for immediate payment.
Answer: Discount. Concessions encourage customers to buy more or pay quickly.
In simple words: A discount is a reduction in price given to buyers to make them buy in large quantities or pay their bills quickly.

🎯 Exam Tip: Clearly distinguish between trade discount and cash discount based on their purpose and recording rules.

 

Question 6. Every Journal Entry requires ___________
Answer: Narration. This brief explanation helps anyone reading the journal understand why the entry was made.
In simple words: Every journal entry needs a short explanation at the bottom so people know what transaction happened.

🎯 Exam Tip: Never skip writing the narration in your exam journal entries, as it carries specific marks.

 

Question 7. ___________ discount is always recorded in the books of accounts.
Answer: Cash. This type of discount is recorded because it represents an actual financial loss or gain at the time of payment.
In simple words: Cash discount is a reduction in the final payment amount and must be written down in the account books.

🎯 Exam Tip: Cash discount is calculated on the net amount payable after deducting any trade discount.

 

Question 8. ___________ is the document on the basis of which the entry is recorded in the journal.
Answer: Voucher. It acts as written evidence that a transaction actually took place.
In simple words: A voucher is a paper proof, like a bill or receipt, used to write down entries in the journal.

🎯 Exam Tip: Vouchers are essential source documents that serve as primary evidence for auditing purposes.

 

Question 9. There are ___________ parties to a cheque.
Answer: Three. These parties are the drawer (the person who writes the cheque), the drawee (the bank directed to pay), and the payee (the person who receives the money).
In simple words: There are three main people involved in a cheque: the person who writes it, the bank that pays the money, and the person who gets the money.

🎯 Exam Tip: Remember the names of the three parties: Drawer, Drawee, and Payee, as this is a very common exam question.

 

Question 10. The ___________ cheque is safer than other cheques as it cannot be encashed on the counter of the bank.
Answer: Crossed. A crossed cheque provides extra security because the payment is only transferred directly into the payee's bank account.
In simple words: A crossed cheque has two parallel lines on it, meaning the bank will only put the money into an account, not hand over cash directly.

🎯 Exam Tip: Always highlight the word 'Crossed' in fill-in-the-blank questions to make your answer stand out clearly to the examiner.

6. Specimen and Proforma

 

Question 1. Prepare specimen of Tax Invoice.
Answer:

Tax Invoice Sunil General Stores Shop no. 5 Laxmi road, Pune
Cash bill No.: _________ G.S.T. I.N. No.: _________ Name (Customer): ___________________________ Address: ___________________________________					Date: DD/MM/YYYY
Sr. No.	Particulars	HSN No.	Rate	Qty	Taxable Amount	CGST %	SGST %	Total Amount (₹)
Rupees (in words): ___________________________________ E. & O.E.					Bank Details: Bank Name: _________________ IFSC Code: _________________ A/c No.: _________________ Signature

In simple words: A tax invoice is a formal bill issued by a seller to a buyer, showing the details of goods sold, their prices, and the GST taxes applied.

🎯 Exam Tip: When drawing a specimen of a Tax Invoice, ensure you include essential components like GSTIN, HSN code, CGST/SGST columns, and bank details to secure full marks.

 

Question 2. Prepare specimen of Receipt.
Answer:

RECEIPT
Receipt No.: _________	Date: DD/MM/YYYY
Received with thanks from M/s / Mr. / Mrs. __________________________________________________ the sum of Rupees _______________________________________________________________________ by Cash / Cheque / DD / NEFT No. _______________________ Dated ___________________________ on account of ___________________________________________________________________________
₹	Authorised Signatory

In simple words: A receipt is a written proof that money has been received for a transaction.

🎯 Exam Tip: Always include the Receipt Number, Date, Amount in figures and words, and a signature line when drawing a receipt specimen.

 

Question 2. Prepare specimen of a Receipt.
Answer: Below is the standard specimen of a business receipt. It acts as an official acknowledgment of payment received.

RECEIPT
Balaji and Sons Somwar Peth, NASIK G.S.T.I.N. No.: --------------------	Receipt no: -------------------- Date: DD/MM/YYYY
Received with thanks from M/s -------------------------------------------------------------------------------- a sum of Rs. -------------------------------------------------- by cash/cheque/D.D./NEFT/R.T.G.S. No. -------------------- Dated -------------------- Drawn on -------------------- in part/full payment of bill No. --------------------
Rs.	STAMP Receiver's Signature
Subject to realisation of cheque

In simple words: A receipt is a written proof showing that a business has received money from a customer for goods or services.

🎯 Exam Tip: Always remember to include essential fields like Receipt Number, Date, Amount in figures and words, and the Stamp/Signature box to score full marks.

 

Question 3. Prepare specimen of the Crossed cheque.
Answer: Below is the specimen of a crossed cheque. Crossing a cheque ensures that the funds are safely transferred directly to the payee's bank account.

A/C PAYEE D D M M Y Y
Pay ---------------------------------------------------------------------------------------------------- OR BEARER Rupees ---------------------------------------------------------------------------------------------------------
A/C NO. State Bank of India M.G. Road, Mumbai. IFSC No. SBIN1234001	Rs. Signature
" 123456 " 4111250351: 007964

In simple words: A crossed cheque has two parallel lines drawn on the top-left corner. This means the bank will only pay the money directly into the payee's bank account, making it very safe.

🎯 Exam Tip: Do not forget to draw the two parallel transverse lines on the top-left corner, as this is the defining feature of a crossed cheque.

 

Question 4. Prepare specimen of Cash voucher.
Answer: Below is the specimen of a cash voucher. It serves as a key internal document to record cash disbursements within an organization.

CASH VOUCHER
Name of Firm: -------------------- Voucher No: --------------------	Date: DD/MM/YYYY
Paid to M/s / Shri: -------------------------------------------------------------------------------- On account of: -------------------------------------------------------------------------------------
Particulars	Amount (Rs.)
Being cash paid for --------------------------------------------------	------------------
Total:	------------------
Amount in words: Rupees ---------------------------------------------------------------------------
Prepared By: -------------------- Passed By: --------------------	Receiver's Signature: --------------------

In simple words: A cash voucher is an internal document used by a business to record and approve any cash payments made for daily expenses.

🎯 Exam Tip: Ensure you include signatures for 'Prepared By', 'Passed By', and 'Receiver's Signature' to show proper internal control in the voucher specimen.

Question. Draw a format of a Cash Voucher.
Answer:
CASH VOUCHER
Nakul & Company
Bandra Road, Mumbai

Voucher no.: _________                      Date: _________
G.S.T. IN. No.: _________
Pay to: ________________________________________________
on account of: __________________________________________
Debit account: __________________________________________
Total Rs. __________________________________________ only
Amount Rs. [          ]
Prepared by: _________      Receiver's sign: _________      Receiver sign: _________
In simple words: A cash voucher is a document that proves a cash payment has been made, showing details like the receiver's name, amount, and signatures.

🎯 Exam Tip: Always remember to include essential fields like Voucher Number, Date, Amount in figures and words, and signatures of both the preparer and receiver to get full marks.

 

7. Correct the Following Statements and Rewrite the Statements

 

Question 1. All business transactions are recorded in the Journal.
Answer: Only monetary transactions are recorded in the Journal. Non-monetary events, no matter how important, are excluded from financial books.
In simple words: Only transactions that involve money or can be measured in money are written down in the journal. Other events, like a business meeting, are not recorded.

🎯 Exam Tip: Clearly highlight the word 'monetary' in your answer to show the examiner you understand the money measurement concept.

 

Question 2. A cash discount is not recorded in the books of accounts.
Answer: A cash discount is recorded in the books of accounts. It is directly entered in the cash book as a discount allowed or discount received.
In simple words: A cash discount is given to encourage quick payment, so it is always written down in the accounting books. This helps track how much discount was given or received.

🎯 Exam Tip: Remember that cash discount is recorded in the books, whereas trade discount is only deducted from the catalog price and not recorded separately.

 

Question 3. Journal is a book of Secondary entry.
Answer: Journal is a book of Prime entry. It is also known as the book of original entry because transactions are recorded here first.
In simple words: The journal is the very first place where business transactions are written down. That is why it is called a book of prime or original entry.

🎯 Exam Tip: Clearly state that the Ledger is the book of secondary entry, while the Journal is the book of primary or original entry.

 

Question 4. GST is imposed by the Government of India from 1st July 2018.
Answer: GST is imposed by the Government of India from 1st July 2017. This comprehensive indirect tax replaced many older central and state taxes.
In simple words: GST, which stands for Goods and Services Tax, was officially started in India on July 1, 2017. It simplified the tax system by bringing multiple taxes under one roof.

🎯 Exam Tip: Double-check the year in your answer, as writing 2018 instead of 2017 is a very common mistake.

Question 5. The machinery purchased by the Proprietor decreases his capital.
Answer: Machinery purchased by the proprietor increases his Capital. This is because machinery is an asset that adds value to the business's total resources.
In simple words: Buying machinery adds a valuable asset to the business, which increases the owner's overall capital rather than decreasing it.

🎯 Exam Tip: Remember that purchasing an asset increases the capital of the business, so always analyze how transactions affect assets and liabilities.

 

8. Do You Agree or Disagree with the Following Statements.

 

Question 1. Narration is required for every entry.
Answer: Agree. A brief explanation called narration is essential to understand the nature of each journal entry.
In simple words: We agree because a narration explains why a journal entry was made, making it easy for anyone to understand the transaction later.

🎯 Exam Tip: Always write a clear and concise narration starting with the word 'Being' to secure full marks for journal entries.

 

Question 2. GST stands for Goods and Sales Tax.
Answer: Disagree. The correct full form of GST is Goods and Services Tax, which is a comprehensive indirect tax levied on goods and services.
In simple words: We disagree because GST actually stands for Goods and Services Tax, not Goods and Sales Tax.

🎯 Exam Tip: Do not confuse 'Services' with 'Sales' when writing the full form of GST in your exams.

 

Question 3. Trade discount is not recorded in the books of accounts.
Answer: Agree. Trade discount is deducted directly from the catalog price, and only the net amount is recorded in the books of accounts.
In simple words: We agree because trade discount is just a reduction in price given at the time of purchase, so we only record the final price we actually pay.

