Question
Explain internal and external transaction.
✓
Answer
Internal transaction : These type of transactions would take place within business. In certain transactions of business, there is no need of other parties. That is why, these transactions are called Internal transactions. e.g., Loss in business due to natural calamity; depreciation on asset, asset became out of dated, etc. Internal transactions are all economic transactions but are non-cash transactions. These transactions are recorded in the books of accounts. External transaction When transactions are taken place between the business and other parties, then these transactions are called External transactions. e.g., purchased goods from traders, cash withdrawn from bank, amount paid for insurance premium, paid salary to employees, purchase of asset, payment of interest on $B.O.D$. to bank, etc. External transactions are all economic transactions, which are recorded in the books of accounts.
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Similar questions
Explain the following terminologies :
$(a)$ Expense
$(b)$ Creditors
$(c)$ Debtors
→$(a)$ Expense
$(b)$ Creditors
$(c)$ Debtors
Disclose following information in Income-Expenditure account for the year ending $31-3-2015.$
Note: $(i)$ Salary outstanding $2013-14: Rs. 3,000, 2014-15: Rs. 6,300.$ $(ii)$ Opening stock of stationery $Rs. 670$ and closing stock $Rs.250.$
→| $Dr.$ | Receipt - Payment Account for the Year ending $31-3-2015$ | $Cr.$ | ||||
| Income | Amt. (Rs.) |
Expense | Amt. (Rs.) |
|||
| To Subscription: | By Taxes and Insurance | $6,500$ | ||||
| $2013-14$ | $1,200$ | By Salary | $32,800$ | |||
| $2014-15$ | $75,000$ | By stationery Expense | $2,500$ | |||
| $2015-16$ | $1,650$ | $77,850$ | ||||
Classify the following accounts:
$1.$ Commission account
$2.$ Patent account
$3.$ Darmayo account
$4.$ Insurance premium account
$5.$ Bank account
$6.$ Demurrage account
→$1.$ Commission account
$2.$ Patent account
$3.$ Darmayo account
$4.$ Insurance premium account
$5.$ Bank account
$6.$ Demurrage account
Write journal entry for the following transactions.
$(i)$ Goods of $Rs.1,000$ purchased from Parth.
$(ii)$ Goods of $Rs.2,000$ sold to Zalak.
$(iii)$ Salary of $Rs.1,500$ paid to Amee.
→$(i)$ Goods of $Rs.1,000$ purchased from Parth.
$(ii)$ Goods of $Rs.2,000$ sold to Zalak.
$(iii)$ Salary of $Rs.1,500$ paid to Amee.
Give the specimen of a bill and explain its details:
Pass adjustment entry for the following and also show its effect in final accounts: Goods of $Rs. 10,000$ destroyed by fire. Insurance company has accepted a claim of $Rs. 8,000$
→Disclose the following information in Income — Expenditure Account for the year ending $31-3-2015.$
→Record the following transactions in the journal proper of Shri Naresh:
1. A bill of ₹ 6,000 drawn on a debtor Ashok, which he accepted and returned it to us.
2. Distributed goods of ₹ 3,000 as free samples.
3. ₹ 6,500 payable to Pankaj is accepted by Yogesh to pay.
1. A bill of ₹ 6,000 drawn on a debtor Ashok, which he accepted and returned it to us.
2. Distributed goods of ₹ 3,000 as free samples.
3. ₹ 6,500 payable to Pankaj is accepted by Yogesh to pay.
Avinash of Ahmedabad has purchased goods of $Rs. 2,00,000$ from Rajesh of Rajkot and payment is made by cheque. From this goods of $Rs. 1,30,000$ sold for $Rs. 1,60,000$ to Bhavesh of Bhavnagar and payment received through cheque. $12 \% GST$ rate is applicable to these transactions, were $CGST$ is $6\%$ and $SGST$ is $6 \%$. Pass journal entries till the accounting settlement of $GST$ in the books of Avinash.
→Prepare trading account for the year ended on $31-03-2015$ from the following balances of Bhavesh :
Cost price of closing stock of goods as on $31-03-2015$ was $₹ 44,000,$ whereas its market value is $₹ 50,000.$
→Cost price of closing stock of goods as on $31-03-2015$ was $₹ 44,000,$ whereas its market value is $₹ 50,000.$