Page 67 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 6: Preparation of Journal

4. The explanation of a Journal entry is known as ..................... Notes

5. In a Journal entry preposition ..................... is used before the name of the account to be
credited.
6. Journal is a ………………… of original entries for accounting data.
7. The journal is known as the ………………… .

8. The process of transferring the entries from Journal to Ledger accounts is called
………………
State whether the following statements are true or false:

9. Real account deals with especially the movement of assets.
10. Rent is a personal A/c.

6.9 Review Questions

1. Pass the following various journal entries:
(a) Jan. 1, 2006 Mr. Sundar has started business with a capital of ` 50,000
(b) Jan. 2, 2006 Goods purchased ` 10,000
(c) Jan. 5, 2006 Goods sold ` 5,000

(d) Jan. 10, 2006 Goods purchased from Mittal & Co. ` 10,000
(e) Jan. 11, 2006 Goods sold to Ganesh & Co. ` 10,000
(f) Jan. 12, 2006 Goods returned to Mittal & Co ` 1,500
(g) Jan. 20, 2006 Goods returned from Ganesh ` 2,000

(h) Jan. 31, 2006 Office Rent paid ` 500
(i) Feb. 2, 2006 Interim Dividend paid ` 3000
(j) Feb. 8, 2006 Cash withdrawn from bank ` 2,000
2. Your purchases 10 Furniture from other company, your starting own furniture business.
Each furniture value is ` 1000/-, your business purpose use two furniture and other
furniture are sales purpose. What will be the Purchases Entry?
3. Distinguish between material and immaterial transactions of business.

4. The ledger of Salizar Company at the end of the current year shows Accounts Receivable
$110,000, Sales $840,000, and Sales Returns and Allowances $40,000. If Allowance for
Doubtful Accounts has a credit balance of $2,500 in the trial balance, journalize the adjusting
entry at December 31, assuming bad debts are expected to be
(a) 1% of net sales, and
(b) 10% of accounts receivable.

5. Which A/c will you put goodwill in, what about commission received and why?
6. Journalise the following transactions:
(a) Started business with cash `3,00,000.
(b) Bought Goods on credit for `5,000.

(c) Sold Goods for cash `12,000 and on credit ` 8,000.

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