🎯 Exam Tip: Remember that only cash discounts are recorded in the books, while trade discounts are directly deducted from the invoice value.

 

Question 4. Wages paid for the installation of Machinery is debited to Wages Account.
Answer: Disagree. Wages paid for the installation of machinery are capital expenditure and should be debited to the Machinery Account.
In simple words: We disagree because any money spent to set up a new machine is added to the cost of the machine itself, not to regular wages.

🎯 Exam Tip: Always debit installation charges of an asset to that specific Asset Account, as it is a capital expenditure.

 

Question 5. The process of entering or recording the transactions in a Journal is called Journalising.
Answer: Agree. Journalising is the systematic process of recording business transactions chronologically in the journal.
In simple words: We agree because the word 'journalising' simply means the act of writing down transactions in the journal book.

🎯 Exam Tip: Clearly define journalising as the initial step of recording transactions in the book of original entry.

 

9. Calculate the Following:

Question 1. Purchased Motor Car from Tata & Company worth Rs. 2,00,000 at 18% GST. Find out GST amount.
Answer:
Cost of the Motor Car = Rs. 2,00,000
GST @ 18% = \( 2,00,000 \times \frac{18}{100} = \text{Rs. } 36,000 \)
Net value of the Motor Car = \( \text{Rs. } 2,00,000 + \text{Rs. } 36,000 = \text{Rs. } 2,36,000 \). This net value represents the total cost incurred by the buyer including taxes.
In simple words: To find the GST, we calculate 18% of the car's price, which is Rs. 36,000. Adding this tax to the original price gives the total cost of Rs. 2,36,000.

🎯 Exam Tip: Always calculate the GST percentage on the original cost price before adding it to find the final net value.

 

Question 2. Paid Transport charges Rs. 10,000 @ 5% GST. Calculate CGST & SGST.
Answer:
Transport charges = Rs. 10,000 @ 5% GST.
Since the total GST is 5%, it is divided equally into CGST (2.5%) and SGST (2.5%) for intra-state transactions.
CGST = Transport charges \( \times 2.5\% \)
\( = 10,000 \times \frac{2.5}{100} \)
\( = 10,000 \times \frac{25}{1000} \)
\( = \text{Rs. } 250 \)
SGST = Transport charges \( \times 2.5\% \)
\( = 10,000 \times \frac{2.5}{100} \)
\( = 10,000 \times \frac{25}{1000} \)
\( = \text{Rs. } 250 \)
Net value = \( 10,000 + 250 + 250 = \text{Rs. } 10,500 \)
In simple words: The 5% GST is split equally into 2.5% CGST for the central government and 2.5% SGST for the state government, which is Rs. 250 each.

🎯 Exam Tip: Remember that CGST and SGST are always equal and each represents exactly half of the total GST rate.

 

Question 3. Bought goods from Ranjan Rs. 10,000 @ 5% GST and 10% cash discount. Calculate cash discount.
Answer:
Cost of the goods bought = Rs. 10,000 @ 5% GST and 10% cash discount.
GST on Goods Purchased = Cost of goods \( \times 5\% \)
\( = 10,000 \times \frac{5}{100} \)
\( = \text{Rs. } 500 \)
Net value of Goods Purchased = \( 10,000 + 500 = \text{Rs. } 10,500 \)
Cash discount = Net value \( \times 10\% \)
\( = 10,500 \times \frac{10}{100} \)
\( = \text{Rs. } 1,050 \). Cash discounts are generally offered to encourage prompt payment by the buyer.
In simple words: First, we add the 5% GST to the purchase price to get Rs. 10,500. Then, we calculate the 10% cash discount on this total amount, which comes to Rs. 1,050.

🎯 Exam Tip: Always calculate the cash discount on the total net value (price including GST) unless specified otherwise in the problem.

 

Question 4. Received cheque of Rs. 90,000 from Kiran in full settlement of his account Rs. 1,00,000/-. Calculate discount rate.
Answer:
Discount allowed to Kiran = Amount due – Amount received
= 1,00,000 – 90,000
= Rs. 10,000.
This discount represents the concession given for prompt payment.
Rate of discount allowed to Kiran = \( \frac{100 \times \text{Total Discount allowed}}{\text{Amount on which discount allowed}} \)
= \( \frac{100 \times 10,000}{1,00,000} \)
= 10%
In simple words: Kiran owed Rs. 1,00,000 but settled the account by paying Rs. 90,000. The discount of Rs. 10,000 is exactly 10% of the total amount due.

🎯 Exam Tip: Always calculate the discount rate on the total amount due (the book value of the debt) rather than the amount actually received.

 

Question 5. Sold goods of Rs. 1,00,000 at 10% Trade Discount and 10% cash discount to Ram and received 50% amount by cheque. Calculate the amount of cheque received.
Answer:
Trade Discount = Catalogue price \( \times \) Rate of trade discount
= 1,00,000 \( \times \frac{10}{100} \)
= Rs. 10,000
Net amount receivable = Catalogue price – Trade Discount
= 1,00,000 – 10,000
= Rs. 90,000
Since only half of the transaction is settled immediately, cash discount is calculated only on that portion.
50% of net amount received.
\( \therefore \) Amount receivable = 50% of 90,000
= \( \frac{50}{100} \times 90,000 \)
= Rs. 45,000
Cash discount allowed = 10% on Rs. 45,000
= \( \frac{10}{100} \times 45,000 \)
= Rs. 4,500
Amount of cheque received = 50% of total amount – Cash discount
= 45,000 – 4,500
= Rs. 40,500
Amount received by cheque = Rs. 40,500.
In simple words: First, subtract the 10% trade discount from the total price to get Rs. 90,000. Since only half is paid now, take Rs. 45,000 and apply the 10% cash discount to it, leaving a final cheque amount of Rs. 40,500.

🎯 Exam Tip: Remember that trade discount is deducted first to find the net price, and cash discount is only calculated on the actual amount being paid immediately, not the entire net price.

 

10. Complete the Following Table.

 

Question 1. Complete the following table by identifying the missing Debit or Credit accounts:

Sr. No.	Transactions	Debit Amount (Rs.)	Credit Amount (Rs.)
1	Paid Income Tax Rs. 5,000 by cheque	?	- Bank A/c
2	Received from Sonali Rs. 20,000 by RTGS.	Bank a/c -	- ?
3	Sanjay became insolvent and not received Rs. 500	?	- Sanjay A/c
4	Purchased Horse for Rs. 10,000	?	- Cash A/c
5	Transferred from Fixed deposit A/c of proprietor to business Bank A/c Rs. 50,000	Bank A/c -	- ?

Answer:
1. Drawings A/c (for Sr. No. 1)
2. Sonali’s A/c (for Sr. No. 2)
3. Bad debts A/c (for Sr. No. 3)
4. Livestock A/c (for Sr. No. 4)
5. Capital A/c (for Sr. No. 5)
In simple words: This table helps us identify which accounts are debited and credited for different business transactions, such as personal tax payments (Drawings) or buying an animal (Livestock).

🎯 Exam Tip: Remember that personal expenses of the proprietor like Income Tax are always debited to the Drawings Account, and live animals purchased are treated as Livestock.

 

Practical Problems

 

Question 1. Journalise the following transactions in the books of Anand General Merchants.
2019 April
1 Mr. Anand started the business with cash of Rs. 60,000.
5 Purchased goods for cash Rs. 30,000.
7 Sold goods of Rs. 10,000 to Suresh.
10 Purchased Furniture from Mr. Govind on credit Rs. 30,000.
15 Paid for Rent Rs. 3000 and paid by debit card.
21 Purchased goods from Urmila on credit Rs. 70,000.
27 Paid for Transport Rs. 1,000 to United Transport.
30 Paid to Urmila Rs. 20,000 on behalf of Sharmila.

Answer:
Journal Entries in the books of Anand General Merchants

Date (2019)	Particulars	L.F.	Debit Amount (Rs.)	Credit Amount (Rs.)
April 1	Cash A/c ...Dr.     To Capital A/c (Being business started with cash)		60,000	60,000
April 5	Purchases A/c ...Dr.     To Cash A/c (Being goods purchased for cash)		30,000	30,000
April 7	Suresh's A/c ...Dr.     To Sales A/c (Being goods sold on credit)		10,000	10,000
April 10	Furniture A/c ...Dr.     To Govind's A/c (Being furniture purchased on credit)		30,000	30,000
April 15	Rent A/c ...Dr.     To Bank A/c (Being rent paid by debit card)		3,000	3,000
April 21	Purchases A/c ...Dr.     To Urmila's A/c (Being goods purchased on credit)		70,000	70,000
April 27	Transport Charges A/c ...Dr.     To Cash A/c (Being transport charges paid)		1,000	1,000
April 30	Sharmila's A/c ...Dr.     To Cash A/c (Being cash paid to Urmila on behalf of Sharmila)		20,000	20,000
	Total		2,24,000	2,24,000

In simple words: Journal entries are the first step in accounting where we record daily business transactions chronologically, showing which account receives the benefit (Debit) and which account gives the benefit (Credit).

🎯 Exam Tip: Always write a brief narration starting with "Being..." below each journal entry, and ensure that the total of the Debit and Credit columns matches at the end.

In the Journal of Anand General Merchants

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 April 1	Cash A/c ...................................................................... Dr.     To Capital A/c (Being cash introduced into the business as capital)		60,000
				60,000
5	Purchases A/c .................................................................. Dr.     To Cash A/c (Being the goods purchased on cash)		30,000
				30,000
7	Suresh A/c ...................................................................... Dr.     To Sales A/c (Being the goods sold on credit to Suresh)		10,000
				10,000
10	Furniture A/c .................................................................. Dr.     To Mr. Govind's A/c (Being the furniture purchased on credit from Govind)		30,000
				30,000
15	Rent A/c .......................................................................... Dr.     To Bank A/c (Being the Rent paid by debit card)		3,000
				3,000
21	Purchase A/c .................................................................. Dr.     To Urmila's A/c (Being the goods purchased on credit)		70,000
				70,000
27	Transport charges A/c ................................................... Dr.     To Cash A/c (Being transport charges paid by cash)		1,000
				1,000
30	Sharmila's A/c ............................................................... Dr.     To Cash A/c (Being cash paid to Urmila on behalf of Sharmila)		20,000
				20,000
	Total		2,24,000	2,24,000

 

Question 2. Journalise the following transactions in the books of Gajanan.
2019 May
3 Purchased goods for Rs. 90,000 and amounts paid by Bank directly.
7 Sold goods to Satish on credit Rs. 30,000.
9 Paid for Postage Rs. 10,000.
12 Paid for Wages Rs. 15,000.
15 Received cheque of Rs. 30,000 from Satish.
21 Received Dividend Rs. 5,000.
25 Purchased Laptop of Rs. 40,000 and paid by cheque.
28 Deposited cash Rs. 10,000 into State Bank of India.
31 Purchased goods for Rs. 40,000 and paid by RTGS.

