Maharashtra Board Class 11 Commerce BK Chapter 5 Subsidiary Books Solutions

Class 11 Commerce Bk Chapter 5 Exercise Solutions

Objective Type Questions & Answers

1. Answer The Following Questions In One Sentence.

Question 1.What are Subsidiary Books?
Answer: Subdivision of journals on the basis of nature of transactions is known as Subsidiary Books.
In simple words: Subsidiary books are specialized journals used to record similar types of transactions, making the journaling process more efficient. They help categorize transactions like cash, purchases, and sales before posting to the ledger.

🎯 Exam Tip: Understanding the basic definition of subsidiary books is crucial for foundational accounting knowledge and can fetch easy marks.

 

Question 2.What is a Cash Book?
Answer: The subsidiary book in which details of cash are received in the form of cash, cheques, drafts, etc., and details of payment made in the form of cash, cheques, drafts, etc. is called a cash book.
In simple words: A cash book is a record of all cash receipts and payments, including transactions made via bank, acting as both a journal and a ledger for cash.

🎯 Exam Tip: Focus on remembering that a cash book serves as both a primary entry book (journal) and a ledger account for cash and bank transactions.

 

Question 3.State the meaning of 'Contra entry'.
Answer: The accounting entries which appear on both the sides of cash book are called contra entries.
In simple words: A contra entry is a transaction that affects both the cash and bank columns of a cash book, with equal and opposite entries on the debit and credit sides.

🎯 Exam Tip: It's important to identify common contra entries, such as cash deposited into the bank or cash withdrawn from the bank for office use, as these are frequently tested.

 

Question 4.State the meaning of the imprest system of Petty Cash Book.
Answer: Imprest System of Petty cash book is a system in which head cashier gives fixed (imprest) amount to the petty cashier at the beginning of month/fortnight to meet the expenses of that period. Later on the shortfall after meeting the expenses is reimbursed by the head cashier.
In simple words: In the imprest system, a petty cashier receives a fixed amount at the start of a period; at the end, they are reimbursed for the exact amount spent, restoring the fund to its original fixed sum.

🎯 Exam Tip: Highlight that the core idea of the imprest system is maintaining a fixed balance by reimbursing only the amount spent, ensuring strict control over petty cash expenses.

 

Question 5.Which transactions are recorded in Purchase Book?
Answer: Goods purchased on credit for resale are only recorded in the Purchase Book.
In simple words: The Purchase Book exclusively records transactions where goods are bought on credit, specifically for the purpose of reselling them.

🎯 Exam Tip: Emphasize the two key conditions for a transaction to be recorded in the purchase book: it must be a credit purchase, and it must be for goods meant for resale, not assets.

 

Question 6.Which sales are recorded in Sales Book?
Answer: Credit sales of goods are recorded in Sales Book.
In simple words: The Sales Book is used to record only those sales where goods are sold on credit, meaning payment is received at a later date.

🎯 Exam Tip: Remember that only credit sales of goods are entered in the Sales Book; cash sales go into the Cash Book, and sales of assets on credit are recorded in the Journal Proper.

 

Question 7.Which transactions are recorded in the Journal Proper?
Answer: Journal Proper is meant for recording opening entries, closing entries, adjustment entries, transfer entries, and rectification entries.
In simple words: The Journal Proper is a residual journal used for all transactions that do not fit into any other specialized subsidiary book, such as non-cash, non-credit purchase/sale of goods, or adjustment entries.

🎯 Exam Tip: Think of the Journal Proper as a "catch-all" book for unique or non-routine entries that don't belong in the cash book, purchase book, or sales book.

 

Question 8.Who is a Petty Cashier?
Answer: A cashier in charge of recording transactions in a petty cash book is known as Petty Cashier.
In simple words: A petty cashier is an individual responsible for managing and recording small, day-to-day cash expenses of a business.

🎯 Exam Tip: Differentiate a petty cashier from a head cashier; the petty cashier handles small, regular expenses, while the head cashier manages the main cash fund.

 

2. Give A Word/Term Or Phrase For Each Of The Following Statements:

Question 1.A person who maintains Petty Cash Book.
Answer: Petty Cashier
In simple words: The individual managing small cash expenses and their records is called the Petty Cashier.

🎯 Exam Tip: This is a straightforward recall question; ensure you accurately associate the role with the book maintained.

 

Question 2.A bank account which the businessman prefers to open.
Answer: Current Account
In simple words: Businessmen typically use a current account for frequent transactions as it allows unlimited deposits and withdrawals.

🎯 Exam Tip: Understand that current accounts are suitable for businesses due to their high transaction volume and overdraft facilities, unlike savings accounts.

 

Question 3.Petty Cash Book in which the payment side is ruled in suitable columns.
Answer: Analytical Petty Cash Book
In simple words: An Analytical Petty Cash Book organizes the payment side into different columns, allowing for easy classification and summary of various small expenses.

🎯 Exam Tip: The term "analytical" refers to the classification of expenses into separate columns, which is the defining feature of this type of petty cash book.

 

Question 4.Subsidiary book in which only credit purchases of goods are recorded.
Answer: Purchase Book
In simple words: The Purchase Book is specifically designed to record all goods bought on credit, not cash purchases or asset purchases.

🎯 Exam Tip: Remember the specific scope of the Purchase Book-only credit purchases of goods-to avoid common errors in identifying transaction types.

 

Question 5.Subsidiary book in which return of goods sold on credit is recorded.
Answer: Sales Return Book
In simple words: When customers return goods previously bought on credit, these transactions are documented in the Sales Return Book.

🎯 Exam Tip: Differentiate between Purchase Return Book (for goods returned *to* suppliers) and Sales Return Book (for goods returned *by* customers).

 

Question 6.The entry is recorded on both sides of the cash book.
Answer: Contra Entry
In simple words: A contra entry is an accounting transaction where identical amounts are recorded on both the debit and credit sides of the cash book, typically involving cash and bank accounts.

🎯 Exam Tip: Contra entries are crucial for balancing the cash and bank columns within a double-column cash book, signifying an internal transfer of funds.

 

Question 7.Name the account which encourages personal savings.
Answer: Saving Account
In simple words: A savings account is a deposit account that earns interest, designed to encourage individuals to save money.

🎯 Exam Tip: Savings accounts are primarily for personal accumulation of funds, offering interest, while current accounts are for frequent business transactions.

 

Question 8.A note was issued by the buyer to the seller giving full details of goods returned.
Answer: Debit Note
In simple words: A debit note is a document sent by the buyer to the seller to formally inform them of a return of goods and to request a debit to the seller's account.

🎯 Exam Tip: Remember that a debit note is issued by the buyer for purchase returns, while a credit note is issued by the seller for sales returns.

 

Question 9.A note was issued by the seller on receipt of defective goods from the customer.
Answer: Credit Note
In simple words: A credit note is a document issued by a seller to a buyer to acknowledge receipt of returned goods or to grant an allowance, reducing the amount the buyer owes.

🎯 Exam Tip: Distinguish the issuer and purpose: the seller issues a credit note to the buyer when goods are returned, effectively crediting the buyer's account.

 

Question 10.Name the bank account on which overdraft facility is given to the Account holder.
Answer: Current Account
In simple words: An overdraft facility, which allows withdrawal of more money than available in the account up to a limit, is typically provided on current accounts.

🎯 Exam Tip: Overdraft facilities are a common feature of current accounts, designed to help businesses manage short-term liquidity, and are not usually offered on savings or fixed deposit accounts.

 

3. Select The Most Appropriate Answers From The Alternatives Given Below And Rewrite The Sentences.

Question 1.Cash column of Cash Book can never have __________ balance.
(a) credit
(b) debit
(c) zero
(d) none of the above
Answer: (a) credit
In simple words: The cash column of a Cash Book can never show a credit balance because you cannot pay out more cash than you physically possess.

