CBSE Class 11 Accountancy Project Work Worksheet

Introduction: Mr. Amit Kapoor started his business under the name of Amit Groups & Sons, at Andheri Road, Mumbai, on April 1, 2010, to deal in stationery items. He introduced Rs. 5,00,000 as capital out of which Rs. 2,00,000 was in cash and balance by cheque. Enclosed herewith are the original papers relating to his business transactions for the month of April, 2010.

Transaction 1
Amit deposited Rs. 3 lacs in his Axis Bank account.

Question 1. Record the opening entry and Transaction 1 in the Journal of M/s Amit Groups & Sons.
Answer:
Journal Entries:
2010, April 1:
Cash A/c ... Dr. Rs. 2,00,000
Bank A/c ... Dr. Rs. 3,00,000
    To Capital A/c ... Rs. 5,00,000
(Being capital introduced in cash and through bank)

2010, April 1:
Bank A/c ... Dr. Rs. 3,00,000
    To Cash A/c ... Rs. 3,00,000
(Being cash deposited into bank)
In simple words: Capital brought in by the owner is credited to Capital account, and cash deposited into the bank increases bank balance and decreases cash.

Exam Tip: Ensure compound journal entries balance total debits with total credits.

Transaction 2
Oberoi & Co. Furniture, Mount Road, Mumbai
Bill No. 750, 2nd April, 2010
Purchased from Oberoi & Co.: 10 Chairs @ Rs. 300 = Rs. 3,000; 15 Shelves @ Rs. 1,000 = Rs. 15,000; 10 Tables @ Rs. 500 = Rs. 5,000; 5 Show cases @ Rs. 5,000 = Rs. 25,000. Total = Rs. 48,000. Less: 10% Trade Discount = Rs. 4,800. Net Amount = Rs. 43,200.

Question 2. Record Transaction 2 in the Journal.
Answer:
Journal Entry:
2010, April 2:
Furniture A/c ... Dr. Rs. 43,200
    To Oberoi & Co. A/c ... Rs. 43,200
(Being furniture purchased on credit from Oberoi & Co. after 10% trade discount)
In simple words: Trade discount is deducted directly from the list price and is not recorded separately in the books of accounts.

Exam Tip: Always record net purchase value after deducting trade discount.

Transaction 3
Stationery Mart, Navi Mumbai
Cash Memo (Original), 3rd April, 2010
100 Packets of Pencil @ Rs. 10 each = Rs. 1,000
100 Packets of Erasers @ Rs. 20 each = Rs. 2,000
50 Packets of Registers @ Rs. 240 each = Rs. 12,000
100 Packets of Stickers @ Rs. 10 each = Rs. 1,000
Total Amount = Rs. 16,000. Received by cheque No. 12345 on Axis Bank, Chennai.

Question 3. Record Transaction 3 in the Journal.
Answer:
Journal Entry:
2010, April 3:
Purchases A/c ... Dr. Rs. 16,000
    To Bank A/c ... Rs. 16,000
(Being goods purchased for cash/cheque from Stationery Mart)
In simple words: Goods purchased are debited to Purchases account, and payment made through bank is credited to Bank account.

Exam Tip: Cash memos indicate immediate cash or bank settlement.

Transaction 4
R. Kumar & Bros., Dealers in Office Equipment, Central Mumbai
Cash Memo (Original), 5th April, 2010
One Computer & Printer = Rs. 40,000
One Camera = Rs. 15,000
Total Amount = Rs. 55,000. Received in full vide Cheque No. 12346 on Axis Bank, Mumbai.

Question 4. Record Transaction 4 in the Journal.
Answer:
Journal Entry:
2010, April 5:
Office Equipment A/c ... Dr. Rs. 55,000
    To Bank A/c ... Rs. 55,000
(Being computer, printer, and camera purchased for office use and paid by cheque)
In simple words: Purchase of office assets like computers and cameras is debited to Office Equipment account, not Purchases account.

Exam Tip: Distinguish carefully between goods (purchases) and assets (office equipment).