Answer:
Journal of Gajanan

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 May 3	Purchases A/c .................................................................. Dr.     To Bank A/c (Being goods purchased and amount paid directly by Bank)		90,000
				90,000
7	Satish's A/c ...................................................................... Dr.     To Sales A/c (Being goods sold on credit to Satish)		30,000
				30,000
9	Postage A/c ...................................................................... Dr.     To Cash A/c (Being postage charges paid in cash)		10,000
				10,000
12	Wages A/c ...................................................................... Dr.     To Cash A/c (Being wages paid in cash)		15,000
				15,000
15	Bank A/c .......................................................................... Dr.     To Satish's A/c (Being cheque received from Satish)		30,000
				30,000
21	Bank A/c .......................................................................... Dr.     To Dividend A/c (Being dividend received)		5,000
				5,000
25	Laptop A/c ...................................................................... Dr.     To Bank A/c (Being laptop purchased and paid by cheque)		40,000
				40,000
28	State Bank of India A/c ................................................... Dr.     To Cash A/c (Being cash deposited into State Bank of India)		10,000
				10,000
31	Purchases A/c .................................................................. Dr.     To Bank A/c (Being goods purchased and paid by RTGS)		40,000
				40,000
	Total		2,70,000	2,70,000

In simple words: Journalizing is the process of recording business transactions in chronological order. For every transaction, we identify which account receives the benefit (Debit) and which account gives the benefit (Credit).

🎯 Exam Tip: Always write brief narrations starting with 'Being' for each journal entry, and ensure that the total of the Debit and Credit columns match at the end.

Journal Entries

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 May 3	Purchases A/c ...................................................................... Dr.     To Bank A/c (Being goods purchased and amount paid by Bank directly)		90,000	90,000
7	Satish's A/c ...................................................................... Dr.     To Sales A/c (Being goods sold to Satish on credit)		30,000	30,000
9	Postage A/c ...................................................................... Dr.     To Cash A/c (Being postage paid by cash)		10,000	10,000
12	Wages A/c ...................................................................... Dr.     To Cash A/c (Being the wages paid in cash)		15,000	15,000
15	Bank A/c ...................................................................... Dr.     To Satish's A/c (Being cheque received from Satish)		30,000	30,000
21	Bank A/c ...................................................................... Dr.     To Dividend A/c (Being dividend received in cash)		5,000	5,000
25	Laptop / Computer A/c ...................................................................... Dr.     To Bank A/c (Being Laptop purchased and amount paid by cheque)		40,000	40,000
28	State Bank of India's A/c ...................................................................... Dr.     To Cash A/c (Being the cash deposited into the Bank)		10,000	10,000
31	Purchases A/c ...................................................................... Dr.     To Bank A/c (Being the goods purchased and amount paid by RTGS)		40,000	40,000
	Total		2,70,000	2,70,000

 

Question 3. Journalise the following transactions in the books of Ashok General Stores.
2019 May
1 Received Rs. 5,000 from Ram on behalf of Bharat.
4 Purchased Goods for cash Rs. 55,000.
8 Paid for Salary Rs. 8,000.
12 Purchased goods from Ganesh Rs. 30,000 on credit.
17 Sold goods to Mrs. Neha Rs. 60,000 on credit.
20 Purchased Machinery of Rs. 80,000 @ 12% GST and amount paid by cheque.
25 Paid to SG & Sons by cheque Rs. 30,000.
28 Received Commission Rs. 10,000 from Ganesh.
30 Paid Rent Rs. 5000.
31 Purchased Shares of Atul Company Ltd. for Rs. 10,000 through Demat account.
Answer:
Journal of Ashok General Stores

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 May 1	Cash A/c ...................................................................... Dr.     To Bharat's A/c (Being cash received from Ram on behalf of Bharat)		5,000	5,000
4	Purchases A/c ...................................................................... Dr.     To Cash A/c (Being goods purchased for cash)		55,000	55,000
8	Salary A/c ...................................................................... Dr.     To Cash A/c (Being salary paid)		8,000	8,000
12	Purchases A/c ...................................................................... Dr.     To Ganesh's A/c (Being goods purchased from Ganesh on credit)		30,000	30,000
17	Mrs. Neha's A/c ...................................................................... Dr.     To Sales A/c (Being goods sold to Mrs. Neha on credit)		60,000	60,000
20	Machinery A/c ...................................................................... Dr. Input CGST A/c ...................................................................... Dr. Input SGST A/c ...................................................................... Dr.     To Bank A/c (Being machinery purchased @ 12% GST and paid by cheque)		80,000 4,800 4,800	89,600
25	SG & Sons A/c ...................................................................... Dr.     To Bank A/c (Being paid to SG & Sons by cheque)		30,000	30,000
28	Cash A/c ...................................................................... Dr.     To Commission A/c (Being commission received)		10,000	10,000
30	Rent A/c ...................................................................... Dr.     To Cash A/c (Being rent paid)		5,000	5,000
31	Investment in Shares of Atul Co. Ltd. A/c ...................................................................... Dr.     To Bank A/c (Being shares of Atul Company Ltd. purchased through Demat account)		10,000	10,000
	Total		3,02,600	3,02,600

In simple words: Journalizing means recording daily business transactions in a systematic book of accounts by identifying which account is debited and which is credited.

🎯 Exam Tip: Always write a brief narration below each journal entry starting with 'Being' to explain the transaction, and ensure that the total of the Debit and Credit columns match at the end.

 

Question. Journalise the transactions for May 2019.
Answer:

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 May 1	Cash A/c ........................................................................ Dr. To Bharat's A/c (Being cash received from Ram on behalf of Bharat)		5,000	5,000
4	Purchases A/c ................................................................ Dr. To Cash A/c (Being goods purchased on cash)		55,000	55,000
8	Salary A/c ...................................................................... Dr. To Cash A/c (Being salary paid in cash)		8,000	8,000
12	Purchases A/c ................................................................ Dr. To Ganesh's A/c (Being goods purchases on credit from Ganesh)		30,000	30,000
17	Mrs. Neha's A/c ............................................................ Dr. To Sales A/c (Being goods sold to Mrs. Neha on credit)		60,000	60,000
20	Machinery A/c ................................................................ Dr. Input CGST A/c ............................................................ Dr. Input SGST A/c ............................................................ Dr. To Bank A/c (Being the machinery purchased with 12% GST and amount paid by cheque)		80,000 4,800 4,800	89,600
25	SG & Sons A/c ................................................................ Dr. To Bank A/c. (Being the amount paid by cheque to SG & Sons)		30,000	30,000
28	Cash A/c ........................................................................ Dr. To Commission A/c. (Being commission received in cash from Ganesh)		10,000	10,000
30	Rent A/c ........................................................................ Dr. To Cash A/c (Being rent paid in cash)		5,000	5,000
31	Shares A/c ...................................................................... Dr. To Bank A/c. (Being Shares of Atul Co. Ltd. purchased through Demat A/c)		10,000	10,000
	Total		3,02,600	3,02,600

Working Note:
Dated 20th May 2019:
Calculation of CGST and SGST on Machinery
Catalogue price of Rs. 80,000 @ 12%.
CGST i.e. Central Goods and Services Tax = \( 12\% \times \frac{1}{2} = 6\% \).
CGST = Price of Machinery \( \times 6\% \)
\( = 80,000 \times \frac{6}{100} \)
\( = \text{Rs. } 4,800 \).
SGST i.e. State Goods and Service Tax = \( 12\% \times \frac{1}{2} = 6\% \).
SGST = \( 80,000 \times \frac{6}{100} = \text{Rs. } 4,800 \).
In simple words: Journal entries record daily business transactions with debits and credits, while GST calculations split the tax equally between the Central (CGST) and State (SGST) governments.

🎯 Exam Tip: Always write a brief narration below each journal entry starting with 'Being' to explain the transaction and secure full marks.

 

Question 4. Journalise the following transactions in the books of Sanjay General Stores.
2019 June
1 Started business with cash Rs. 50,000, Bank Rs. 1,00,000, Goods worth Rs. 50,000.
5 Purchased goods from Mohan on credit Rs. 80,000 at 10% Trade Discount.
9 Sold goods to Urmila Rs. 30,000 at 5% Trade Discount.
12 Paid into Dena Bank Rs. 40,000.
15 Goods worth Rs. 5,000 were distributed as free samples.
22 Paid for Commission Rs. 5,000 to Anand.
24 Received Rs. 28,000 from Urmila in full settlement of her account by Debit Card.
29 Paid for Advertisement Rs. 9,000.
30 Purchased Laptop for Rs. 20,000 @ 28% GST and amount paid by NEFT.

Answer:
Journal of Sanjay General Stores
Proper journal entries ensure systematic recording of all business transactions in chronological order.

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 June 1	Cash A/c ...................................................................... Dr. Bank A/c ...................................................................... Dr. Goods A/c .................................................................... Dr.     To Capital A/c (Being the business started with cash, bank balance and stock of goods)		50,000 1,00,000 50,000	2,00,000
5	Purchases A/c ............................................................. Dr.     To Mohan's A/c (Being the goods purchased on credit at 10% trade discount)		72,000	72,000
9	Urmila's A/c ................................................................ Dr.     To Sales A/c (Being goods sold on credit @ 5% trade discount)		28,500	28,500
12	Dena Bank A/c ............................................................ Dr.     To Cash A/c (Being cash paid into Dena Bank)		40,000	40,000
15	Advertisement A/c ....................................................... Dr.     To Goods distributed as free samples A/c (Being the goods distributed as free samples)		5,000	5,000
22	Commission A/c .......................................................... Dr.     To Cash A/c (Being commission paid to Anand)		5,000	5,000
24	Bank A/c ...................................................................... Dr. Discount A/c ............................................................... Dr.     To Urmila's A/c (Being amount received through debit card and discount allowed)		28,000 500	28,500
29	Advertisement A/c ....................................................... Dr.     To Cash A/c (Being advertisement expenses paid in cash)		9,000	9,000
30	Laptop / Computer A/c ............................................... Dr. Input CGST A/c ........................................................... Dr. Input SGST A/c ........................................................... Dr.     To Bank A/c (Being Laptop purchased with 28% GST and amount paid by NEFT)		20,000 2,800 2,800	25,600
	Total		4,13,600	4,13,600

In simple words: A journal is a daily record book where we write down every business transaction. For every transaction, we list which accounts receive value (debit) and which accounts give value (credit), making sure both sides always equal each other.