🎯 Exam Tip: This is a fundamental principle of accounting: cash cannot be negative. Therefore, the cash column will always have a debit or zero balance.

 

Question 2.Any entry recorded on both sides of Cash Book is known as __________ entry.
(a) opening
(b) rectifying
(c) transfer
(d) contra
Answer: (d) contra
In simple words: An entry affecting both the cash and bank columns of the cash book, debited in one and credited in the other, is called a contra entry.

🎯 Exam Tip: Identify contra entries by the "C" symbol in the Ledger Folio column on both sides of the cash book.

 

Question 3.The source document for recording in Sales book is __________
(a) Inward Invoice
(b) Outward Invoice
(c) Voucher
(d) Cash Memo
Answer: (b) Outward Invoice
In simple words: An outward invoice is the document issued by a seller to a buyer detailing goods sold on credit, serving as the basis for recording in the Sales Book.

🎯 Exam Tip: Distinguish between inward (purchase) and outward (sales) invoices; outward invoices are always for credit sales.

 

Question 4.Credit purchase of Machinery is recorded in the __________
(a) Purchase Book
(b) Cash Book
(c) Journal Proper
(d) Returns Outward Book
Answer: (c) Journal Proper
In simple words: Since machinery is an asset and its credit purchase doesn't fit into the Purchase Book (which is for goods) or the Cash Book (as it's credit), it is recorded in the Journal Proper.

🎯 Exam Tip: Remember that credit purchases of assets, unlike goods, are always recorded in the Journal Proper because subsidiary books are specialized for regular business transactions of goods.

 

Question 5.Sub-division of journal is known as __________ book.
(a) Subsidiary
(b) Purchase Return
(c) Purchase
(d) Journal Proper
Answer: (a) Subsidiary
In simple words: Breaking down the main journal into several specialized books, each for a specific type of transaction, creates subsidiary books.

🎯 Exam Tip: Subsidiary books are essentially specialized journals designed to simplify the recording of high-volume, repetitive transactions.

 

Question 6.Additional cash introduced in business is recorded in __________
(a) Purchase Book
(b) Cash Book
(c) Journal Proper
(d) Returns Inwards Book
Answer: (b) Cash Book
In simple words: Any additional cash brought into the business is a cash receipt and therefore recorded on the debit side of the Cash Book.

🎯 Exam Tip: All cash inflows, whether from capital introduction, sales, or other sources, are recorded in the cash book.

 

Question 7.Entry for bad debts is recorded in the __________
(a) Sales Book
(b) Purchase Book
(c) Cash Book
(d) Journal Proper
Answer: (d) Journal Proper
In simple words: Bad debts, being a non-cash adjustment entry that doesn't involve credit purchase/sale of goods, are recorded in the Journal Proper.

🎯 Exam Tip: Bad debts represent an expense from uncollectible receivables and are typically adjusted at the end of an accounting period, making the Journal Proper the appropriate place for such entries.

 

Question 8.Direct deposit made by the customer into our bank is recorded in the __________ side of the Cash Book.
(a) payments
(b) credit
(c) receipts
(d) both
Answer: (c) receipts
In simple words: When a customer directly deposits money into the business's bank account, it's a receipt of funds, thus recorded on the debit (receipts) side of the Cash Book.

🎯 Exam Tip: All inflows of funds, whether cash or bank, are recorded on the debit side of the Cash Book.

 

Question 9.The person who draws the cheque and signs on it is the __________
(a) drawer
(b) drawee
(c) payee
(d) all of the above
Answer: (a) drawer
In simple words: The person who writes and signs a cheque, instructing the bank to pay a specific sum, is known as the drawer.

🎯 Exam Tip: Understand the three parties to a cheque: the drawer (who writes it), the drawee (the bank), and the payee (who receives the money).

 

Question 10.A fixed amount is deposited for a fixed period in __________ deposit account.
(a) Current
(b) Savings
(c) Fixed
(d) Recurring
Answer: (c) Fixed
In simple words: A fixed deposit account requires a lump sum to be deposited for a predetermined period, offering a fixed rate of interest.

🎯 Exam Tip: Fixed deposits are for long-term savings where funds are not needed immediately, as withdrawal before maturity may incur penalties.

 

4. State Whether The Following Statements Are True Or False With Reasons:

Question 1.Journal is a book of secondary entry.
Answer: This statement is False. Journal is a book of prime entry.
In simple words: The journal is where transactions are first recorded systematically, making it a book of original or prime entry, not secondary.

🎯 Exam Tip: Differentiate prime entry (journal) from secondary entry (ledger); the journal records transactions chronologically, while the ledger classifies them by account.

 

Question 2.Assets sold on credit are entered in Sales Journal.
Answer: This statement is False. Assets sold on credit are entered in Journal Proper.
In simple words: The Sales Journal is exclusively for credit sales of goods; selling assets on credit requires an entry in the Journal Proper.

🎯 Exam Tip: Be precise about the scope of subsidiary books; the Sales Journal is only for *goods*, not *assets*. This is a common point of confusion.

 

Question 3.Cash and credit purchases are entered in Purchase Book.
Answer: This statement is False. Only credit purchases are entered in Purchase Book.
In simple words: The Purchase Book records only goods bought on credit; cash purchases are recorded in the Cash Book.

🎯 Exam Tip: It's critical to remember that the Purchase Book strictly handles credit purchases of goods, keeping cash transactions separate in the Cash Book.

 

Question 4.Cash sales are entered in Sales Journal.
Answer: This statement is False. Cash sales are entered in the cash book.
In simple words: Cash sales involve immediate cash receipts and are therefore recorded in the Cash Book, not the Sales Journal which is for credit sales.

🎯 Exam Tip: Reinforce the rule that all cash transactions, whether receipts or payments, belong in the Cash Book.

 

Question 5.Cash Book records transactions relating to receipts and payments of cash.
Answer: This statement is True. Cashbook is prepared for cash transactions only. All incomes are receipts and they are recorded on the debit side of Cashbook. All expenses are payments recorded to the credit side.
In simple words: The Cash Book serves as a comprehensive record for all money coming into (receipts) and going out of (payments) the business, whether actual cash or bank transactions.

🎯 Exam Tip: This statement covers the fundamental purpose of the Cash Book, emphasizing its role in tracking all cash and bank inflows and outflows.

 

5. Do You Agree With The Following Statements.

Question 1.Trade discount is recorded in Cash Book.
Answer: Disagree
In simple words: Trade discount is a reduction in the list price of goods and is usually not recorded in the books of accounts; only the net amount after discount is recorded.

🎯 Exam Tip: Always remember that trade discount is deducted at the time of sale/purchase itself and the transaction is recorded at the net amount, thus it never appears in the Cash Book.

 

Question 2.Petty Cash Book is a book with having a record of big payments.
Answer: Disagree
In simple words: The Petty Cash Book is specifically designed to record small, minor, and routine payments, not large or significant expenditures.

🎯 Exam Tip: Emphasize that "petty" implies small amounts; large payments are handled by the main cash book or bank account.

 

Question 3.Cash received is entered on the debit side of the Cash Book.
Answer: Agree
In simple words: All cash inflows, representing an increase in assets, are recorded on the debit side of the Cash Book as per the rules of double-entry bookkeeping.

🎯 Exam Tip: This aligns with the "debit what comes in, credit what goes out" rule for real accounts like cash and bank, a core accounting principle.

 

Question 4.Transactions recorded on both debit and credit side of Cash Book is known as Contra Entry.
Answer: Agree
In simple words: A contra entry is a transaction that simultaneously affects both the cash and bank columns of a cash book, appearing on both sides with equal amounts.