Transaction 5
Naveen Trading Co., 134, Abid Road, Hyderabad
Invoice No. 231, 5th April, 2010
50 file covers @ Rs. 10 per piece = Rs. 500
200 packets of stickers @ Rs. 10 each = Rs. 2,000
Total = Rs. 2,500. Less: 10% Discount = Rs. 250. Net Amt = Rs. 2,250.

Question 5. Record Transaction 5 in the Journal.
Answer:
Journal Entry:
2010, April 5:
Purchases A/c ... Dr. Rs. 2,250
    To Naveen Trading Co. A/c ... Rs. 2,250
(Being goods purchased on credit from Naveen Trading Co. after trade discount)
In simple words: Credit purchase of goods is recorded at net invoice price.

Exam Tip: Check whether the transaction is cash or credit when party name is given.

Transaction 6
Amit Group & Sons, Andheri Road, Mumbai
Cash Memo, 6th April, 2010
300 Pieces of chart paper @ Rs. 5/piece = Rs. 1,500
Less: Cash discount = Rs. 100. Net = Rs. 1,400.
Received vide Cheque No. 481325 on SBI.

Question 6. Record Transaction 6 in the Journal.
Answer:
Journal Entry:
2010, April 6:
Bank A/c ... Dr. Rs. 1,400
Discount Allowed A/c ... Dr. Rs. 100
    To Sales A/c ... Rs. 1,500
(Being goods sold and cash discount allowed against cheque payment)
In simple words: Sales are recorded at gross value, discount allowed is a loss debited, and bank receives the net amount.

Exam Tip: Cash discount is explicitly recorded in the journal, unlike trade discount.

Transaction 7
On 7th April, 2010, Name plates were purchased & engraving charges Rs. 1,250 paid in cash.

Question 7. Record Transaction 7 in the Journal.
Answer:
Journal Entry:
2010, April 7:
Office Expenses A/c (or Fixtures/Name Plates A/c) ... Dr. Rs. 1,250
    To Cash A/c ... Rs. 1,250
(Being name plates purchased and engraving charges paid in cash)
In simple words: Expenses incurred on business fittings or miscellaneous office expenses are debited directly to expense or asset account.

Exam Tip: Direct expenses incurred on acquiring items form part of the asset cost or miscellaneous expenses.

Transaction 8
On 8th April, 2010, Cash paid Rs. 2,500 for advertisement in newspaper.

Question 8. Record Transaction 8 in the Journal.
Answer:
Journal Entry:
2010, April 8:
Advertisement A/c ... Dr. Rs. 2,500
    To Cash A/c ... Rs. 2,500
(Being cash paid for newspaper advertisement)
In simple words: Advertisement is a nominal expense, hence debited.

Exam Tip: All operating expenses are debited when incurred.

Transaction 9
Amit Group, Andheri Road, Mumbai
M/s Narayan & Sons, Chennai, Invoice No. 1, Order No. 48, 9th April, 2010
400 Pieces of charts @ Rs. 5/piece = Rs. 2,000
200 Packets of pens @ Rs. 20/packet = Rs. 4,000
50 Packets of scissors @ Rs. 30/packet = Rs. 1,500
Total Amt. = Rs. 7,500.

Question 9. Record Transaction 9 in the Journal.
Answer:
Journal Entry:
2010, April 9:
M/s Narayan & Sons A/c ... Dr. Rs. 7,500
    To Sales A/c ... Rs. 7,500
(Being goods sold on credit to M/s Narayan & Sons)
In simple words: Credit sale is debited to the customer's account and credited to Sales account.

Exam Tip: Sales invoices issued by us represent credit sales.

Transaction 10
Oberoi & Co., Mount Road, Mumbai, Receipt (Original), No. 1234, 10th April, 2010
Received with thanks from M/s Amit Group and Sons, Chennai, sum of Rs. 5,000 only, as part payment of Bill No. 750 dated April 2, 2010 through cheque no. 12347 on Axis Bank Limited, Mumbai.

Question 10. Record Transaction 10 in the Journal.
Answer:
Journal Entry:
2010, April 10:
Oberoi & Co. A/c ... Dr. Rs. 5,000
    To Bank A/c ... Rs. 5,000
(Being payment made to Oberoi & Co. by cheque as part payment)
In simple words: Payment to a creditor reduces liability and decreases bank balance.