🎯 Exam Tip: Always calculate trade discount first and deduct it from the catalog price before recording the transaction, as trade discount is never shown separately in the books of accounts.

Working Note:
5th June 2019:
Calculation of Trade discount
Purchased goods for Rs. 80,000 @ 10% Trade discount
Trade discount = \( 80,000 \times \frac{10}{100} = \text{Rs. } 8,000 \)
Net Purchase Price = \( 80,000 - 8,000 = \text{Rs. } 72,000 \)

24th June 2019:
Discount allowed to Urmila = Amount due - Amount received
= \( 28,500 - 28,000 \)
= Rs. 500

30th June 2019:
Calculation of CGST and SGST
Price of Laptop = Rs. 20,000 @ 28% GST.
CGST = (Price of Laptop) \(\times\) Rate of CGST
= \( 20,000 \times \frac{14}{100} \)
= Rs. 2,800
SGST = (Price of Laptop) \(\times\) Rate of SGST
= \( 20,000 \times \frac{14}{100} \)
= Rs. 2,800

 

Question 5. Journalise the following transactions in the books of Kunal Stores.
2018 August
1 Purchased goods of Rs. 90,000 at 10% Trade Discount and 10% Cash Discount from Rakesh and 1/3rd amount paid by cheque.
5 Opened current account in State Bank of India by depositing Rs. 60,000.
8 Cash purchases Rs. 85,000.
10 Goods sold on credit to Tushar Rs. 20,000 @ 10% Trade Discount.
12 Paid Salary Rs. 4,000.
16 Tushar returned goods of Rs. 250.
17 Goods taken by Kunal for his private use Rs. 2,000.
20 Purchased Laptop of Rs. 40,000 from Joshi Electronics @ 18% GST and paid by cheque.
22 Rent paid by cheque Rs. 15,000.

Answer:
In the books of Kunal Stores
Journal Entries

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2018 Aug 1	Purchase A/c ... Dr.     To Bank A/c     To Discount Received A/c     To Rakesh's A/c (Being goods purchased at 10% TD and 10% CD, 1/3rd amount paid by cheque)		81,000	24,300 2,700 54,000
Aug 5	Bank A/c ... Dr.     To Cash A/c (Being current account opened in SBI by depositing cash)		60,000	60,000
Aug 8	Purchase A/c ... Dr.     To Cash A/c (Being goods purchased for cash)		85,000	85,000
Aug 10	Tushar's A/c ... Dr.     To Sales A/c (Being goods sold on credit to Tushar at 10% TD)		18,000	18,000
Aug 12	Salary A/c ... Dr.     To Cash A/c (Being salary paid in cash)		4,000	4,000
Aug 16	Return Inward A/c ... Dr.     To Tushar's A/c (Being goods returned by Tushar)		250	250
Aug 17	Drawings A/c ... Dr.     To Purchase A/c (Being goods withdrawn by Kunal for private use)		2,000	2,000
Aug 20	Laptop A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.     To Bank A/c (Being laptop purchased @ 18% GST and paid by cheque)		40,000 3,600 3,600	47,200
Aug 22	Rent A/c ... Dr.     To Bank A/c (Being rent paid by cheque)		15,000	15,000
	Total		3,12,450	3,12,450

Working Notes:
1. Aug 1 Transaction:
Gross Value = Rs. 90,000
Less: 10% Trade Discount = \( 90,000 \times \frac{10}{100} = \text{Rs. } 9,000 \)
Net Purchase Price = \( 90,000 - 9,000 = \text{Rs. } 81,000 \)
Amount paid by cheque (1/3rd) = \( 81,000 \times \frac{1}{3} = \text{Rs. } 27,000 \)
Less: 10% Cash Discount on paid amount = \( 27,000 \times \frac{10}{100} = \text{Rs. } 2,700 \)
Net amount paid by cheque = \( 27,000 - 2,700 = \text{Rs. } 24,300 \)
Credit Purchase from Rakesh (2/3rd) = \( 81,000 \times \frac{2}{3} = \text{Rs. } 54,000 \)

2. Aug 20 Transaction:
Price of Laptop = Rs. 40,000
CGST @ 9% = \( 40,000 \times \frac{9}{100} = \text{Rs. } 3,600 \)
SGST @ 9% = \( 40,000 \times \frac{9}{100} = \text{Rs. } 3,600 \)
Total amount paid = \( 40,000 + 3,600 + 3,600 = \text{Rs. } 47,200 \)

In simple words: Journalizing is the process of recording daily business transactions in a systematic book called a Journal. We apply the rules of double-entry bookkeeping to debit what comes in or is an expense, and credit what goes out or is an income.

🎯 Exam Tip: Always show detailed working notes for transactions involving trade discount and cash discount calculations, as examiners award separate marks for correct working steps.

 

Question. Journalise the following transactions:
25 Purchased Motor car worth Rs. 2,00,000 for cash @ 18% GST and paid by Bank.
26 Goods distributed as free sample Rs. 4,000.
28 Purchased goods from Amit of Rs. 60,000 on credit.
30 Paid by ECS cash to Amit Rs. 58,500, who allowed us a discount of Rs. 1,500.
30 Sold goods Rs. 5,000 at a loss of Rs. 1,000
31 Sold goods for Rs. 20,000.

🎯 Exam Tip: When journalising transactions, always identify the two accounts affected and apply the rules of nominal, real, or personal accounts to determine debits and credits.

 

Solution: Journal of Kunal Stores

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2018 August 1	Purchases A/c ...................................................................... Dr.     To Bank A/c     To Discount A/c     To Rakesh's A/c (Being the goods Purchased @ 10% T.D. and 10% C.D., 1/3rd amount paid by cheque)		81,000	24,300 2,700 54,000
5	State Bank of India's A/c ...................................................... Dr.     To Cash A/c (Being the cash deposited into the bank to open current A/c)		60,000	60,000
8	Purchases A/c ...................................................................... Dr.     To Cash A/c (Being the goods purchased and cash paid)		85,000	85,000
10	Tushar's A/c ...................................................................... Dr.     To Sales A/c (Being the goods sold on credit @ 10% T.D.)		18,000	18,000
12	Salary A/c ...................................................................... Dr.     To Cash A/c (Being salary paid in cash)		4,000	4,000
16	Sales Return A/c ...................................................................... Dr.     To Tushar's A/c (Being the goods returned by Tushar)		250	250
17	Drawings A/c ...................................................................... Dr.     To Goods withdrawn by Proprietors A/c (Being the goods withdrawn by the Proprietor for personal use)		2,000	2,000

🎯 Exam Tip: Always write clear narrations starting with 'Being' for each journal entry to explain the transaction briefly and secure full marks.

 

Question. Journalise the following transactions in the books of accounts and show the detailed working notes.
Answer: The journal entries and working notes are presented below:

Date	Particulars	Debit (Rs.)	Credit (Rs.)
20	Laptop/Computer A/c ................................................... Dr. Input CGST A/c ........................................................... Dr. Input SGST A/c ........................................................... Dr.     To Bank A/c (Being Laptop purchase with 18% GST and amount paid by cheque)	40,000 3,600 3,600	47,200
22	Rent A/c ....................................................................... Dr.     To Bank A/c (Being Rent paid by cheque)	15,000	15,000
25	Motor Car A/c ............................................................. Dr. Input CGST A/c ........................................................... Dr. Input SGST A/c ........................................................... Dr.     To Bank A/c (Being motor car purchased with 18% GST and amount paid by cheque)	2,00,000 18,000 18,000	2,36,000
26	Advertisement A/c ....................................................... Dr.     To Goods distributed as free sample A/c (Being the goods distributed as free samples)	4,000	4,000
28	Purchases A/c ............................................................. Dr.     To Amit's A/c (Being the goods purchased from Amit on credit)	60,000	60,000
30	Amit's A/c ................................................................... Dr.     To Bank A/c     To Discount A/c (Being the amount paid and discount earned)	60,000	58,500 1,500
30	Cash A/c ...................................................................... Dr. Loss on Sale of Goods A/c .......................................... Dr.     To Sales A/c (Being the goods sold on cash at a loss of Rs. 1000)	4,000 1,000	5,000
31	Cash A/c ...................................................................... Dr.     To Sales A/c (Being the goods sold on cash basis)	20,000	20,000
Total		6,97,450	6,97,450

Working Notes:
1. 2018 Aug. 1st:
Trade discount = 10% on Purchase catalogue price
= \( \frac{10}{100} \times 90,000 \)
= Rs. 9,000
Net Purchase price = 90,000 - 9,000 = Rs. 81,000
Amount paid = \( \frac{1}{3} \times 81,000 \) = Rs. 27,000
Cash discount = 10% on 27,000
= \( \frac{10}{100} \times 27,000 \)
= Rs. 2,700
Amount paid by cheque = 27,000 - 2,700 = Rs. 24,300

2. Aug. 10th:
Net price of Goods sold to Tushar = 20,000 - 10% Trade discount
= 20,000 - \( \frac{10}{100} \times 20,000 \)
= 20,000 - 2,000
= Rs. 18,000
In simple words: This journal records daily business transactions, showing how we calculate trade discounts (which reduce the catalog price) and cash discounts (which are given for quick payments).

🎯 Exam Tip: Remember that trade discount is never recorded in the journal entries, whereas cash discount is always recorded in the discount account.