🎯 Exam Tip: Contra entries are a common occurrence in cash books and understanding them is crucial for correctly balancing the book.

 

Question 5.Credit purchase of machinery is entered in Purchase Journal.
Answer: Disagree
In simple words: The Purchase Journal is only for credit purchases of goods for resale; a credit purchase of machinery, being an asset, is recorded in the Journal Proper.

🎯 Exam Tip: Clearly differentiate between "goods" (for resale, recorded in Purchase Book) and "assets" (for business use, recorded in Journal Proper if on credit).

 

6. Complete The Following Sentences:

Question 1.Cash Book is a __________ Journal.
Answer: Subsidiary
In simple words: The Cash Book is one of the specialized journals that form part of the subsidiary books system, specifically for cash transactions.

🎯 Exam Tip: Subsidiary books are essentially sub-journals, making the Cash Book a type of subsidiary journal focusing on cash and bank entries.

 

Question 2.In Journal Proper, only __________ discount is recorded.
Answer: Cash
In simple words: Cash discount, offered for prompt payment, is recorded in the Journal Proper if it's not directly impacting the cash book (e.g., in a compound entry, though it is usually handled in cash/bank records). Trade discount is not recorded at all.

🎯 Exam Tip: Cash discounts are financial incentives for early payment and thus impact financial records, unlike trade discounts which are merely price reductions.

 

Question 3.Return of goods purchased on credit to the suppliers will be entered in __________ Journal.
Answer: Purchase return
In simple words: When a business returns goods it previously bought on credit, this transaction is recorded in the Purchase Return Journal (also known as Returns Outward Book).

🎯 Exam Tip: The Purchase Return Journal is specifically for goods returned *to* suppliers, distinguishing it from sales returns.

 

Question 4.Assets sold on credit are entered in __________
Answer: Journal proper
In simple words: The sale of assets on credit, not being a regular trade transaction of goods, is recorded in the Journal Proper.

🎯 Exam Tip: Always categorize transactions carefully: sales of *goods* go into the Sales Book, but sales of *assets* (especially on credit) go into the Journal Proper.

 

Question 5.Double column Cash Book records transactions relating to cash and __________
Answer: Bank
In simple words: A double column cash book tracks both cash-in-hand and cash-at-bank transactions simultaneously.

🎯 Exam Tip: There are single, double, and triple column cash books, each adding more types of accounts (cash, bank, and discount respectively) to the record-keeping.

 

Question 6.Credit purchases of goods are recorded in __________
Answer: Purchase Book
In simple words: Any goods bought on credit, with payment deferred, are exclusively documented in the Purchase Book.

🎯 Exam Tip: This is a core function of the Purchase Book; distinguishing credit purchases of goods from other types of transactions is key.

 

Question 7.Cash Book does not record the __________ Transactions.
Answer: Credit
In simple words: The Cash Book strictly deals with transactions involving immediate cash or bank movement, hence it does not record credit transactions (where payment is deferred).

🎯 Exam Tip: The Cash Book is designed for cash basis accounting for receipts and payments, not accrual basis entries for credit transactions which go to other subsidiary books or the Journal Proper.

 

Question 8.Credit balance shown by a bank column in Cash Book is __________
Answer: Overdraft
In simple words: A credit balance in the bank column indicates that the business has withdrawn more money than it had in its account, signifying a bank overdraft.

🎯 Exam Tip: Unlike the cash column which cannot have a credit balance, the bank column *can* have a credit balance, which represents a liability (overdraft).

 

Question 9.Petty Cash Book is used for recording __________ expenses.
Answer: Petty
In simple words: The Petty Cash Book is designated for tracking minor or small-value expenses that are impractical to record in the main Cash Book.

🎯 Exam Tip: The term "petty" means small; therefore, the Petty Cash Book is exclusively for small, day-to-day expenses.

 

Question 10.In Purchase Book goods purchased on __________ are recorded.
Answer: Credit
In simple words: The Purchase Book records only those transactions where goods are acquired with an agreement to pay at a future date.

🎯 Exam Tip: This reinforces the specific function of the Purchase Book: solely for credit purchases of items meant for resale.

 

7. Correct The Following Sentences And Rewrite Them The Same.

Question 1.Cash purchases of goods are recorded in the Purchase book.
Answer: Cash purchases of goods are recorded in Cashbook.
In simple words: Transactions involving immediate cash payment for goods are recorded in the Cashbook, not the Purchase Book, which is for credit purchases.

🎯 Exam Tip: Always distinguish between cash and credit transactions. Cash transactions (for goods or assets) go to the Cashbook, while credit purchases of goods go to the Purchase Book.

 

Question 2.Cash Book records cash transactions as well as credit transactions.
Answer: Cash Book records only cash transactions.
In simple words: The Cash Book strictly records transactions where cash or bank funds are directly involved, excluding any credit-based dealings.

🎯 Exam Tip: The Cash Book is a reflection of cash movements, so credit transactions, which involve delayed payments, are recorded in other subsidiary books or the Journal Proper.

 

Question 3.Small and large business records all transactions in subsidiary books.
Answer: Large business records all transactions in subsidiary books.
In simple words: Large businesses utilize subsidiary books to efficiently handle a high volume of similar transactions, while smaller businesses might use a single journal.

🎯 Exam Tip: Subsidiary books are an efficiency tool primarily for larger organizations to manage voluminous and repetitive transactions more effectively.

 

Question 4.The person who maintains the Petty Cash Book is called Chief Cashier.
Answer: The person who maintains the Petty Cash Book is called Petty Cashier.
In simple words: The individual specifically assigned to handle and record petty cash expenses is known as the Petty Cashier.

🎯 Exam Tip: Differentiate roles: the Chief Cashier manages the main cash, while the Petty Cashier handles minor disbursements.

 

8. Calculate The Following.

Question 1.Cash purchases for Rs. 1,60,000 at 10% T.D. and 5% C.D. What is the amount of Net purchases?
Answer:
Gross Price = Rs. 1,60,000
Less: 10% T.D. = Rs. 16,000
Net Price = Rs. 1,44,000
Less: 5% C.D. = Rs. 7,200
Net Purchases = Rs. 1,36,800
In simple words: To find net purchases, first deduct the trade discount from the gross price, then calculate and deduct the cash discount from the remaining amount.

🎯 Exam Tip: Always calculate trade discount first, then cash discount on the balance. Trade discount is not recorded, but cash discount is if availed.

 

Question 2.Purchased goods from Harish for Rs. 12,000 @ 7% T.D. What is the amount of Trade discount?
Answer:
Trade Discount = Purchases Price × Percentage of T.D.
= 12,000 × \( \frac{7}{100} \)
= Rs. 840
In simple words: The trade discount is calculated by multiplying the original purchase price by the given trade discount percentage.

🎯 Exam Tip: Trade discount is a straightforward percentage calculation on the list price and reduces the invoice value, but is not recorded in the books.

 

Question 3.Sold 50 Shirts at 300 per shirt and 40 Trousers at 600 each. What is the amount of sales?
Answer:
(1) 50 Shirts × Rs. 300 = Rs. 15,000
(2) 40 Trousers × Rs. 600 = Rs. 24,000
Total Sales = Rs. 39,000
In simple words: To find the total sales amount, calculate the value of each item type sold and then sum up these individual values.

🎯 Exam Tip: Ensure to calculate the value for each distinct item category separately before adding them up for total sales.

 

Question 4.Sold 30 Jackets at Rs. 500 per Jacket at 8% Trade discount, What is the amount of Trade discount?
Answer:
Sales Value = 30 Jackets × Rs. 500 = Rs. 15,000
Trade Discount = 15,000 × \( \frac{8}{100} \) = Rs. 1,200
In simple words: First, calculate the total value of the jackets before discount, then apply the trade discount percentage to this value to find the discount amount.

