Recording of Transactions - 1 — Account STD 11 Commerce — Question

Explain the statement 'Cash book is a Journalised Ledger'.

Prepare the Accounting Equation on the basis of the following:

1. Started business with cash ₹ 1,40,000 and Stock ₹ 2,50,000.
2. Sold goods (costing ₹ 50,000) at a profit of 25% on the cost.
3. Deposited into bank account ₹ 1,80,000.
4. Purchased goods from Mohan ₹ 80,000.

On 31st December, 2014 the Cash Book of Basu showed an overdraft of ₹ 18,000 with the Bank of India. The balance did not agree with balance as shown by the Bank Pass Book and you find that Basu had paid into the Bank on 26th December four cheques for ₹ 10,000; ₹ 12,000; ₹ 6,000 and ₹ 8,000. Of these the cheque for ₹ 6,000 was credited by the bank in January, 2015. Basu had issued on 24th December three cheques for ₹ 15,000, ₹ 12,000, and ₹ 7,000. The first two cheques were presented to the bank for payment in December and the third in January, 2015.
You also find that on 31st December, 2014, the bank had debited Basu's Account for ₹ 500 for interest and ₹ 20 for charges but Basu has not recorded these amounts in his books.
You are required to prepare a Bank Reconciliation Statement as on 31st December, 2014 and ascertain the balance as per bank Pass Book.

Rim Zim Ltd. maintains a current account with the State Bank of India. On 31st March, 2017, the bank column of its cash book showed a debit balance of ₹ 1,54,300. However, the bank statement showed a different balance as on that date. The following were the reasons for the difference:

(i)	Cheques deposited, but not yet credited by the bank	75,450
(ii)	Cheques issued, but not yet presented for payment	80,760
(iii)	Bank charges not yet recorded in the cash book	1,135
(iv)	Cheques received by the bank directly from trade debtors	1,35,200
(v)	Insurance premium paid by the bank as per standing instructions, but not yet recorded in the cash book	15,400
(vi)	Dividend collected by the bank, but not yet recorded in the cash book	1,000

Find out the balance as per the bank statement as on 31st March, 2017.

State the rules of debiting and crediting of accounts.

A boiler was purchased from abroad for ₹ 10,000. Shipping and forwarding charges ₹ 2,000, Import duty ₹ 7,000 and expenses of installation amounted to ₹ 1,000.
Calculate the Depreciation for the first three years (separately for each year) @ 10% p.a. on Diminishing Balance Method.

Tiwari and Sons find that the bank balance shown by their Cash Book on December 31, 2016 is ₹ 40,500 (Credit) but the Pass Book shows a difference due to the following reasons:

1. A cheque for ₹ 5,000 drawn in favour of Manohar has not yet been presented for payment.
2. A post-dated cheque for ₹ 900 has been debited in the bank column of the Cash Book but it could not have been presented in any case.
3. Cheques totalling ₹ 10,200 deposited with the bank have not yet been collected and an another cheque for ₹ 4,000 deposited in the account has been dishonoured.
4. A Bill Payable for ₹ 10,000 was retired by the Bank under a rebate of ₹ 150 but the full amount of the bill was credited in the bank column of the cash book.

Prepare a Bank Reconciliation Statement and find out the balance as per Pass Book.

Rectify the following errors by passing Journal entries:

1. A sum of ₹ 470 received from Ganga was posted to her debit as ₹ 740.
2. A debit balance of ₹ 550 in the personal account of Mr. John was undercast.
3. Bills Receivable from Brown for ₹ 3,000 posted to the credit of Bills Payable Account and credited to Brown’s Account.
4. Goods returned by Mridul ₹ 225 have been entered in the Returns Outward Book.

How will be the following errors rectified?

1. Purchases Book is overcasted by ₹ 10,000.
2. Purchases Return Book is overcasted by ₹ 1,000.
3. Purchases Return Book’s balance is carried forward in excess by ₹ 100.
4. Purchases Book’s balance is carried forward in excess by ₹ 1,000.