Working Notes / Calculations (Continued)

3. 20th Aug. 2018:
Calculation of GST
CGST = 9% on Rs. 40,000
= \( \frac{9}{100} \times 40,000 \)
= Rs. 3,600
SGST = 9% on Rs. 40,000
= \( \frac{9}{100} \times 40,000 \)
= Rs. 3,600

 

4. 25th Aug. 2018:
Calculation of GST
CGST = 9% on Rs. 2,00,000
= \( \frac{9}{100} \times 2,00,000 \)
= Rs. 18,000
SGST = 9% on Rs. 2,00,000
= \( \frac{9}{100} \times 2,00,000 \)
= Rs. 18,000

🎯 Exam Tip: Always calculate CGST and SGST separately at half of the total GST rate on the taxable value of goods or services.

 

Question 6. Journalise the following transactions in the books of Nina General Stores.
2018 Sept
1 Sold goods of Rs. 50,000 at 10% Trade Discount and 10% Cash Discount to Raj and received 50% by cheque and 20% by cash.
3 Bought goods worth Rs. 60,000 from Prashant at 7.5% Trade Discount and half amount paid by cash.
5 Returned goods worth Rs. 550 to Prashant.
7 Sold goods worth Rs. 90,000 to Ranvir on credit at 10% Trade Discount.
12 Received Commission Rs. 4,500.
15 Received cheque of Rs. 80,000 from Ranvir in full settlement of his account.
18 Purchased Computer worth Rs. 80,000 from Reliance Company by cheque at 28% GST.
22 Wages paid Rs. 13,000.
23 Paid for Life Insurance premium Rs. 17,000.
27 Sold goods worth Rs. 28,000 to Tushar who paid us Rs. 18,000 immediately.

Answer:
Journal of Nina General Stores

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2018 Sept 1	Bank A/c ... Dr. Cash A/c ... Dr. Discount Allowed A/c ... Dr. Raj's A/c ... Dr.     To Sales A/c (Being goods sold at 10% TD and 10% CD, 50% received by cheque and 20% by cash)		20,250 8,100 3,150 13,500	45,000
3	Purchases A/c ... Dr.     To Cash A/c     To Prashant's A/c (Being goods purchased from Prashant at 7.5% TD and half amount paid by cash)		55,500	27,750 27,750
5	Prashant's A/c ... Dr.     To Purchase Return A/c (Being goods returned to Prashant)		550	550
7	Ranvir's A/c ... Dr.     To Sales A/c (Being goods sold to Ranvir on credit at 10% TD)		81,000	81,000
12	Cash A/c ... Dr.     To Commission Received A/c (Being commission received)		4,500	4,500
15	Bank A/c ... Dr. Discount Allowed A/c ... Dr.     To Ranvir's A/c (Being cheque received from Ranvir in full settlement of his account)		80,000 1,000	81,000
18	Computer A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.     To Bank A/c (Being computer purchased from Reliance Company by cheque at 28% GST)		80,000 11,200 11,200	1,02,400
22	Wages A/c ... Dr.     To Cash A/c (Being wages paid)		13,000	13,000
23	Drawings A/c ... Dr.     To Cash A/c (Being life insurance premium paid)		17,000	17,000
27	Cash A/c ... Dr. Tushar's A/c ... Dr.     To Sales A/c (Being goods sold to Tushar and part payment received)		18,000 10,000	28,000
Total			4,27,950	4,27,950

Working Notes:
1. Sept 1:
- Catalog Price = Rs. 50,000
- Less: 10% Trade Discount = Rs. 5,000
- Net Value = Rs. 45,000
- Cash Transactions (70%):
- Cheque (50% of Rs. 45,000) = Rs. 22,500
- Cash (20% of Rs. 45,000) = Rs. 9,000
- Total Cash Transactions = Rs. 31,500
- Less: 10% Cash Discount on Rs. 31,500 = Rs. 3,150 (Cheque CD = Rs. 2,250, Cash CD = Rs. 900)
- Net Cheque Received = Rs. 22,500 - Rs. 2,250 = Rs. 20,250
- Net Cash Received = Rs. 9,000 - Rs. 900 = Rs. 8,100
- Credit Transaction (30% of Rs. 45,000) = Rs. 13,500 (Raj's A/c)

2. Sept 3:
- Catalog Price = Rs. 60,000
- Less: 7.5% Trade Discount = Rs. 4,500
- Net Purchase Price = Rs. 55,500
- Half paid by cash = Rs. 27,750
- Half on credit = Rs. 27,750

3. Sept 15:
- Amount due from Ranvir = Rs. 81,000 (from Sept 7)
- Amount received in full settlement = Rs. 80,000
- Discount Allowed = Rs. 81,000 - Rs. 80,000 = Rs. 1,000

4. Sept 18:
- Computer Cost = Rs. 80,000
- CGST = 14% of Rs. 80,000 = Rs. 11,200
- SGST = 14% of Rs. 80,000 = Rs. 11,200

In simple words: Journalizing is the process of recording business transactions in chronological order. We apply the rules of debit and credit to record each transaction, ensuring that the total debits always equal the total credits.

🎯 Exam Tip: Always show detailed working notes for trade discount and cash discount calculations, as examiners award step-by-step marks for these workings.

 

Question 1. Journalise the following transactions in the books of a trader for September 2018.
Answer:

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2018 Sept. 1	Bank A/c ...................................................................... Dr. Cash A/c ...................................................................... Dr. Discount A/c .............................................................. Dr. Raj's A/c ...................................................................... Dr.     To Sales A/c (Being the goods sold at 10% T.D. and 10% C.D. 50% of the amount and 20% of the amount received by cheque and cash respectively)		20,250 8,100 3,150 13,500	45,000
3	Purchases A/c ............................................................. Dr.     To Cash A/c     To Prashant's A/c (Being goods purchased @ 7.5% T.D. from Prashant and half of the amount paid in cash)		55,500	27,750 27,750
5	Prashant's A/c ............................................................. Dr.     To Purchase Returns A/c (Being the goods return to Prashant)		550	550
7	Ranvir's A/c ................................................................. Dr.     To Sales A/c (Being the goods sold to Ranvir on credit @ 10% T.D.)		81,000	81,000
12	Cash A/c ...................................................................... Dr.     To Commissions A/c (Being commission received in cash)		4,500	4,500
15	Bank A/c ...................................................................... Dr. Discount A/c .............................................................. Dr.     To Ranvir's A/c (Being cheque received and discount allowed)		80,000 1,000	81,000
18	Computer A/c ............................................................. Dr. Input CGST A/c .......................................................... Dr. Input SGST A/c .......................................................... Dr.     To Bank A/c (Being computer purchased with 28% GST and amount paid by cheque)		80,000 11,200 11,200	1,02,400
22	Wages A/c ................................................................... Dr.     To Cash A/c (Being wages paid in cash)		13,000	13,000
23	Drawings A/c .............................................................. Dr.     To Cash A/c (Being life insurance premium paid in cash)		17,000	17,000
27	Cash A/c ...................................................................... Dr. Tushar's A/c ............................................................... Dr.     To Sales A/c (Being goods sold partly on cash and partly on credit basis)		18,000 10,000	28,000
	Total		4,27,950	4,27,950

Working Notes:
1. 1st Sept. 2018:
Selling (invoice) price = Rs. 50,000
Trade Discount = 10% on Rs. 50,000
\( = \frac{10}{100} \times 50,000 \)
\( = \text{Rs. } 5,000 \)
Net selling price = \( 50,000 - 5,000 = \text{Rs. } 45,000 \)

50% of the Net selling price received by cheque:
Amount of cheque received = 50% of Net selling price \( - \) Cash discount
\( = \frac{50}{100} \times 45,000 - 10\% \text{ on Rs. } 22,500 \)
\( = 22,500 - 2,250 = \text{Rs. } 20,250 \)

20% of the Net selling price received in cash:
Amount of cash received = 20% of Net selling price \( - \) Cash discount
\( = \frac{20}{100} \times 45,000 - 10\% \text{ on Rs. } 9,000 \)
\( = 9,000 - 900 = \text{Rs. } 8,100 \)

Total Cash Discount allowed = \( 2,250 \text{ (on cheque)} + 900 \text{ (on cash)} = \text{Rs. } 3,150 \)

Balance credit sales to Raj = 30% of Net selling price
\( = \frac{30}{100} \times 45,000 = \text{Rs. } 13,500 \)
In simple words: This journal records daily business transactions by debiting what comes in or expenses, and crediting what goes out or incomes, ensuring that total debits always equal total credits.

🎯 Exam Tip: Always calculate Trade Discount first and deduct it from the invoice price before calculating Cash Discount, as Cash Discount is only allowed on the actual cash/cheque payment received.

Working Notes and Calculations
= Rs. 22,500 – Rs. 2,250
= Rs. 20,250
20% of Net selling price received by cash.
Net amount of cash received = 20% of Net selling price – Cash discount
\( = \frac{20}{100} \times 45,000 \) – Cash discount
\( = 9,000 - \frac{10}{100} \times 9,000 \)
= 9,000 – 900
= Rs. 8,100
30% of Net Selling price is not received
\( \therefore \) Amount not received \( = \frac{30}{100} \times 45,000 = \text{Rs. } 13,500 \)
Total of cash discount = 2,250 + 900 = Rs. 3,150

2. 3rd Sept. 18:
Trade discount = 7.5% on 60,000
\( = \frac{7.5}{100} \times 60,000 \)
= Rs. 4,500
Net Purchase price = 60,000 – 4,500 = Rs. 55,500

3. 18th Sept. 18:
Calculation of GST
CGST = (Purchase Price of Computer) × 14%
\( = 80,000 \times \frac{14}{100} \)
= Rs. 11,200
SGST \( = 80,000 \times \frac{14}{100} = \text{Rs. } 11,200 \)
Net Purchase price of Computer = 80,000 + 11,200 + 11,200 = Rs. 1,02,400
In simple words: These calculations show how to find the final amounts after applying trade discounts, cash discounts, and GST (CGST and SGST) to the purchase prices.

🎯 Exam Tip: Always calculate Trade Discount first on the catalog price, and then calculate Cash Discount on the net amount actually paid or received.