🎯 Exam Tip: When calculating trade discount, it's always applied to the gross value of the goods before any other adjustments.

 

9. Complete The Following Table.

Question 1.

Cash Purchases		Credit purchases		Purchase Return		Net Purchases
35,000	+	55,000	-	?	=	88,000

Answer:

Cash Purchases		Credit purchases		Purchase Return		Net Purchases
35,000	+	55,000	-	2,000	=	88,000

In simple words: To find the Purchase Return, subtract the sum of Cash Purchases and Credit Purchases from Net Purchases, then reverse the sign. Alternatively, Sum of Cash Purchases and Credit Purchases \( - \) Net Purchases \( = \) Purchase Return. \( (35,000 + 55,000) - 88,000 = 90,000 - 88,000 = 2,000 \).

🎯 Exam Tip: Remember the formula: Net Purchases = (Cash Purchases + Credit Purchases) - Purchase Returns. Rearrange to find the missing element.

 

Question 2.

Cash Sales		Credit Sales		Sales Return		Total Sales
?	+	60,000	-	3,000	=	1,02,000

Answer:

Cash Sales		Credit Sales		Sales Return		Total Sales
45,000	+	60,000	-	3,000	=	1,02,000

In simple words: To find Cash Sales, add Sales Return to Total Sales, then subtract Credit Sales. Total Sales + Sales Return - Credit Sales \( = \) Cash Sales. \( 1,02,000 + 3,000 - 60,000 = 45,000 \).

🎯 Exam Tip: The formula is: Total Sales = Cash Sales + Credit Sales - Sales Return. Use this to isolate the unknown variable.

 

Question 3.

Cash Sales		Credit Sales		Trade discount		Total Sales
90,000	+	1,10,000	-	16,000	=	?

Answer:

Cash Sales		Credit Sales		Trade discount		Total Sales
90,000	+	1,10,000	-	16,000	=	1,84,000

In simple words: Total Sales are calculated by adding Cash Sales and Credit Sales, then subtracting any Trade discount. \( 90,000 + 1,10,000 - 16,000 = 1,84,000 \).

🎯 Exam Tip: Remember to deduct trade discount to arrive at the net sales value before summing up total sales.

 

Question 4.

Cash Purchases		Credit purchases		Trade discount		Net Purchases
70,000	+	?	-	18,000	=	1,62,000

Answer:

Cash Purchases		Credit purchases		Trade discount		Net Purchases
70,000	+	1,10,000	-	18,000	=	1,62,000

In simple words: To find Credit Purchases, add Net Purchases and Trade Discount, then subtract Cash Purchases. Net Purchases + Trade Discount - Cash Purchases \( = \) Credit Purchases. \( 1,62,000 + 18,000 - 70,000 = 1,10,000 \).

🎯 Exam Tip: Understand that Trade Discount is usually applied before calculating net purchases, so include it when reversing the calculation to find a missing component.

 

Question 5.

Opening cash Balance		Cash Receipts		Cash Payments		Total cash
?	+	60,000	-	45,000	=	23,000

Answer:

Opening cash Balance		Cash Receipts		Cash Payments		Total cash
8,000	+	60,000	-	45,000	=	23,000

In simple words: To find the Opening Cash Balance, take the Total Cash, add Cash Payments, and then subtract Cash Receipts. Total cash + Cash Payments - Cash Receipts \( = \) Opening cash Balance. \( 23,000 + 45,000 - 60,000 = 8,000 \).

🎯 Exam Tip: The fundamental cash flow equation is: Opening Balance + Receipts - Payments = Closing Balance. Use this to find any missing component.

 

Question 6.

Cash Sales		Credit Sales		Total Sales		Total Debtors
1,20,000	+	1,40,000	=	2,60,000	-	?

Answer:

Cash Sales		Credit Sales		Total Sales		Total Debtors
1,20,000	+	1,40,000	=	2,60,000	-	1,40,000

In simple words: The "Total Debtors" value refers to the outstanding credit sales which result in debtors. Therefore, Total Debtors is equivalent to the Credit Sales amount.

🎯 Exam Tip: Total Debtors arise from credit sales; hence, if no other information is provided, the value of Credit Sales represents the initial amount of Total Debtors for the period.

 

Question 7.

Cash Purchases		Credit purchases		Total Purchases		Total Creditors
80,000	+	?	=	1,90,000	-	1,10,000

Answer:

Cash Purchases		Credit purchases		Total Purchases		Total Creditors
80,000	+	1,10,000	=	1,90,000	-	1,10,000

In simple words: Total Creditors represent the amount owed for credit purchases. Therefore, the missing Credit Purchases amount is equal to the Total Creditors value, which is Rs. 1,10,000. Alternatively, Total Purchases - Cash Purchases = Credit Purchases \( \implies 1,90,000 - 80,000 = 1,10,000 \).

🎯 Exam Tip: Total Creditors arise solely from credit purchases; thus, if no other information about payments is given, the credit purchases for the period equal the total creditors generated.

 

Question 8.

Opening Petty Cash Balance		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
250	+	1,750	-	?	=	420

Answer:

Opening Petty Cash Balance		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
250	+	1,750	-	1,580	=	420

In simple words: To find Petty Expenses Paid, add Opening Petty Cash Balance and Petty Cash Received, then subtract the Closing Petty Cash Balance. \( (250 + 1,750) - 420 = 2,000 - 420 = 1,580 \).

🎯 Exam Tip: The formula for petty cash is: Opening Balance + Receipts - Payments = Closing Balance. Rearrange to solve for the unknown.

 

Question 9.

Opening Petty Cash		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
400	+	?	-	1,800	=	250

Answer:

Opening Petty Cash		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
400	+	1,650	-	1,800	=	250

In simple words: To find Petty Cash Received, add Petty Expenses Paid and Closing Petty Cash Balance, then subtract the Opening Petty Cash. \( 1,800 + 250 - 400 = 1,650 \).

🎯 Exam Tip: For the imprest system, Petty Cash Received usually equals Petty Expenses Paid if the fund is topped up to its original amount.

 

Question 10.

Opening Petty Cash Balance		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
?	+	1,800	-	2,250	=	150

Answer:

Opening Petty Cash Balance		Petty Cash Received		Petty Expenses Paid		Closing Petty Cash Balance
600	+	1,800	-	2,250	=	150

In simple words: To find the Opening Petty Cash Balance, add Petty Expenses Paid and Closing Petty Cash Balance, then subtract Petty Cash Received. \( 2,250 + 150 - 1,800 = 600 \).

🎯 Exam Tip: Reversing the petty cash flow equation helps in finding the starting balance when other figures are known.

 

Practical Problems

Question 1.Prepare a two-column Cash Book with the help of the following information for January 2018.

