Accounting for Goods and Service Tax (GST) — Account STD 11 Commerce — Question

Mr. Abhinav Kumar, a homeopath doctor in practice has been advised by his Accountant to maintain his accounts on Accrual Basis instead of the presently followed Cash Basis of Accounting. Do you agree with the advice of the Accountant? Give reasons.

Journalise the following transactions in the books of Himanshu:

2017		₹
Dec.01	Business started with cash	75,000
Dec.07	Purchased goods for cash	10,000
Dec.09	Sold goods to Swati	5,000
Dec.12	Purchased furniture	3,000
Dec.18	Cash received from Swati in full settlement	4,000
Dec.25	Paid rent	1,000
Dec.30	Paid salary	1,500

What do you mean by Accounting Concepts?

Asha sold goods worth ₹ 19,000 to Nisha on March 2, 2016. ₹ 4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank @ 10% p.a. On the due date Nisha dishonoured the bill and the bank paid ₹ 30 as noting charges.
On 5th June, Nisha paid ₹ 3,030 (including noting charges) in cash and accepted a new bill at one month for the amount due to Asha together with interest @ 15% p.a. Record the necessary journal entries in the books of Asha and Nisha.

What is a Ledger?

On Feb. 6, 2017 A sold goods for ₹ 1,00,000 to B. B paid 40% immediately on which Aallowed a cash discount of ₹ 500. For the balance A drew a bill on B payable after 30 days. Due date of bill was a public holiday and the bill was met as per the provisions of Negotiable Instrument Act. Journalise the above transactions in the books of A and B.

Briefly explain the term ‘favourable balance as per cash book’

What Journal entries will be made by the drawer in his books, when:

1. A Bill is drawn.
2. A Bill is discounted.
3. A Bill is dishonoured and noting charges paid.

What are Reserves?