 

Question 7. Journalise the following transactions in the books of Varun
2018 Oct.
1 Purchased Machinery of Rs. 95,000 and paid Rs. 5,000 for freight.
3 Purchased goods for Rs. 1,50,000 and amount paid by Bank.
6 Purchased Laptop from Nagesh & Co. worth Rs. 1,80,000 @ 18% GST.
10 Paid into Bank of Baroda Rs. 70,000.
12 Paid for Rent Rs. 4,000 and Commission Rs. 3,000.
15 Bought goods from Tushar Company Ltd. Rs. 1,20,000 at 12% GST and paid 1/2 amount by RTGS.
16 Cash purchases Rs. 50,000 amount paid by cheque.
20 Invoiced goods to Satish Rs. 80,000 at 12% GST and the amount received by

 

Question 1. Journalise the following transactions in the books of Varun:
25 Paid for Telephone charges Rs. 90,000
27 Mrs. Varsha bought goods from us Rs. 90,000 at a 12% Trade Discount.
28 Purchased goods from Abhijeet & Sons Rs. 1,50,000 at 18% GST.
30 Paid to Abhijeet & Sons and received 10% Cash Discount by cheque.
31 Paid for Advertisement Rs. 8,000 and Brokerage Rs. 12,000.
Answer:

Journal of Varun

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
25	Telephone Charges A/c ... Dr.     To Bank A/c (Being telephone charges paid by cheque)		90,000	90,000
27	Varsha's A/c ... Dr.     To Sales A/c (Being goods sold on credit at 12% Trade Discount)		79,200	79,200
28	Purchases A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.     To Abhijeet & Sons A/c (Being goods purchased at 18% GST)		1,50,000 13,500 13,500	1,77,000
30	Abhijeet & Sons A/c ... Dr.     To Bank A/c     To Discount Received A/c (Being payment made by cheque and 10% cash discount received)		1,77,000	1,59,300 17,700
31	Advertisement A/c ... Dr. Brokerage A/c ... Dr.     To Cash A/c (Being advertisement and brokerage expenses paid)		8,000 12,000	20,000
	Total		4,79,700	4,79,700

Working Notes:
1. Transaction dated 27th: Trade Discount = 12% of Rs. 90,000 = Rs. 10,800. Net Sales Value = Rs. 90,000 - Rs. 10,800 = Rs. 79,200. Trade discount is not recorded in the books of accounts.
2. Transaction dated 28th: GST is 18%, which is divided equally into CGST (9%) and SGST (9%). CGST = 9% of Rs. 1,50,000 = Rs. 13,500. SGST = 9% of Rs. 1,50,000 = Rs. 13,500.
3. Transaction dated 30th: Cash Discount is calculated on the total amount due to Abhijeet & Sons (Rs. 1,77,000). Cash Discount = 10% of Rs. 1,77,000 = Rs. 17,700. Net amount paid by cheque = Rs. 1,77,000 - Rs. 17,700 = Rs. 1,59,300.
Proper calculation of trade discount and GST is essential for accurate ledger posting.
In simple words: A journal is a daily record book where we write down business transactions, showing which account receives value (Debit) and which account gives value (Credit).

🎯 Exam Tip: Always show detailed working notes for Trade Discount and GST calculations to secure full marks for calculation accuracy.

 

Question 1. Journalise the following transactions in the books of the business for October 2018.
Answer:

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2018 Oct. 1	Machinery A/c ........................................................................ Dr.     To Cash A/c (Being the machinery purchased on cash and freight paid)		1,00,000	1,00,000
3	Purchases A/c ........................................................................ Dr.     To Bank A/c (Being goods purchased and amount paid by cheque)		1,50,000	1,50,000
6	Laptop (Computer) A/c ........................................................ Dr. Input CGST A/c .................................................................... Dr. Input SGST A/c .................................................................... Dr.     To Nagesh and Co's A/c (Being the laptop purchased with GST on credit from Nagesh and Co.)		1,80,000 16,200 16,200	2,12,400
10	Bank of Baroda A/c ................................................................ Dr.     To Cash A/c (Being cash deposited into the Bank)		70,000	70,000
12	Rent A/c ................................................................................ Dr. Commission A/c .................................................................... Dr.     To Cash A/c (Being rent and commission paid in cash)		4,000 3,000	7,000
15	Purchases A/c ........................................................................ Dr. Input CGST A/c .................................................................... Dr. Input SGST A/c .................................................................... Dr.     To Bank A/c     To Tushar company Ltd's A/c (Being goods purchased with 12% GST and half of the amount paid by RTGS)		1,20,000 7,200 7,200	67,200 67,200
16	Purchases A/c ........................................................................ Dr.     To Bank A/c (Being goods purchased and amount paid by cheque)		50,000	50,000
20	Cash A/c ................................................................................ Dr.     To Sales A/c     To Output CGST A/c     To Output SGST A/c (Being goods sold with 12% GST and amount received by cheque)		89,600	80,000 4,800 4,800
25	Telephone Charges A/c ........................................................ Dr.     To Cash A/c (Being telephone charges paid in cash)		90,000	90,000
27	Mrs. Varsha's A/c ................................................................ Dr.     To Sales A/c (Being goods sold on credit at 12% Trade discount)		79,200	79,200
28	Purchases A/c ........................................................................ Dr. Input CGST A/c .................................................................... Dr. Input SGST A/c .................................................................... Dr.     To Abhijeet & Sons A/c (Being goods purchased with 18% GST on credit)		1,50,000 13,500 13,500	1,77,000
30	Abhijeet & Sons A/c ............................................................ Dr.     To Bank A/c     To Discount A/c (Being amount due to Abhijit and sons paid by cheque and earn 10% cash discount)		1,77,000	1,59,300 17,700
31	Advertisement A/c ................................................................ Dr. Brokerage A/c ........................................................................ Dr.     To Cash A/c (Being advertisement and brokerage paid in cash)		8,000 12,000	20,000
	Total		13,56,600	13,56,600

In simple words: A journal is a book where every business transaction is written down in order of date, showing which accounts are debited and credited with equal amounts.

🎯 Exam Tip: Always write a clear narration starting with 'Being' under each entry, and make sure the final totals of the Debit and Credit columns match perfectly.

 

Question 8. Journalise the following transactions in the books of Dhoni Auto Car Centre
2018 Nov
1 Sold 1,000 shares for Rs. 100 each and paid brokerage @ 1% and the amount credited to our account.
4 Purchased goods from Ashish & Co. of Rs. 2,00,000.
6 Sold goods to Virat & Co. Rs. 1,50,000.
8 Paid for Advertisement Rs. 30,000 to Times of India.
10 Paid for Printing and Stationery Rs. 7,000.
12 Purchased goods from Prakash & Co. Rs. 1,50,000 @ 18% GST.
15 Paid for Transport charges Rs. 10,000 @ 12% GST.
20 Purchased goods from Vikram & Sons Rs. 1,20,000 @ 18% GST and paid half the amount immediately.
25 Paid to Prakash & Co. less 10% discount.
30 Invoiced Goods to Sanjay Rs. 60,000.
31 Sanjay returned goods of Rs. 10,000.
31 Sanjay became insolvent and recovered only 50 paise in a rupee as a final settlement from him.
Answer: Proper classification of accounts into personal, real, and nominal is essential for accurate journal entries.

Journal of Dhoni Auto Car Centre

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2018 Nov. 1	Bank A/c .................................................................. Dr. Brokerage A/c ........................................................... Dr.     To Shares A/c (Being shares sold and brokerage paid)		99,000 1,000	1,00,000
4	Purchases A/c .......................................................... Dr.     To Ashish & Co.'s A/c (Being goods purchased on credit from Ashish & Co.)		2,00,000	2,00,000
6	Virat & Co.'s A/c ...................................................... Dr.     To Sales A/c (Being the goods sold to Virat & Co. on credit)		1,50,000	1,50,000
8	Advertisement A/c ................................................... Dr.     To Cash A/c (Being Advertisement bill paid to Times of India)		30,000	30,000
10	Printing and Stationery A/c ...................................... Dr.     To Cash A/c (Being printing and stationery charges paid)		7,000	7,000
12	Purchases A/c .......................................................... Dr. Input CGST A/c ........................................................ Dr. Input SGST A/c ........................................................ Dr.     To Prakash & Co.'s A/c (Being goods purchased from Prakash & Co. @ 18% GST)		1,50,000 13,500 13,500	1,77,000
15	Transport Charges A/c ............................................. Dr. Input CGST A/c ........................................................ Dr. Input SGST A/c ........................................................ Dr.     To Cash A/c (Being transport charges paid @ 12% GST)		10,000 600 600	11,200
20	Purchases A/c .......................................................... Dr. Input CGST A/c ........................................................ Dr. Input SGST A/c ........................................................ Dr.     To Cash A/c     To Vikram & Sons A/c (Being goods purchased @ 18% GST and half amount paid immediately)		1,20,000 10,800 10,800	70,800 70,800
25	Prakash & Co.'s A/c .................................................. Dr.     To Cash A/c     To Discount Received A/c (Being cash paid to Prakash & Co. and 10% cash discount received)		1,77,000	1,59,300 17,700
30	Sanjay's A/c ............................................................. Dr.     To Sales A/c (Being goods invoiced to Sanjay)		60,000	60,000
31	Sales Return A/c ...................................................... Dr.     To Sanjay's A/c (Being goods returned by Sanjay)		10,000	10,000
31	Cash A/c ................................................................... Dr. Bad Debts A/c ........................................................... Dr.     To Sanjay's A/c (Being Sanjay became insolvent and 50 paise in a rupee recovered as final settlement)		25,000 25,000	50,000
	Total		11,13,800	11,13,800

In simple words: A journal is a book where we record daily business transactions in a systematic order. We use the rules of debit and credit to show what comes in, what goes out, and who is involved in each transaction.

🎯 Exam Tip: Always calculate GST and discounts carefully before posting the final amounts to the ledger accounts. Double-check that the total debits equal total credits for every entry to avoid errors.