January 2018		Amt (Rs.)
01	Started business with cash	1,20,000
03	Cash paid into Bank of Baroda	50,000
05	Purchased goods from Sakshi on credit	20,000
06	Sold goods to Divakar and received a bearer cheque	20,000
10	Paid to Sakshi cash	20,000
14	Cheque received on December 06, 2018, deposited into Bank
18	Sold goods to Shivaji on credit	12,000
20	Cartage paid in cash	500
22	Received cash from Shivaji	12,000
27	Commission received	5,000
30	Drew cash for personal use	2,000

Solution: In the books of __________
Answer:

In the books of (Proprietor's Name, e.g., M/s. [Business Name])

Dr. Cash Book						Cr.
Date	Receipts	R. No.	LF No.	Cash Rs.	Bank Rs.	Date	Payments	V. No.	LF No.	Cash Rs.	Bank Rs.
2019 Jan. 1	To Capital A/c (Being business started with cash)			1,20,000	-	2019 Jan. 3	By Bank A/c (Being cash deposited into Bank of Baroda)		C	50,000	-
Jan. 3	To Cash A/c (Being cash deposited into Bank of Baroda)		C	-	50,000	Jan. 10	By Sakshi A/c (Being cash paid to Sakshi)			20,000	-
Jan. 6	To Sales A/c (Being goods sold and bearer cheque received)			20,000	-	Jan. 14	By Bank A/c (Being bearer cheque received from Divakar deposited into bank)		C	-	20,000
Jan. 14	To Cash A/c (Being bearer cheque received from Divakar deposited into bank)		C	20,000	-	Jan. 20	By Cartage A/c (Being cartage paid)			500	-
Jan. 22	To Shivaji A/c (Being cash received from Shivaji)			12,000	-	Jan. 30	By Drawings A/c (Being cash withdrawn for personal use)			2,000	-
Jan. 27	To Commission A/c (Being commission received)			5,000	-	Jan. 31	By Balance c/d			64,500	70,000
				1,57,000	70,000					1,57,000	70,000
Feb. 1	To Balance b/d			64,500	70,000

Note: Transactions dated 5th and 18th are credit transactions, hence not to be recorded in the cash book.
In simple words: This cash book records all cash and bank receipts on the debit side and all cash and bank payments on the credit side, carefully handling contra entries and excluding credit transactions. The final balances for cash and bank are carried forward.

🎯 Exam Tip: Pay close attention to contra entries marked 'C' in the LF column and ensure that credit transactions (like purchased goods on credit or sold goods on credit) are explicitly *excluded* from the Cash Book. Always calculate the closing balance carefully.

Question 2. Prepare a two-column Cash Book from the following transaction for the year July 2018.

July 2018	Amt (Rs.)
01	Cash in hand	17,500
01	Cash at Bank	5,000
03	Purchased goods for cash	3,000
05	Received cheque from Arun	10,000
08	Sold goods for cash	8,000
10	Arun's cheque deposited into the bank	–
12	Purchased goods and paid by cheque	20,000
15	Paid establishment expenses through bank	1,000
18	Cash Sales	7,000
20	Deposited into bank	10,000
24	Paid General Expenses	500
27	Received commission by Cross cheque	6,000
29	Paid Rent	2,000
30	Withdrew cash for personal use	1,200
31	Wages paid	6,000

Answer:

Solution:

In the books of

Dr. Cash Book						Cr.
Date	Receipts	R. No.	L.F.	Cash Rs.	Bank Rs.	Date	Payments	V. No.	L.F.	Cash Rs.	Bank Rs.
2018 July 1	To Balance b/d			17,500	5,000	2018 July 3	By Purchases A/c (Being cash purchases of goods)			3,000	-
5	To Arun A/c (Being cheque received from Arun)			-	10,000	10	By Bank A/c (Being cheque of Arun deposited into bank)		C	-	10,000
8	To Sales A/c (Being goods sold for cash)			8,000	-	12	By Purchases A/c (Being goods purchased and amount paid by cheque)			-	20,000
10	To Cash A/c (Being cheque of Arun deposited into bank)	C		-	10,000	15	By Establishment expenses A/c (Being Establishment expenses paid through bank)			-	1,000
18	To Sales A/c (Being goods sold for cash)			7,000	-	20	By Bank A/c (Being cash deposited into bank)		C	-	10,000
20	To Cash A/c (Being cash deposited into bank)	C		-	10,000	24	By General Expenses A/c (Being general expenses paid)			500	-
27	To Commission A/c (Being Commission received by cheque)			-	6,000	29	By Rent A/c (Being rent paid)			2,000	-
						30	By Drawing A/c (Being cash withdrawn for personal use)			1,200	-
						31	By wages A/c (Being wages paid)			6,000	-
				42,500	31,000	31	By Balance c/d			9,800	10,000
				42,500	31,000					42,500	31,000
Aug. 1	To Balance b/d			9,800	10,000

In simple words: This cash book records all cash and bank transactions for July 2018, showing initial balances, various receipts like sales and commission, and payments for purchases, expenses, rent, and drawings. It concludes with the closing cash and bank balances.

🎯 Exam Tip: Pay close attention to contra entries (marked 'C') where cash is deposited into or withdrawn from the bank, affecting both cash and bank columns on opposite sides. Ensure all receipts are debited and payments are credited, and correctly balance the cash and bank columns.

Question 3. Record the following transactions in the Cash Book of M/s Kamal Traders. Balance for the month of July 2018: Cash in hand Rs. 2,000 and balance in Bank Current account Rs. 8,000.

July 2018	Amt (Rs.)
03	Cash Sales	2,300
05	Purchased goods and amount paid by cheque	6,000
08	Cash Sales	10,000
12	Paid General Expenses	700
15	Sold goods and amount received by Cheque and deposited into Bank	20,000
18	Purchased Motor Car paid by Cheque	15,000
20	Cheque received from Mrunal deposited into Bank	10,000
22	Cash Sales	7,000
25	Mrunal's cheque returned dishonoured
28	Paid Rent	2,000
29	Paid Telephone expenses by cheque	500
31	Cash is withdrawn from Bank for personal use	2,000

Prepare a two-column Cash Book.

Answer:

Solution:

In the books of M/s Kamal Traders

Dr. Cash Book						Cr.
Date	Receipts	R. No.	L.F.	Cash Rs.	Bank Rs.	Date	Payments	V. No.	L.F.	Cash Rs.	Bank Rs.
2018 July 1	To Balance b/d			2,000	8,000	2018 July 5	By Purchases A/c (Being goods purchased and amount paid by cheque)			-	6,000
3	To Sales A/c (Being goods sold for cash)			2,300	-	12	By General expense A/c (Being general expenses paid)			700	-
8	To Sales A/c (Being goods sold for cash)			10,000	-	18	By Motor car A/c (Being purchase of Motor car)			-	15,000
15	To Sales A/c (Being goods sold and amt. received by cheque)			-	20,000	25	By Mrunal A/c (Being dishonour of Mrunal's cheque)			-	10,000
20	To Mrunal A/c (Being cheque received from Mrunal)			-	10,000	28	By Rent A/c (Being rent paid)			2,000	-
22	To Sales A/c (Being goods sold for cash)			7,000	-	29	By Telephone charges A/c (Being Telephone expenses paid by cheque)			-	500
						31	By Drawings A/c (Being cash withdrawn for personal use)			2,000	-
				21,300	38,000	31	By Balance c/d			18,600	4,500
				21,300	38,000					21,300	38,000
Aug. 1	To Balance b/d			18,600	4,500

In simple words: This cash book details all cash and bank activities for M/s Kamal Traders in July 2018, starting with existing balances. It records various cash sales, bank deposits, purchases made by cheque, and expenses paid, concluding with the end-of-month cash and bank balances.

🎯 Exam Tip: Remember to record opening balances correctly on the debit side. Cash sales increase cash (debit cash column), and cheque receipts increase bank balance (debit bank column). Payments made by cheque decrease the bank balance (credit bank column), and cash payments decrease the cash balance (credit cash column). Carefully handle dishonoured cheques by crediting the bank column.

Question 4. Prepare Analytical Petty Cash Book from the following transactions in the books of Swarali General Stores, Kolhapur. The imprest amount is Rs. 1,500 received from the main cashier.