Exam Tip: Debit the creditor's personal account when making part payments.

Transaction 11
Amit Group & Sons, Sayaji Road, Chennai
M/s Sawan Brothers, Mumbai, Invoice No. 2, Series No. 72, 11th April, 2010
50 books of English @ Rs. 100 each = Rs. 5,000
Less: Trade Discount = Rs. 500
Net Amt. = Rs. 4,500. Goods sent by Transport.

Question 11. Record Transaction 11 in the Journal.
Answer:
Journal Entry:
2010, April 11:
M/s Sawan Brothers A/c ... Dr. Rs. 4,500
    To Sales A/c ... Rs. 4,500
(Being goods sold on credit to M/s Sawan Brothers after trade discount)
In simple words: Credit sale is recorded at invoice value after trade discount.

Exam Tip: Ensure trade discount is deducted before recording sales value.

Transaction 12
Received Rs. 5,000 as part payment against Bill no. 1, dated April 9, 2010, vide cheque no. 48257 on The Canara Bank, Mumbai.

Question 12. Record Transaction 12 in the Journal.
Answer:
Journal Entry:
2010, April 11 (approx):
Bank A/c ... Dr. Rs. 5,000
    To M/s Narayan & Sons A/c ... Rs. 5,000
(Being cheque received as part payment against Bill No. 1)
In simple words: Receipt from a debtor increases bank balance and reduces debtor's balance.

Exam Tip: Credit the customer's account when receiving payment.

Transaction 13
Naveen Trading Co., 134, Abid Road, Hyderabad
M/s Amit Group & Sons, Invoice no. 287, Andheri Road, Mumbai, 13th April, 2010
Order No. 25
80 books of Hindi @ Rs. 200 each = Rs. 16,000.
Rupees Sixteen Thousand only.

Question 13. Record Transaction 13 in the Journal.
Answer:
Journal Entry:
2010, April 13:
Purchases A/c ... Dr. Rs. 16,000
    To Naveen Trading Co. A/c ... Rs. 16,000
(Being books purchased on credit from Naveen Trading Co.)
In simple words: Purchase of goods on credit increases purchases and accounts payable.

Exam Tip: Record credit purchases at full invoice value.

Transaction 14
On April 14, 2010
Carriage Paid Rs. 150 for unloading goods at shed and transportation to godown and payment made in cash.

Question 14. Record Transaction 14 in the Journal.
Answer:
Journal Entry:
2010, April 14:
Carriage Inwards A/c ... Dr. Rs. 150
    To Cash A/c ... Rs. 150
(Being carriage paid on purchased goods in cash)
In simple words: Carriage paid on goods purchased is a direct expense, debited to Carriage Inwards account.

Exam Tip: Carriage on purchases is a direct expense affecting trading account.

Transaction 15
Rama & Sons, Santa Cruz, Mumbai
Cash Memo (Duplicate), 15th April, 2010
50 sets of Gel Pens @ Rs. 20 each = Rs. 1,000.
Received Cash.

Question 15. Record Transaction 15 in the Journal.
Answer:
Journal Entry:
2010, April 15:
Cash A/c ... Dr. Rs. 1,000
    To Sales A/c ... Rs. 1,000
(Being cash sales made to Rama & Sons)
In simple words: Cash sales increase cash balance and sales revenue.

Exam Tip: Cash memos indicate cash sales.

Transaction 16
Bills of exchange, Mumbai, 16th April, 2010
One month after date pay M/s Amit Group & Sons or order the sum of Rs. 2,000 only, value received.
To M/s Sawan Brothers, Mumbai.
In addition to the above, allowed M/s Sawan Brothers a discount of Rs. 100.

Question 16. Record Transaction 16 in the Journal.
Answer:
Journal Entry:
2010, April 16:
Bills Receivable A/c ... Dr. Rs. 2,000
Discount Allowed A/c ... Dr. Rs. 100
    To M/s Sawan Brothers A/c ... Rs. 2,100
(Being bill accepted by Sawan Brothers for part payment and discount allowed)
In simple words: Acceptance received is a Bills Receivable, and discount allowed is debited against the customer's account balance.