Journal Entries

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
10	Printing and Stationery A/c ................................................... Dr.     To Cash A/c (Being printing and stationery bill paid in cash)		7,000	7,000
12	Purchases A/c ....................................................................... Dr. Input CGST A/c ................................................................... Dr. Input SGST A/c ................................................................... Dr.     To Prakash & Co's A/c (Being goods purchased on credit with 18% GST from Prakash & company)		1,50,000 13,500 13,500	1,77,000
15	Transport charges A/c .......................................................... Dr. Input CGST A/c ................................................................... Dr. Input SGST A/c ................................................................... Dr.     To Cash A/c (Being transport charges with GST paid in cash)		10,000 600 600	11,200
20	Purchases A/c ....................................................................... Dr. Input CGST A/c ................................................................... Dr. Input SGST A/c ................................................................... Dr.     To Cash A/c     To Vikram & Sons A/c (Being goods purchase with 18% GST from Vikram & Sons and paid half of the amount)		1,20,000 10,800 10,800	70,800 70,800
25	Prakash & Co's A/c ............................................................. Dr.     To Cash A/c     To Discount A/c (Being cash paid to Prakash & Co and earned 10% cash discount)		1,77,000	1,59,300 17,700
30	Sanjay's A/c .......................................................................... Dr.     To Sales A/c (Being goods sold to Sanjay on Credit)		60,000	60,000
30	Sales Return A/c .................................................................. Dr.     To Sanjay's A/c (Being goods returned by Sanjay)		10,000	10,000
30	Cash A/c ............................................................................... Dr. Bad debts A/c ....................................................................... Dr.     To Sanjay's A/c (Being 50% of the amount due recovered from the estate of Sanjay)		25,000 25,000	50,000
	Total		11,13,800	11,13,800

Working Notes:

1. 2018, Nov. 1:
Amount credited to Bank A/c = Sales proceed – Brokerage @ 1%
\( = 1,000 \times 100 - \frac{1}{100} \times 1,000 \times 100 \)
\( = 1,00,000 - 1,000 \)
\( = \text{Rs. } 99,000 \)

2. Nov. 12:
Net Purchase price = Purchase price + 9% CGST + 9% SGST
\( = 1,50,000 + \frac{9}{100} \times 1,50,000 + \frac{9}{100} \times 1,50,000 \)
\( = 1,50,000 + 13,500 + 13,500 \)
\( = \text{Rs. } 1,77,000 \)

3. Nov. 20:
Net Purchase price = Purchase price + 9% CGST + 9% SGST
\( = 1,20,000 + \frac{9}{100} \times 1,20,000 + \frac{9}{100} \times 1,20,000 \)

 

Question 9. Journalise the following transactions in the books of Hero Enterprises.
Balance on 1st April 2019
Cash at Bank Rs. 80,000, Sundry Debtors Ram Rs. 20,000, Rahim Rs. 30,000, Stock Rs. 55,000, Building Rs. 1,50,000.
Credit Balances on 1st April 2019
Sundry Creditors Swapna Rs. 20,000, Rohit Rs. 30,000, Bank Loan Rs. 50,000.
2019 April
1 Purchased goods worth Rs. 1,50,000 from Prashant & Co., less 10% Trade Discount.
4 Sold goods to Mr. Amit Sharma Rs. 70,000 at 10% Trade Discount on credit.
9 Purchased goods for cash Rs. 2,00,000 @ 28% GST amount paid by NEFT.
12 Sold Goods to Aditya Ray of Rs. 90,000 @ 28% GST.
15 Paid for Rent Rs. 5000 and Salary Rs. 18,000.
17 Paid for Proprietor’s house Rent Rs. 12,000.
20 Sold half of the goods purchased on 9th April at 20% Profit and 28% GST.
25 Paid for Wages Rs. 1,500.
25 Purchased Furniture Rs. 1,80,000 @ 12% GST and amount paid by RTGS.
28 Sold an old Furniture of Rs. 20,000 for Rs. 12,000.
30 Sold shares of Rs. 10,000 for Rs. 15,000 and the amount received by cheque.

Answer:
Journal of Hero Enterprises

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2019 April 1	Bank A/c ... Dr. Ram's A/c ... Dr. Rahim's A/c ... Dr. Stock A/c ... Dr. Building A/c ... Dr.     To Swapna's A/c     To Rohit's A/c     To Bank Loan A/c     To Capital A/c (Balancing Figure) (Being opening balances of assets and liabilities recorded)		80,000 20,000 30,000 55,000 1,50,000	20,000 30,000 50,000 2,35,000
April 1	Purchase A/c ... Dr.     To Prashant & Co. A/c (Being goods purchased from Prashant & Co. at 10% Trade Discount)		1,35,000	1,35,000
April 4	Amit Sharma's A/c ... Dr.     To Sales A/c (Being goods sold to Amit Sharma at 10% Trade Discount on credit)		63,000	63,000
April 9	Purchase A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.     To Bank A/c (Being goods purchased for cash @ 28% GST and paid by NEFT)		2,00,000 28,000 28,000	2,56,000
April 12	Aditya Ray's A/c ... Dr.     To Sales A/c     To Output CGST A/c     To Output SGST A/c (Being goods sold to Aditya Ray @ 28% GST)		1,15,200	90,000 12,600 12,600
April 15	Rent A/c ... Dr. Salary A/c ... Dr.     To Bank A/c (Being rent and salary paid)		5,000 18,000	23,000
April 17	Drawings A/c ... Dr.     To Bank A/c (Being proprietor's house rent paid)		12,000	12,000
April 20	Bank A/c ... Dr.     To Sales A/c     To Output CGST A/c     To Output SGST A/c (Being half of the goods purchased on 9th April sold at 20% profit with 28% GST)		1,53,600	1,20,000 16,800 16,800
April 25	Wages A/c ... Dr.     To Cash A/c (Being wages paid)		1,500	1,500
April 25	Furniture A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.     To Bank A/c (Being furniture purchased @ 12% GST and paid by RTGS)		1,80,000 10,800 10,800	2,01,600
April 28	Bank A/c ... Dr. Loss on Sale of Furniture A/c ... Dr.     To Furniture A/c (Being old furniture sold at a loss)		12,000 8,000	20,000
April 30	Bank A/c ... Dr.     To Investment in Shares A/c     To Profit on Sale of Investment A/c (Being shares sold at profit and amount received by cheque)		15,000	10,000 5,000
	Total		13,30,900	13,30,900

Properly classifying each transaction ensures that the financial statements of Hero Enterprises reflect a true and fair view of its business operations.
In simple words: Journal entries are the first step in accounting where we record daily business transactions. We follow the rule of debiting what comes in or expenses, and crediting what goes out or income, while also accounting for taxes like GST.

🎯 Exam Tip: Always calculate GST on the net value after deducting the Trade Discount, and remember that Trade Discount is never recorded separately in the books of accounts.

 

Question 1. Journalise the transactions in the books of the business entity for April 2019.
Answer:

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 April 1	Bank A/c ...................................................................... Dr. Sundry Debtors A/c ...................................................... Dr. Stock of Goods A/c ...................................................... Dr. Building A/c .................................................................. Dr.     To Sundry Creditors A/c     To Bank Loan A/c     To Capital A/c (Being the balances of previous year brought forward)		80,000 50,000 55,000 1,50,000	50,000 50,000 2,35,000
1	Purchases A/c .............................................................. Dr.     To Prashant & Co.'s A/c (Being the goods purchased on credit from Prashant & Co. at 10% T.D.)		1,35,000	1,35,000
4	Mr. Amit Sharma's A/c .................................................. Dr.     To Sales A/c (Being goods purchased on credit from Mr. Amit Sharma @ 10% T.D.)		63,000	63,000
9	Purchases A/c .............................................................. Dr. Input CGST A/c ............................................................. Dr. Input SGST A/c ............................................................. Dr.     To Bank A/c (Being goods purchased with 28% GST and amount paid by NEFT)		2,00,000 28,000 28,000	2,56,000
12	Aditya Ray's A/c ............................................................ Dr.     To Sales A/c     To Output CGST A/c     To Output SGST A/c (Being goods sold on credit with 28% GST to Aditya Ray)		1,15,200	90,000 12,600 12,600
15	Rent A/c ........................................................................ Dr. Salary A/c ..................................................................... Dr.     To Cash A/c (Being rent and salary paid in cash)		5,000 18,000	23,000
17	Drawings A/c ................................................................. Dr.     To Cash A/c (Being proprietor's house rent paid from business fund)		12,000	12,000
20	Cash A/c ........................................................................ Dr.     To Sales A/c     To Output CGST A/c     To Output SGST A/c (Being the goods sold at 20% profit with 28% GST)		1,53,600	1,20,000 16,800 16,800
25	Wages A/c ..................................................................... Dr.     To Cash A/c (Being the wages paid in cash)		1,500	1,500
25	Furniture A/c ................................................................. Dr. Input CGST A/c ............................................................. Dr. Input SGST A/c ............................................................. Dr.     To Bank A/c (Being furniture purchased with 12% GST and amount paid by RTGS)		1,80,000 10,800 10,800	2,01,600
28	Cash A/c ........................................................................ Dr. Loss on sale of furniture A/c .......................................... Dr.     To Furniture A/c (Being furniture sold at a loss)		12,000 8,000	20,000
30	Bank A/c ........................................................................ Dr.     To Shares A/c     To Profit on sale of shares A/c (Being shares sold at a profit)		15,000	10,000 5,000
	Total		13,30,900	13,30,900

In simple words: A journal is a chronological record of all business transactions, showing which accounts are debited and which are credited along with a brief explanation called a narration.

🎯 Exam Tip: Always write clear narrations starting with 'Being' for each journal entry, and ensure that the total of the Debit and Credit columns match at the end.

