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Analyse the Following Transactions and Find Out Debit or Credit

Essay by   •  November 19, 2011  •  Study Guide  •  28,210 Words (113 Pages)  •  1,529 Views

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ANALYSE THE FOLLOWING TRANSACTIONS AND FIND OUT DEBIT OR CREDIT

FOLLOWING TRADITIONAL RULES:

Exercise: 1

1) Gopal commenced business with cash;

2) Purchased furniture;

3) Purchased goods from Madura on credit.

4) Purchased goods for cash.

5) Sold goods to Narayana on credit.

6) Sold goods for cash.

7) Paid wages.

8) Received commission.

9) Took loan from Allahabad Bank

10) Paid Madura on account.

11) Received from Narayana on account.

12) Deposited cash into bank;

13) Withdrew cash for personal use;

14) Paid interest on Bank loan.

15) Withdraw money from bank.

Solution:

Sr.no. Accounts Involved Classification of Accounts Rules of Debit & Credit

1 Cash A/c Real Debit-What comes in

Capital A/c Personal Credit-The Giver

2 Furniture A/c Real Debit-What comes in

Cash A/c Real Credit-What goes out

3 Purchase A/c Real Debit-What comes in

Madura A/c Personal Credit-The Giver

4 Purchase A/c Real Debit-What comes in

Cash A/c Real Credit-What goes out

5 Narayana A/c Personal Debit-What comes in

Sales A/c Real Credit-What goes out

6 Cash A/c Real Debit-What comes in

Sales A/c Real Credit-What goes out

7 Wages A/c Nominal Debit-All Expenses & Losses

Cash A/c Real Credit-What goes out

8 Cash A/c Real Debit-What comes in

Commission A/c Nominal Credit-All Incomes & Gains

9 Cash A/c Real Debit-What comes in

Bank Loan A/c Personal Credit-The Giver

10 Madura A/c Personal Debit-The Receiver

Cash A/c Real Credit-What goes out

11 Cash A/c Real Debit-What comes in

Narayana A/c Personal Credit-The Giver

12 Bank A/c Personal Debit-The Receiver

Cash A/c Real Credit-What goes out

13 Drawings A/c Personal Debit-The Receiver

Cash A/c Real Credit-What goes out

14 Interest on loan A/c Nominal Debit-All Expenses & Losses

Cash A/c Real Credit-What goes out

15 Cash A/c Real Debit-What comes in

Bank A/c Personal Credit-The Giver

Exercise: 2

Journalize the following transactions in the books of Nichi Software.

Rs.

1. 1-4-2001 Started business with cash 45,000

2. 1-4-2001 Paid into Bank 25,000

3. 2-4-2001 Goods purchased for cash 15,000

4. 3-4-2001 Purchase of Furniture and payment made by cheque 5,000

5. 5-4-2001 Sold goods for cash 6,000

6. 8-4-2001 Sold goods to Arvind 4,000

7. 10-4-2001 Goods purchased from Bharath 7,000

8. 12-4-2001 Goods returned to Bharath 1,000

9. 15-4-2001 Sold goods to Chanchan for Cash 2,500

10. 18-4-2001 Cash received from Aravind Rs. 3,960 and discount allowed to him Rs.

40

11. 21-4-2001 Withdrawn from bank for private use 1,000

12. 22-4-2001 Withdrew from bank for use in the business 5,000

13. 25-4-2001 Paid telephone bill 400

14. 28-4-2001 Cash paid to Bharath in full settlement of his account 5,940

15. 30-4-2001 Paid for Rent Rs. 1,000; Salaries Rs. 2,500 and Stationery Rs. 200.

Solution:

Books of Niche Software

JOURNAL

Date Particulars L.F. Amount Amount

Dr. Cr.

01-04-2009 By Cash A/c Dr. 45000

To Capital A/c Cr. 45000

(Being capital introduced)

01-04-2009 By

...

...

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