2018 January	Amt (Rs.)
01	Paid Cartage	50
02	Telephone Charges	40
02	Bus Fare	20
03	Postage	30
04	Refreshment to Employees	80
06	Courier Charges	30
08	Refreshment to Customers	50
10	Cartage	35
15	Taxi Fare to Manager	70
18	Purchased Stationery	65
20	Bus Fare	10
22	Xerox Charges	30
25	Internet Charges	35
27	Postage Stamps	200
29	Repair on Furniture	105
30	Cleaning Expenses	115
31	Miscellaneous Expenses	100

Answer:

Solution:

Analytical Petty Cash Book of Swarali General Stores

Receipts (Rs.)	C.B.F.	Date	Particulars	V. No.	Total Payments (Rs.)	Printing and Stationery A/c (Rs.)	Postage and Courier charges A/c (Rs.)	Travelling and Conveyance A/c (Rs.)	Cartage A/c (Rs.)	Sundry Exp. A/c (Rs.)	L.F.	Ledger Accounts (Rs.)
1,500		2018 Jan. 1	To Cash A/c		-	-	-	-	-	-		-
		1	By Cartage		50				50
		2	By Telephone charges		40					40
		2	By Bus fare		20			20
		3	By Postage		30		30
		4	By Refreshments		80					80
		6	By Courier charges		30		30
		8	By Refreshments		50					50
		10	By Cartage		35				35
		15	By Taxi fare		70			70
		18	By Stationery		65	65
		20	By Bus fare		10			10
		22	By Xerox charges		30					30
		25	By Internet charges		35					35
		27	By Postal stamps		200		200
		29	By Repairs on Furniture		105					105
		30	By Cleaning expenses		115					115
		31	By Miscellaneous expenses		100					100
			Total		1,065	130	260	100	85	490
		31	By Balance c/d		435
1,500					1,500
435		Feb. 1	To Balance b/d
1,065		1	To Cash A/c		-

In simple words: This Analytical Petty Cash Book for Swarali General Stores tracks small expenditures against an imprest amount of Rs. 1,500. It categorizes various petty expenses like cartage, telephone, travel, stationery, and miscellaneous costs, showing the total payments and the remaining cash balance.

🎯 Exam Tip: When preparing an Analytical Petty Cash Book, ensure the imprest amount is recorded as a receipt. Each payment must be correctly categorized into its respective analytical column. The closing balance should be calculated as (Receipts - Total Payments) and then the next period's reimbursement should bring the balance back to the imprest amount.

Question 5. From the following information prepare Columnar Petty Cash Book kept on imprest system in the books of Manisha Books Stall, Beed.

2018 April	Amt (Rs.)
01	Opening petty cash balance	200
02	Received a bearer cheque to make up the imprest amount	1,200
03	Gave a tip to peon	40
04	Purchased stationery	150
05	Paid Taxi Fare	35
06	Purchased Stamp pad	140
07	Paid Cartage	40
08	Paid Bus Fare	30
11	Paid to sweeper	50
13	Purchased a box of pencils	40
14	Paid Mobile charges	35
15	Gave it to Sohan on account	250
19	Paid for Refreshment to staff	150
20	Paid Railway Fare	30
21	Paid Carriage	65

Answer:

Solution:

Analytical Petty Cash Book of Manisha Books Stall, Beed

Receipts (Rs.)	C.B.F.	Date	Particulars	V. No.	Total Payments (Rs.)	Printing and Stationery A/c (Rs.)	Travelling & Conveyance A/c (Rs.)	Cartage A/c (Rs.)	Sundry Exp. A/c (Rs.)	L.F.	Ledger Accounts (Rs.)
200		2018 Apr. 1	To Balance b/d		-	-	-	-	-		-
1,200		1	To Cash A/c		-	-	-	-	-		-
		3	By Tip to peon		40				40
		4	By Stationery		150	150
		5	By Taxi fare		35		35
		6	By Stamp pad		140	140
		7	By Cartage		40			40
		8	By Bus fare		30		30
		11	By Paid to sweeper		50				50
		13	By Pencil box		40	40
		14	By Mobile charges		35		35
		15	By Sohan A/c		250				250
		19	By Refreshments		150				150
		20	By Railway fare		30		30
		21	By Carriage		65			65
			Total		1,055	330	95	105	275		250
		30	By Balance c/d		345
1,400					1,400
345		May 1	To Balance b/d
1,055		1	To Cash A/c		-

In simple words: This columnar petty cash book records the petty expenses of Manisha Books Stall for April, operating on an imprest system. It details the initial petty cash, received replenishment, and various small payments for tips, stationery, travel, and other sundry expenses, clearly categorizing them.

🎯 Exam Tip: For imprest system petty cash books, the amount reimbursed should always be equal to the total payments made in the previous period, bringing the balance back to the original imprest sum. Ensure correct categorization of expenses into relevant columns to facilitate easy ledger posting.

Question 6. Prepare proper Subsidiary Books and post them to the ledger from the following transactions for the month of February 2018.

2018 February	Amt (Rs.)
01	Goods sold to Virat	5,000
04	Purchased goods from Khushboo Traders	2,480
06	Sold goods to Shankar Traders	2,100
07	Virat returned goods	600
08	Returns goods to Khusboo Traders	280
10	Sold goods to Mahesh	3,300
14	Purchased from Kunti Traders	5,200
15	Furniture purchased from Arun	3,200
17	Bought goods from Kunti Traders	4,060
20	Return goods to Kunti Traders	200
22	Return goods from Mahesh	250
24	Purchased goods from Kirti less 10% T.D.	5,700
25	Sold goods to Shri Surya goods less 5% T.D.	6,600
26	Sold goods to Prakash Brothers	4,000
28	Return goods to Kirti less 10% T.D.	1,000
28	Prakash Brothers returned goods	500

Answer:

Solution:

In the books of

Purchase Book

Date	Name of Suppliers	Inward Invoice No.	L.F.	Amount (Rs.)
2018 Feb. 4	Khushboo Traders			2,480
14	Kunti Traders			5,200
17	Kunti Traders			4,060
24	Kirti (\(5,700 - 570\))			5,130
	Total			16,870

Sales Book

Date	Name of Customers	Outward Invoice No.	L.F.	Amount (Rs.)
2018 Feb. 1	Virat			5,000
6	Shankar Traders			2,100
10	Mahesh			3,300
25	Shri Surya (\(6,600 - 330\))			6,270
26	Prakash Brothers			4,000
	Total			20,670

Purchase Return Book

Date	Name of Suppliers	Debit Note No.	L.F.	Amount (Rs.)
2018 Feb. 8	Khushboo Traders			280
20	Kunti Traders			200
28	Kirti (\(1,000 - 100\))			900
	Total			1,380

Sales Return Book

Date	Name of Customers	Credit Note No.	L.F.	Amount (Rs.)
2018 Feb. 7	Virat			600
22	Mahesh			250
28	Prakash Brothers			500
	Total			1,350

In the books of

Purchase Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 28	To Sundries as per Purchase Book		16,870	2018 Feb. 28	By Balance c/d		16,870
			16,870				16,870
Mar. 1	To Balance b/d		16,870

Sales Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 28	To Balance c/d		20,670	2018 Feb. 28	By Sundries as per Sales Book		20,670
			20,670				20,670
				Mar. 1	By Balance b/d		20,670

Purchase Return Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 28	To Balance c/d		1,380	2018 Feb. 28	By Sundries as per Purchase Return Book		1,380
			1,380				1,380
				Mar. 1	By Balance b/d		1,380

Sales Return Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 28	To Sundries as per Sales Return Book		1,350	2018 Feb. 28	By Balance c/d		1,350
			1,350				1,350
Mar. 1	To Balance b/d		1,350

Khushboo Traders Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 8	To Purchase Return A/c		280	2018 Feb. 4	By Purchase A/c		2,480
28	To Balance c/d		2,200
			2,480				2,480
Mar. 1	By Balance b/d		2,200