Working Notes:
1. 2019 April, 20:

Working Notes

1. Cost of Goods sold = \( \frac{1}{2} \) of purchases on 9th April, 2019
\( = \frac{1}{2} \times 2,00,000 \)
\( = \text{Rs. } 1,00,000 \)
Selling price of Goods sold = \( \frac{120}{100} \times \text{Rs. } 1,00,000 = \text{Rs. } 1,20,000 \)

2. April, 28:
Loss on sale of furniture = Cost of furniture - Selling price
\( = 20,000 - 12,000 \)
\( = \text{Rs. } 8,000 \)

3. April, 30:
Profit on sale of shares = Selling price - Cost of shares
\( = 15,000 - 10,000 \)
\( = \text{Rs. } 5,000 \)

 

Question 10. Journalise the following transactions in the books of Harbhajan & Co. for the month of 1st April 2019.
Balance on 1st April 2019
Cash in hand Rs. 35,000, Cash at Bank Rs. 25,000, Furniture Rs. 1,50,000, Laptop Rs. 1,00,000
Debtors: Sangita Rs. 40,000, Viru Rs. 30,000
Creditors: Ganesh Rs. 10,000, Garima Rs. 40,000, Bank loan Rs. 50,000.
2019 April
1 Purchased goods from Ajay Kumar worth Rs. 2,50,000 at 10% Trade discount @ 18% GST and paid 1/4 amount in Cash.
5 Purchased shares of Infosys Company Rs. 50,000 and Rs. 500 paid as a brokerage for Demat A/c.
8 Sold goods to Raj worth Rs. 90,000 at 10% Trade discount and 1/3 amount received by cash and 5% cash discount is allowed.
12 Paid house rent of proprietor Rs. 9,000 and office rent Rs. 5,000.
15 Purchased Laptop of Rs. 60,000 @ 18% GST and paid amount by cheque.
20 Paid transport charges on the above Laptop Rs. 1,000 @ 18% GST.
25 Paid Commission Rs. 20,000 to Ram.
26 Paid Telephone Charges Rs. 1,000.
28 Transferred from private Bank A/c of proprietor to business Bank A/c Rs. 40,000.

Answer:
In the books of Harbhajan & Co.
Journal Entries

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2019 April 1	Cash A/c ... Dr. Bank A/c ... Dr. Furniture A/c ... Dr. Laptop A/c ... Dr. Sangita's A/c ... Dr. Viru's A/c ... Dr.   To Ganesh's A/c   To Garima's A/c   To Bank Loan A/c   To Capital A/c (Balancing figure) (Being opening balances of assets and liabilities recorded)		35,000 25,000 1,50,000 1,00,000 40,000 30,000	10,000 40,000 50,000 2,80,000
April 1	Purchase A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.   To Cash A/c   To Ajay Kumar's A/c (Being goods purchased at 10% TD and 18% GST, 1/4th amount paid in cash)		2,25,000 20,250 20,250	66,375 1,99,125
April 5	Investment in Shares of Infosys A/c ... Dr.   To Bank A/c (Being shares of Infosys purchased including brokerage charges)		50,500	50,500
April 8	Cash A/c ... Dr. Discount Allowed A/c ... Dr. Raj's A/c ... Dr.   To Sales A/c (Being goods sold at 10% TD, 1/3rd amount received in cash and 5% CD allowed)		25,650 1,350 54,000	81,000
April 12	Drawings A/c ... Dr. Office Rent A/c ... Dr.   To Cash A/c (Being house rent of proprietor and office rent paid)		9,000 5,000	14,000
April 15	Laptop A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.   To Bank A/c (Being laptop purchased at 18% GST and paid by cheque)		60,000 5,400 5,400	70,800
April 20	Laptop A/c ... Dr. Input CGST A/c ... Dr. Input SGST A/c ... Dr.   To Cash A/c (Being transport charges paid on laptop at 18% GST and capitalized)		1,000 90 90	1,180
April 25	Commission A/c ... Dr.   To Cash A/c (Being commission paid to Ram)		20,000	20,000
April 26	Telephone Charges A/c ... Dr.   To Cash A/c (Being telephone charges paid)		1,000	1,000
April 28	Bank A/c ... Dr.   To Capital A/c (Being personal bank balance transferred to business bank account as additional capital)		40,000	40,000
	Total		8,48,380	8,48,380

Working Notes:
1. Calculation of GST on Laptop purchase (April 15):
Laptop Cost = Rs. 60,000
CGST @ 9% = Rs. 5,400
SGST @ 9% = Rs. 5,400
Total paid by cheque = Rs. 70,800

2. Calculation of GST on Transport Charges (April 20):
Transport Charges = Rs. 1,000
CGST @ 9% = Rs. 90
SGST @ 9% = Rs. 90
Total paid = Rs. 1,180
These charges are capitalized to the Laptop account as they are directly related to bringing the asset to its working condition.

3. Calculation of Trade Discount and Cash Discount on Sales (April 8):
List Price = Rs. 90,000
Less: 10% Trade Discount = Rs. 9,000
Net Selling Price = Rs. 81,000
1/3rd Cash transaction = Rs. 27,000
Less: 5% Cash Discount = Rs. 1,350
Net Cash Received = Rs. 25,650
2/3rd Credit transaction (Raj) = Rs. 54,000

4. Calculation of Trade Discount and GST on Purchases (April 1):
List Price = Rs. 2,50,000
Less: 10% Trade Discount = Rs. 25,000
Net Purchase Price = Rs. 2,25,000
Add: CGST @ 9% = Rs. 20,250
Add: SGST @ 9% = Rs. 20,250
Total Amount = Rs. 2,65,500
1/4th Cash Paid = Rs. 66,375
3/4th Credit (Ajay Kumar) = Rs. 1,99,125

In simple words: Journalizing is the process of recording business transactions in chronological order. We apply the rules of double-entry bookkeeping to debit what comes in or is an expense, and credit what goes out or is an income.

🎯 Exam Tip: Always calculate trade discount before applying cash discount, and remember that trade discount is never recorded in the books of accounts.

 

Question. Journalise the following transactions in the books of Harbhajan & Co.:
(i) Bought goods for Rs. 1,50,000 @ 12% as GST by cheque.
(ii) Exchanged our Furniture of Rs. 30,000 against a Motor car of the same value for business.
Answer:

Journal of Harbhajan & Co.

Date	Particulars	L.F. No.	Debit Amount (Rs.)	Credit Amount (Rs.)
2019 April 1	Cash A/c ........................................................................ Dr. Bank A/c ........................................................................ Dr. Furniture A/c ................................................................. Dr. Laptop (Computer) A/c ................................................. Dr. Debtor A/c ..................................................................... Dr.     To Creditors A/c     To Bank Loan A/c     To Capital A/c (Being the balances of assets and liabilities brought forward and difference is transferred to capital a/c)		35,000 25,000 1,50,000 1,00,000 70,000	50,000 50,000 2,80,000
1	Purchases A/c ................................................................ Dr. Input CGST A/c ............................................................. Dr. Input SGST A/c ............................................................. Dr.     To Cash A/c     To Ajay Kumar's A/c (Being goods purchased @ 10% T.D. with 18% GST and 1/4 amount paid in cash)		2,25,000 20,250 20,250	66,375 1,99,125
5	Investments in shares of Infosys A/c ............................. Dr.     To Bank A/c (Being shares of Infosys Company Purchased and brokerage paid)		50,500	50,500
8	Cash A/c ........................................................................ Dr. Discount A/c ................................................................. Dr. Raj's A/c ........................................................................ Dr.     To Sales A/c (Being goods sold @10% T.D. and 5% C.D. 1/3 amount received in cash)		25,650 1,350 54,000	81,000
12	Drawings A/c ................................................................. Dr. Office Rent A/c ............................................................. Dr.     To Cash A/c (Being proprietors house rent and office rent paid in cash)		9,000 5,000	14,000

In simple words: A journal is like a daily diary for business transactions, where we write down what comes in (debit) and what goes out (credit) so we can keep track of our money.

🎯 Exam Tip: Always write clear narrations starting with 'Being' for each journal entry, as they carry specific marks in exams.

 

Question. Journalise the transactions in the books of the business and show the working notes for the transaction on 8th April 2019.
Answer:

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
15	Laptop (Computer) A/c ................................................................. Dr. Input CGST A/c .......................................................................... Dr. Input SGST A/c .......................................................................... Dr.     To Bank A/c (Being Laptop with 18% GST purchased and amount paid by cheque)		60,000 5,400 5,400	70,800
20	Laptop (Computer) A/c ................................................................. Dr. Input CGST A/c .......................................................................... Dr. Input SGST A/c .......................................................................... Dr.     To Cash A/c (Being transport charges with GST @ 18% paid in cash)		1,000 90 90	1,180
25	Commission A/c .......................................................................... Dr.     To Cash A/c (Being commission paid in cash)		20,000	20,000
26	Telephone charges A/c ................................................................. Dr.     To Cash A/c (Being telephone charges paid in cash)		1,000	1,000
28	Bank A/c .................................................................................... Dr.     To Capital A/c (Being the amount from private bank of proprietor transferred to business Bank A/c)		40,000	40,000
30	Purchases A/c ............................................................................. Dr. Input CGST A/c .......................................................................... Dr. Input SGST A/c .......................................................................... Dr.     To Bank A/c (Being goods purchased with 12% GST and amount paid by cheque)		1,50,000 9,000 9,000	1,68,000
30	Motor Car A/c ............................................................................. Dr.     To Furniture A/c (Being furniture exchanged for businesses motor car)		30,000	30,000
Total			11,21,980	11,21,980

Working Notes:
1. 8 April 2019:
Net selling price = Selling price – 10% Trade discount
\( = 90,000 - 10\% \text{ on } 90,000 \)
\( = 90,000 - 9,000 \)
\( = \text{Rs. } 81,000 \)
Cash received = \( \frac{1}{3} \) of 81,000
\( = \frac{1}{3} \times 81,000 \)
\( = \text{Rs. } 27,000 \)
Net cash received = 27,000 – Cash discount @ 5%
\( = 27,000 - \frac{5}{100} \times 27,000 \)
\( = 27,000 - 1,350 \)
\( = \text{Rs. } 25,650 \)
Credit sale = \( \frac{2}{3} \) of 81,000
\( = \frac{2}{3} \times 81,000 \)
\( = \text{Rs. } 54,000 \)
In simple words: This journal records daily business transactions like purchasing a laptop with GST, paying transport charges, receiving commission, and exchanging furniture for a motor car, along with step-by-step calculations for trade and cash discounts.

🎯 Exam Tip: Always show detailed working notes for trade discount and cash discount calculations to secure full marks, and ensure your journal totals on both debit and credit sides match perfectly.

12th Secretarial Practice Practical Problems Solutions

• 12th Secretarial Practice Chapter 8 Exercise Correspondence with Depositors Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 7 Exercise Correspondence with Debentureholders Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 6 Exercise Correspondence with Members Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 5 Exercise Deposits Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 4 Exercise Issue of Debentures Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 3 Exercise Issue of Shares Practical Problems Solutions Maharashtra Board
• 12th Secretarial Practice Chapter 2 Exercise Sources of Corporate Finance Practical Problems Solutions Maharashtra Board