Page 64 - DCOM101_FINANCIAL_ACCOUNTING_I

Financial Accounting-I

Notes How are the account transactions classifi ed?

The accounts are classified through the preparation of ledger.

Illustration 2: Journalize the following transactions with narration:
Date Particulars `
2006
June 1 Receive cash from Ramu 2,500
June 4 Purchase goods for cash 1,000
June 5 Sold goods to Hari 4,000
June 8 Bought furniture from Raju 500
June 10 Paid for offi ce stationery 150
Solution:
Journal Entries

Date Particulars L.F. ` `
2006
June 1 Cash a/c Dr. 2,500
To Ramu 2,500
Cash received from Ramu
June 4 Purchases a/c Dr. 1,000
To cash a/c 1,000
Goods purchased for cash
June 5 Hari Dr. 4,000
To Goods a/c (Sales A/c) 4,000
Goods sold to Hari
June 8 Furniture a/c Dr. 500
To Raju 500
Furniture bought from Raju
June 10 Office Stationery a/c Dr. 150

To cash a/c 150
Paid for offi ce stationery

Task Identify nature of the transactions:

Ramchander has purchased goods on credit from M/s Royals Aventis for ` 15,000. The
portions of the goods were found to be damaged which worth of ` 5,000. Ramchander
immediately returned the damaged goods to Royals.
1. Identify the various types of accounts involved in the above illustrated transactions.
2. Pass the journal entries with regards to the nature of accounts involved.

6.4 Compound Entries

When two or more transactions take place in the business relating to a same account on the same
date, then in the place of passing many entries for the same account a single journal entry is
passed which is called a compound journal entry.

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