Depreciation, Provisions and Reserves — Account STD 11 Commerce — Question

Journalise the following transactions:

2017		₹
Dec. 01	Hema started business with cash	1,00,000
Dec. 02	Open a bank account with SBI	30,000
Dec. 04	Purchased goods from Ashu	20,000
Dec.06	Sold goods to Rahul for cash	15,000
Dec.10	Bought goods from Tara for cash	40,000
Dec.13	Sold goods to Suman	20,000
Dec.16	Received cheque from Suman	19,500
	Discount allowed	500
Dec.20	Cheque given to Ashu on account	10,000
Dec.22	Rent paid by cheque	2,000
Dec.23	Deposited into bank	16,000
Dec.25	Machine purchased from Parigya	10,000
Dec.26	Trade expenses	2,000
Dec.28	Cheque issued to Parigya	10,000
Dec.29	Paid telephone expenses by cheque	1,200
Dec.31	Paid salary	4,500

Following balances appeared in the books of Ashok, Delhi on 1st April, 2019:
Assets: Cash ₹ 50,000; Stock ₹ 30,000; Debtors−Ram ₹ 50,000; Machinery ₹ 60,000.
Liabilities: Creditor−Rajesh ₹ 30,000.
The following transactions took place in April, 2019:

2019		₹
April 4	Sold goods for cash	7,000
April 6	Goods returned by Ram, Delhi	1,000
April 10	Purchased goods from Rajesh, Jaipur (Rajasthan) of list price ₹ 10,000 for	9,000
April 15	Bought goods of list price of ₹ 15,000 from Rakesh, Kolkata less 10% trade discount and 5% cash discount and paid 40% of amount immediately.
April 20	Paid to Rajesh in full settlement of his account*	38,600
April 25	Paid for the life insurance premium of the proprietor*	500
April 30	Received commission (Including CGST and SGST @ 6% each)	2,000

CGST and SGST @ 6% each is levied on intra-state transactions and IGST is levied @ 12% on inter-state transactions. Transactions marked with (*) are not subject to levy of GST.
Pass Journal entries for the above transaction, post them into the Ledger and prepare the Trial Balance on 30th April, 2019.

Classify the following into (i) Assets (ii) Liabilities (iii) Expenses and (iv) Revenues
Sales, Bank balance, Debtors, Bank Overdraft, Creditors, Salary to the manager,Discount to debtors, Cost of goods sold

Prepare a Purchase Book with atleast two items in it and show its posting.

Show the effect of following transaction on the accounting equation:

a.	Manoj started business with (i) Cash (ii) Goods (iii) Building	₹ 2,30,000 ₹ 1,00,000 ₹ 2,00,000
b.	He purchased goods for cash	₹ 50,000
c.	He sold goods (costing ₹ 20,000)	₹ 35,000
d.	He purchased goods from Rahul	₹ 55,000
e.	He sold goods to Varun (Costing ₹ 52,000)	₹ 60,000
f.	He paid cash to Rahul in full settlement	₹ 53,000
g.	Salary paid by him	₹ 20,000
h.	Received cash from Varun in full settlement	₹ 59,000
i.	Rent outstanding	₹ 3,000
j.	Prepaid Insurance	₹ 2,000
k.	Commission received by him	₹ 13,000
l.	Amount withdrawn by him for personal use	₹ 20,000
m.	Depreciation charge on building	₹ 10,000
n.	Fresh capital invested	₹ 50,000
o.	Purchased goods from Rakhi	₹ 10,000

(Ans: Assets = Cash ₹ 2,42,000 + Goods ₹ 1,43,000 + Building ₹ 1,90,000 + Prepaid Insurouce ₹ 2,000 = ₹ 5,77,000; Liabilities = Outstanding Rent ₹ 3,000 + Creditor ₹ 10,000 + Capital ₹ 5,64,000 = ₹ 5,77,000)

Describe the events recorded in accounting systems and the importance of source documents in those systems?

Prepare the Vouchers:

2019	Particular	₹
Jan-5	Received cash from Wahi & Co. on account vide cash receipt No. 551	10,000
Jan-10	Commission received vide cash receipt No. 520*	10,000
Jan-15	Sold leather purses for cash vide Cash Memo Nos. 307-310*	6,000
Jan-24	Sold two old machines vide Cash Memo No. 1560*	3,000

Transactions marked with * are subject to levy of CGST and SGST @ 6% each.

What is accounting period concept?

State with reasons whether the following are capital or revenue expenditures:

1. A new machine is purchased for ₹ 60,000, ₹ 800 were spent on its carriage and ₹ 1,500 were paid as wages for its installation.
2. A sum of ₹ 10,000 was spent on painting the new factory.
3. ₹ 5,000 paid for the erection of a new machine.
4. ₹ 2,000 were spent on repairs before using a second hand generator purchased recently.
5. ₹ 1,500 were spent on the repair of a machinery.
6. ₹ 10,000 was paid as brokerage on issue of shares and other expenses of issue were ₹ 25,000.

Give two examples of compensating errors.