Page 75 - DMGT104_FINANCIAL_ACCOUNTING

Unit 5: Preparation of Journal, Ledger and Balancing

Journal is sub-divided into cash and credit transactions. Cash transactions are directly recorded Notes
into cash book and credit sales and credit purchase are directly recorded in the sales and purchase
books and the remaining transactions are recorded into Journal Proper. These transactions may
be relating to:
1. Opening Entry
2. Closing Entry

3. Transferring
4. Rectification, and
5. Adjustment

Other Subsidiary Books

As per the nature of the business, the entrepreneurs may maintain some other books also. These
may be:
1. Consignment Outwards Book
2. Sale and Return Book
3. Cash Collection Book
4. Cash Sales Book.

Notes Journalising can be generally categorized into following various categories:
1. Taking place within the same natured accounts
2. Taking part in between accounts of two different in categories.

Illustration 4: Record the following transactions into various Subsidiary Books and Journal
Proper of Mr. Shiv Kumar:

2008
January 1 Cash in hand 31,400, Cash at Bank 50,800 and Capital Account 82,200.
January 2 Bought goods for cash 8,200.
January 5 Purchased goods from Lalit Mohan & Co. for 11,600 less 10% trade discount.
January 7 Sold goods to Shobhit & Co. for 17,800 less 20% trade discount.
January 9 Withdrew 1,000 from bank for private use.
January 12 Sold goods to Karim for 12,800.

January 15 10,000 paid to Lalit Mohan in full settlement of their claim.
January 18 Goods worth 800 returned by Karim.
January 20 Received 8,000 from Karim.
January 21 Purchased goods from Krishna & Co. for 17,400.
January 23 12,000 paid to Krishna & Co. by cheque, discount allowed 600.
January 24 Purchased furniture for 1,600 from Sardar Furniture House on credit.

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