Question
Elucidate the following statement:
Cash Book is both Journal and Ledger'.
Cash Book is both Journal and Ledger'.
✓
Answer
It is a journal since the transactions are recorded in it for the first time from the source documents and from there these are posted to the respective accounts in the ledger. The Cash book is also a ledger in the sense that it serves the purpose of a Cash account also. When a Cash book is prepared, no separate Cash account is opened in the ledger. As such, the Cash book is a journal as well as a ledger and hence it may be called “journalised ledger”.
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Complete the following Accounting Equation by filling the missing amounts:
Original Cost of a Machinery ₹ 5,00,000; Salvage value ₹ 20,000; Expected useful life 10 years. What will be the amount of depreciation for the fourth year according to original cost method? Also specify the rate of depreciation.
Prepare an Accounting Equation on the basis of the following transaction:
- Started business with cash ₹ 70,000.
- Credit purchase of goods ₹ 18,000.
- Payment made to creditors in full settlement ₹ 17,500.
- Purchase of machinery for cash ₹ 20,000.
- Depreciation on machinery ₹ 2,000.
Journalise the following transactions:
- Sold goods to Brijesh of the list price of ₹ 10,000 at trade discount of 5%. Received full payment in cash.
- Goods given away as charity ₹ 1,000.
- Charge interest on capital of ₹ 5,00,000 @ 7% p.a.
- Outstanding wages ₹ 3,000.
- ₹ 5,000 due from Sunny are now bad debts.
- ₹ 50,000 cash sales (of goods costing ₹ 40,000).
Enter the following transactions in a Double Column Cash Book and Journal Proper and post them into Ledger∶
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May 1
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Balance of Cash in Hand ₹ 12,400; Bank Overdraft ₹ 36,000
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May 3
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Direct deposit by Mr. Ganesh in our bank account ₹ 10,000. Discount allowed ₹ 200
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May 5
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Issued a cheque of ₹ 7,700 to Mr. Suresh in full settlement of his account of ₹ 8,000
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May 6
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Received a cheque from X for ₹ 12,000. Discount allowed ₹ 500. This cheque was deposited into bank on 7th May
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May 8
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Received Cash ₹ 22,000 and cheque of ₹ 8,000 for cash sale
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May 12
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Cash sale ₹ 70,000 of which ₹ 55,000 banked
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May 15
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Cheque received on 8th May endorsed to Mr. Sunil. Discount received ₹ 150
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May 20
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Discounted a B/R of ₹ 10,000 at 1% through bank
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May 24
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Cheque received from X dishonoured, Bank debits ₹ 20 in respect of bank charges
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May 25
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Purchased goods for ₹ 50,000 at a trade discount of 10%. Payment was made in cash
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May 26
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Withdrew from bank ₹ 10,000 for office use and ₹ 2,000 for personal use
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May 31
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Interest debited by Bank ₹ 4,500
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Journalise the following transactions:
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2017
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₹
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Jan. 1
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Paid into bank for opening a Current Account
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10,000
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Jan. 3
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Goods sold for ₹ 50,000 and the amount was deposited into the bank
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|
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Jan. 7
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Amount withdrawn from bank
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20,000
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Jan. 10
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Goods sold for Cash
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15,000
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Jan. 12
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Amount deposited into bank
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12,000
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Jan. 14
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Goods purchased and payment made by cheque.
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25,000
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Explain any three points highlighting the utility of accounting standards.
How is Trade Discount recorded in the books of account?
What is an Account?