Kunti Traders Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 20	To Purchase Return A/c		200	2018 Feb. 14	By Purchase A/c		5,200
28	To Balance c/d		9,060	17	By Purchase A/c		4,060
			9,260				9,260
Mar. 1	By Balance b/d		9,060

Kirti Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 28	To Purchase Return A/c		900	2018 Feb. 24	By Purchase A/c		5,130
28	To Balance c/d		4,230
			5,130				5,130
Mar. 1	By Balance b/d		4,230

Virat Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 1	To Sales A/c		5,000	2018 Feb. 7	By Sales Return A/c		600
				28	By Balance c/d		4,400
			5,000				5,000
Mar. 1	To Balance b/d		4,400

Shankar Traders Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 6	To Sales A/c		2,100	2018 Feb. 28	By Balance c/d		2,100
			2,100				2,100
Mar. 1	To Balance b/d		2,100

Mahesh Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 10	To Sales A/c		3,300	2018 Feb. 22	By Sales Return A/c		250
				28	By Balance c/d		3,050
			3,300				3,300
Mar. 1	To Balance b/d		3,050

Shri Surya Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 25	To Sales A/c		6,270	2018 Feb. 28	By Balance c/d		6,270
			6,270				6,270
Mar. 1	To Balance b/d		6,270

Prakash Brothers Account

Dr.				Cr.
Date	Particulars	J.F.	Amount (Rs.)	Date	Particulars	J.F.	Amount (Rs.)
2018 Feb. 26	To Sales A/c		4,000	2018 Feb. 28	By Sales Return A/c		500
				28	By Balance c/d		3,500
			4,000				4,000
Mar. 1	To Balance b/d		3,500

In simple words: This solution provides subsidiary books (Purchase, Sales, Purchase Return, Sales Return) and ledger accounts for all credit purchases, credit sales, and corresponding returns during February 2018, as well as posting them to individual customer and supplier accounts. Trade discounts are accounted for in the net values. Note that the furniture purchase on 15th Feb. will be recorded in the Journal Proper as it's an asset purchase, not goods.

🎯 Exam Tip: Remember to record only credit transactions related to goods in the Purchase Book and Sales Book. Asset purchases on credit (like furniture) or cash transactions go to the Journal Proper or Cash Book, respectively. Always adjust for trade discounts before recording the net amount.

Question 7. Enter the following transactions in the books of Vijay in Purchase Book, Sales Book, Purchase Returns Book and Sales Returns Book and Journal Proper for the month of August 2018.

2018 August

(i) 01 Purchased goods from Vikas Stores Rs. 18,000 at 5% Trade Discount
(ii) 02 Sold goods of Rs. 9,000 to Prabhakar Traders
(iii) 05 Veena sold goods of Rs. 16,000 to us at 5% Trade Discount as per our order dated 28th July, 2018.
(iv) 08 Sent a Debit Note to Vikas Stores Rs. 1,600 (Gross) for goods returned.
(v) 10 Sold goods of Rs. 12,000 on credit to Shamal & Sons at 6% Trade Discount.
(vi) 18 Received Credit Note from Veena Rs. 900 (Gross) for goods returned.
(vii) 22 Sent Credit Note to Prabhakar Traders for Rs. 1,500 for goods returned. Received Dedit note from Shamal & Sons for Rs. 1,200 (Net) for goods returned.
(viii) 23 Purchased goods of Rs. 16,600 from Priya Stores and paid for Carriage Rs. 150.
(ix) 25 Purchased goods from Sadhana Stores Rs. 12,000 and sold the same to Aradhana Stores at a profit of 20% on cost.
(x) 28 Aradhana Stores returned goods of Rs. 2,400 as they were defective and the same were returned to Sadhana Stores.
(xi) 31 Purchased Furniture for office use Rs. 30,000 from Art Furniture Works on credit.
Answer:

Solution:

In the books of Vijay

Purchase Book

Date	Name of Suppliers	Inward Invoice No.	L.F.	Amount (Rs.)
2018 Aug. 1	Vikas Stores (\(18,000 - 900\))			17,100
5	Veena (\(16,000 - 800\))			15,200
23	Priya Stores			16,600
25	Sadhana Stores			12,000
	Total			60,900

Sales Book

Date	Name of Customers	Outward Invoice No.	L.F.	Amount (Rs.)
2018 Aug. 2	Prabhakar Traders			9,000
10	Shamal & Sons (\(12,000 - 720\))			11,280
25	Aradhna Stores (\(12,000 + (12,000 \times 20\%)\))			14,400
	Total			34,680

Purchase Return Book

Date	Name of Suppliers	Debit Note No.	L.F.	Amount (Rs.)
2018 Aug. 8	Vikas Stores (\(1,600 - 80\))			1,520
18	Veena (\(900 - 45\))			855
28	Sadhana Stores			2,000
	Total			4,375

Sales Return Book

Date	Name of Customers	Credit Note No.	L.F.	Amount (Rs.)
2018 Aug. 22	Prabhakar Traders			1,500
22	Shamal & Sons			1,200
28	Aradhana Stores			2,400
	Total			5,100

Journal Proper

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2018 Aug. 31	Furniture A/c	Dr.	30,000
	To M/s. Art Furniture Works A/c			30,000
	(Being furniture purchased on credit)
	Total		30,000	30,000

In simple words: This solution systematically records all credit purchases, sales, and their respective returns for Vijay in August 2018 using specialized subsidiary books. Trade discounts are applied to the goods transactions. The purchase of furniture on credit, being an asset and not goods, is correctly recorded in the Journal Proper.

🎯 Exam Tip: Distinguish between goods transactions (which go into purchase/sales books) and asset transactions (which go into Journal Proper if on credit, or Cash Book if cash). Carefully calculate and apply trade discounts before entering amounts in the subsidiary books. Ensure corresponding debit/credit notes for returns are processed correctly.

 

Question 8. Mr. Akash gives you the following information and asks you to prepare Purchase Book, Sales Book, Purchase Returns Book and Sales Return Book for the month of January 2018.2018 January
01 Purchased goods on credit from Dhanal Traders for Rs. 15,000 and sold the same to Kunal Traders at a profit of 25% on cost.
05 Placed an order with Sunetra for goods of Rs. 10,000 less 5% Trade discount.
08 Purchased goods of Rs. 20,000 at 10% Trade Discount from Saurabha Traders.
13 Sold goods to Vinayak Stores Rs. 8,000 at 5% Trade Discount.
15 Vinayak Stores returned goods to us Rs. 200.
18 Sunetra executed our order placed on 5th Jan. 2018.
20 Sold goods to Vishnu Traders Rs. 21,000 less 5% Trade Discount.
22 Returned goods to Sunetra Rs. 1,000 (Gross).
28 Kunal Traders returned goods to us Rs. 500
30 Returned goods to Sourabh Traders Rs. 1,500.
Answer:
Solution:
In the books of Mr. Akash

Purchase Book

Date	Name of Suppliers	Inward Invoice No.	L.F.	Amount (Rs.)
2018 Jan. 1	Dhanal Traders			15,000
Jan. 8	Saurabh Traders (20,000 - 2,000)			18,000
Jan. 18	Sunetra (10,000 - 500)			9,500
Total				42,500

Sales Book

Date	Name of Customers	Outward Invoice No.	L.F.	Amount (Rs.)
2018 Jan. 1	Kunal Traders (15,000 + 3,750)			18,750
Jan. 13	Vinayak Stores (8,000 - 400)			7,600
Jan. 20	Vishnu Traders (21,000 - 1,050)			19,950
Total				46,300

Purchase Return Book

Date	Name of Suppliers	Debit Note No.	L.F.	Amount (Rs.)
2018 Jan. 22	Sunetra (1,000-50)			950
Jan. 30	Saurabh Traders (1500 - 150)			1,350
Total				2,300

Sales Return Book

Date	Name of Customers	Credit Note No.	L.F.	Amount (Rs.)
2018 Jan. 15	Vinayak Stores (200-10)			190
Jan. 28	Kunal Traders			500
Total				690

In simple words: This question demonstrates how to record various purchase and sales transactions, including returns and trade discounts, into their respective subsidiary books (Purchase Book, Sales Book, Purchase Returns Book, Sales Return Book) to maintain a detailed record of credit transactions.