Exam Tip: Bills accepted by debtors are debited to Bills Receivable.

Transaction 17
On April 24, 2010
Mr. Amit withdrew Rs. 2,000 from bank account for personal use vide cheque no. 12348.

Question 17. Record Transaction 17 in the Journal.
Answer:
Journal Entry:
2010, April 24:
Drawings A/c ... Dr. Rs. 2,000
    To Bank A/c ... Rs. 2,000
(Being cash withdrawn by owner for personal use by cheque)
In simple words: Drawings reduce capital and decrease bank balance.

Exam Tip: Withdrawals for personal use are always debited to Drawings.

Transaction 18
On April 25, 2010
Premium paid Rs. 1,000 for fire insurance for the year by cheque no. 12349.

Question 18. Record Transaction 18 in the Journal.
Answer:
Journal Entry:
2010, April 25:
Insurance Premium A/c ... Dr. Rs. 1,000
    To Bank A/c ... Rs. 1,000
(Being fire insurance premium paid by cheque)
In simple words: Insurance is an operating expense, hence debited.

Exam Tip: Premium payments are nominal expenses.

Transaction 19
Promissory note, Mumbai, 25th April, 2010
Rs. 16,000
Two months after date, I/We promise to pay M/s Naveen Trading Co. or order sum of Rs. 16,000 only for the value received.
For Amit Group & Sons, Amit.

Question 19. Record Transaction 19 in the Journal.
Answer:
Journal Entry:
2010, April 25:
Naveen Trading Co. A/c ... Dr. Rs. 16,000
    To Bills Payable A/c ... Rs. 16,000
(Being promissory note accepted in favour of Naveen Trading Co.)
In simple words: Issuing a promissory note creates a Bills Payable liability and reduces creditors.

Exam Tip: Acceptance given to creditors is credited to Bills Payable.

Transaction 20
On 30th April, 2010
Amount paid by cheque no. 12350, Rs. 2,500 for printing of receipt books, cash memos and letterheads.

Question 20. Record Transaction 20 in the Journal.
Answer:
Journal Entry:
2010, April 30:
Printing and Stationery A/c ... Dr. Rs. 2,500
    To Bank A/c ... Rs. 2,500
(Being amount paid by cheque for printing stationery)
In simple words: Printing expenses are nominal expenses debited to Printing & Stationery account.

Exam Tip: Printing and stationery is an administrative expense.

Transaction 21
On 30th April, 2010
Salary of Rs. 5,000 paid to salesman for the month of April, by cheque numbered 12351.

Question 21. Record Transaction 21 in the Journal.
Answer:
Journal Entry:
2010, April 30:
Salary A/c ... Dr. Rs. 5,000
    To Bank A/c ... Rs. 5,000
(Being monthly salary paid to salesman by cheque)
In simple words: Salaries paid are operating expenses debited to Salary account.

Exam Tip: All staff salaries are indirect operating expenses.

Event as on 30th April, 2010
Inventory was counted and valued Rs. 50,000.

Question 22. Prepare vouchers for each financial transaction and then enter the transactions in the journal, post them into ledger, balance the accounts, draw up a trial balance and prepare the final accounts.
Answer:
Closing Stock Entry (30th April, 2010):
Closing Stock A/c ... Dr. Rs. 50,000
    To Trading A/c ... Rs. 50,000
(Being closing stock valued at end of accounting period)

Summary of Project Work Steps:
1. Vouchers: Prepare source document based debit/credit vouchers for transactions 1 through 21.
2. Journal: Record all entries chronologically in the Journal.
3. Ledger: Post all journal entries into respective individual ledger accounts (Cash, Bank, Capital, Purchases, Sales, Furniture, Office Equipment, Creditors, Debtors, Expenses, etc.).
4. Trial Balance: Extract debit and credit balances from all ledger accounts to test arithmetical accuracy.
5. Final Accounts: Prepare Trading Account, Profit and Loss Account for the year ended April 30, 2010, and Balance Sheet as on that date.
In simple words: Complete accounting cycle involves vouchers, journalizing, ledger posting, trial balance preparation, and final accounts.

Exam Tip: Ensure trial balance totals match perfectly before preparing final accounts.