🎯 Exam Tip: Pay close attention to trade discounts, as they are deducted from the gross amount but not recorded as a separate entry in the books. Ensure returns are correctly posted to either purchase returns or sales returns books.

 

Question 9. Enter the following transactions in the Subsidiary Book of Kamal Traders.2018 April
01 Bought from Suhas goods of Rs. 12,000 as per his Invoice No. 41.
04 Purchased from Virat goods of Rs. 11,870 less 10% Trade Discount vide Bill No. 12.
07 Bought from Kuldip goods of Rs. 11,000 less 25% Trade Discount vide Bill No. 12.
08 Bought from M/s. Art Furniture Works, Furniture for Rs. 13,000 vide Invoice No. 84.
12 Sold to Dhiraj goods of Rs. 11,500 vide Sales Invoice No. 27
13 Sold to Raja goods of Rs. 12,780 less 5% Trade Discount, vide invoice No. 88
21 Sold to Suresh goods of Rs. 8,000 less 20% Trade Discount
23 Dhiraj returned goods of Rs. 500 vide our Credit note No. 14
26 Suresh returned goods of Rs. 150 (gross) vide our Credit Note No. 115
28 Returned to Suhas goods Rs. 1,200 vide our Debit Note No. 09
30 Returned to Virat goods of Rs. 1,300 (Gross) vide our Debit Note No. 10.
30 Returned to Kuldip goods of Rs. 1,100 (Gross) vide our Debit Note No. 11.
Answer:
Solution:
In the books of Kamal Traders

Purchase Book

Date	Name of Suppliers	Inward Invoice No.	L.F.	Amount (Rs.)
2018 Apr. 1	Suhas	41		12,000
Apr. 4	Virat (11,870 - 1,187)	12		10,683
Apr. 7	Kuldip (11,000 - 2,750)	12		8,250
Total				30,933

Sales Book

Date	Name of Customers	Outward Invoice No.	L.F.	Amount (Rs.)
2018 Apr. 12	Dhiraj	27		11,500
Apr. 13	Raja (12,780 - 639)	88		12,141
Apr. 21	Suresh (8,000 - 1,600)	-		6,400
Total				30,041

Purchase Return Book

Date	Name of Suppliers	Debit Note No.	L.F.	Amount (Rs.)
2018 Apr. 28	Suhas	09		1,200
Apr. 30	Virat (1,300 - 130)	10		1,170
Apr. 30	Kuldip (1,100 - 275)	11		825
Total				3,195

Sales Return Book

Date	Name of Customers	Credit Note No.	L.F.	Amount (Rs.)
2018 Apr. 23	Dhiraj	14		500
Apr. 26	Suresh (150 -30)	115		120
Total				620

Journal Proper

Date	Particulars	L.F.	Debit. (Rs.)	Credit. (Rs.)
2018 Apr. 8	Furniture A/c To M/s. Art Furniture Works A/c (Being furniture purchased on credit vide invoice no. 84)	Dr.	13,000
				13,000
Total			13,000	13,000

In simple words: This solution demonstrates the proper recording of various credit purchases, sales, and their returns, along with the purchase of an asset on credit, into the appropriate subsidiary books and Journal Proper. Trade discounts are calculated but not separately recorded as an entry.

🎯 Exam Tip: Remember to differentiate between goods purchased/sold on credit (recorded in Purchase/Sales Book) and assets purchased/sold on credit (recorded in Journal Proper). Always deduct trade discounts to arrive at the net amount for entry.

 

Question 10. Enter the following transactions in the Subsidiary Books of Navyug Traders:2018 March
01 Sold to Bharat Patil goods Rs. 10,000 at 10% Trade discount.
04 Purchased from Naresh goods of Rs. 11,000 less 10% Trade discount.
06 Purchased Furniture from M/s. Sham Furniture Works, of Rs. 15,000 for office use.
07 Bharat Patil returned 20% of the goods bought by him on 1st March above and we gave him fresh goods in exchange.
08 Sold to Sundar goods of Rs. 13,000 less 15% Trade Discount.
10 Sold to Sumit Computer for Rs. 23,800 with a book value of Rs. 24,000.
12 Placed an order with Sajan for goods of Rs. 12,000.
17 Purchased from Naresh goods of Rs. 14,000 and sold them to Kamesh for Rs. 16,000.
19 Kamesh returned us goods of Rs. 1,600 and immediately returned the same to Naresh.
23 Sold to Rakesh for Rs. 4,500 old Furniture with a book value of Rs. 4,800.
26 Returned to M/s. Sham Furniture Works, office Furniture of Rs. 4,500.
28 Sajan executed our order dated 12th March, 2018.
Answer:
Solution:
In the books of Navyug Traders

Purchase Book

Date	Name of Suppliers	Inward Invoice No.	L.F.	Amount (Rs.)
2018 Mar. 4	Naresh (11,000-1,100)			9,900
Mar. 17	Naresh			14,000
Mar. 28	Sajan			12,000
Total				35,900

Sales Book

Date	Name of Customers	Outward Invoice No.	L.F.	Amount (Rs.)
2018 Mar. 1	Bharat Patil (10,000-1,000)			9,000
Mar. 8	Sundar (13,000 - 1,950)			11,050
Mar. 17	Kamlesh			16,000
Total				36,050

Purchase Return Book

Date	Name of Suppliers	Debit Note No.	L.F.	Amount (Rs.)
2018 Mar. 19	Naresh			1,400
Total				1,400

Sales Return Book

Date	Name of Customers	Credit Note No.	L.F.	Amount (Rs.)
2018 Mar. 19	Kamlesh			1,600
Total				1,600

Journal Proper

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
2018 Mar. 6	Furniture A/c To M/s. Sham Furniture works A/c (Being furniture purchased on credit)	Dr.	15,000
				15,000
Mar. 10	Sumit A/c Loss on sale of Computer A/c To Computer A/c (Being computer sold on credit)	Dr. Dr.	23,800 200
				24,000
Mar. 23	Rakesh A/c Loss on Sale of Furniture A/c To Furniture A/c (Being furniture sold on credit)	Dr. Dr.	4,500 300
				4,800
Mar. 26	M/s. Sham Furniture works A/c To Furniture A/c (Being office furniture returned)	Dr.	4,500
				4,500
Total			48,300	48,300

In simple words: This question covers a wide range of credit transactions, including goods and asset purchases/sales, and their corresponding returns, requiring entries across various subsidiary books and the Journal Proper. Orders placed are not recorded until goods are actually received or dispatched.

🎯 Exam Tip: Distinguish between goods (for resale) and assets (for office use) as they go into different books when purchased or sold on credit. Unexecuted orders are not recorded. Carefully calculate trade discounts and losses on sales of assets.

Class 11 Commerce BK Textbook Solutions Digest

• 11th Bk Chapter 1 Practical Problems
• 11th Bk Chapter 2 Practical Problems
• 11th Bk Chapter 3 Practical Problems
• 11th Bk Chapter 4 Practical Problems
• 11th Bk Chapter 5 Practical Problems
• 11th Bk Chapter 6 Practical Problems
• 11th Bk Chapter 7 Practical Problems
• 11th Bk Chapter 8 Practical Problems
• 11th Bk Chapter 9 Practical Problems
• 11th Bk Chapter 10 Practical Problems

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