6 Marks Question

Question 16 Marks

Explain the procedure of balancing the personal accounts.

Answer

From the balancing of these accounts we can ascertain as to how much amount is owing from each individual customer and how much amount is owed to each individual creditor. If a personal account shows a debit balance, it indicates the amount owing from him. On the contrary, if a personal account shows a credit balance, it indicates the amount owing to him.In case the total of the debit side is in excess of the credit side, the difference between the two is inserted on the credit side of the account in order to make their totals equal. The words ‘By Balance c/d’, i.e., balance carried down are written against the amount of the difference. In the next accounting period, the balance is brought down on the debit side by writing the words ‘To Balance b/d'.
On the contrary, if the total of the credit side is in excess of the debit side, the difference between the two is inserted on the debit side of the account in order to make their totals equal. The words ‘To Balance c/d' are written against the amount of the difference. In the next accounting period, the balance is brought down on the credit side by writing the words 'By Balance b/d’.

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Question 26 Marks

What are the rules of posting in the Ledger?

Answer

Posting is the process of transferring entries from Journal or Subsidiary Books to the Ledger. The following rules should be observed while posting entries in the Ledger:

All transactions relating to an account should be entered at one place. In other words, two separate accounts should not be opened for posting transactions relating to the same account. If there are two customers with similar names, their accounts should be distinguished by writing their address against their names, say the Account of Anil (of Karol Bagh) and the Account of Anil (of Chandni Chowk).
The word 'To’is used before the accounts which appear on the debit side of an account. Similarly, the word ‘By' is used before the accounts which appear on the credit side of an account.
If an account has been debited in the Journal entry, the posting in the Ledger should also be made on the debit side of such account. In the Particulars column, the name of the other account which has been credited in the Journal entry should be written for reference.
If an account has been credited in the Journal entry, the posting in the Ledger should also be made on the credit side of such account. In the particulars column, the name of the other account which has been debited in the Journal entry should be written for reference.
Similar amount which has been posted on the debit side of an account should also be posted on the credit side of another account.
It is not necessary to write the word ‘Alc' after the personal accounts.

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Question 36 Marks

Record the following transaction in the Sales Book of Karunakaran & Sons, Chennai (Tamilnadu) assuming CGST @ 90% and SGST @ 9% and post them into Ledger:

2017
Dec. 5	Sold of M/s Banwari Lal & Sons, Chennai, goods valued at ₹ 2,00,000 less Trade Discount 10%
Dec. 10	Sold to M/s Kanti Bhai & Sons, Bengaluru (Karnataka):
	75 Electric Fans @ ₹ 4,000 each
	20 Room Coolers @ ₹ 10,000 each
	Less: Trade Discount 8%
Dec. 16	Mahindra & Co., Kochi (Kerala) purchased from us goods of ₹ 1,20,000, less: 5%
Dec. 24	Sold goods for cash ₹ 60,000

Answer

Note: Transaction on Dec. 24 will not be recorded in the Sales Book as it is a cash transaction.

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Question 46 Marks

Following balances appeared in the books of Ram & Shyam on January 1, 2017:
Assets: Cash in hand ₹ 30,000; Stock ₹ 36,000; Lal Chand ₹ 7,600; Mukesh Khanna ₹ 16,200; Furniture ₹ 8,000.
Liabilities: Ghanshyam ₹ 6,000; Vinod ₹ 8,000.
Following transactions took place during Jan. 2017:

2017
Jan. 2	Purchased Typewriter for ₹ 7,500
Jan. 4	Sold goods for Cash of the list price of ₹ 25,000 at 20% trade discount and 5% Cash discount
Jan. 6	Sold goods to Gopal Seth for ₹ 10,000
Jan. 8	Gopal Seth returned goods for ₹ 1,500
Jan. 12	Purchased goods from Arun ₹ 12,000, and from varun ₹ 15,000
Jan. 13	Settled Arun's account in full after deducting 5% for cash discount
Jan. 14	Paid cash to Ghanshyam in full settlement of his account
Jan. 16	Received ₹ 7,500 from Lal Chand in full settlement of his account
Jan. 17	Purchased a Scooter for office use ₹ 18,000
Jan. 20	Sold goods for cash 20,000
Jan. 22	Received from Gopal Seth ₹ 4,850 and discount allowed ₹ 150
Jan 27	Paid for Wages ₹ 7,000 and Salaries ₹ 3,000.
Jan. 28	Withdrew goods for ₹ 2,000 and Cash ₹ 1,500 for private use
Jan. 29	Paid for Life Insurance Premium of the Proprietor ₹ 1,600

Journalise the above transactions, post them into Ledger, balance them and prepare a Trial Balance.

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Question 56 Marks

Enter the following transactions in a Double Column Cash Book and Journal Proper and post them into Ledger∶

May 1	Balance of Cash in Hand ₹ 12,400; Bank Overdraft ₹ 36,000
May 3	Direct deposit by Mr. Ganesh in our bank account ₹ 10,000. Discount allowed ₹ 200
May 5	Issued a cheque of ₹ 7,700 to Mr. Suresh in full settlement of his account of ₹ 8,000
May 6	Received a cheque from X for ₹ 12,000. Discount allowed ₹ 500. This cheque was deposited into bank on 7th May
May 8	Received Cash ₹ 22,000 and cheque of ₹ 8,000 for cash sale
May 12	Cash sale ₹ 70,000 of which ₹ 55,000 banked
May 15	Cheque received on 8th May endorsed to Mr. Sunil. Discount received ₹ 150
May 20	Discounted a B/R of ₹ 10,000 at 1% through bank
May 24	Cheque received from X dishonoured, Bank debits ₹ 20 in respect of bank charges
May 25	Purchased goods for ₹ 50,000 at a trade discount of 10%. Payment was made in cash
May 26	Withdrew from bank ₹ 10,000 for office use and ₹ 2,000 for personal use
May 31	Interest debited by Bank ₹ 4,500

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Question 66 Marks

Record the following transaction in the Purchases Book of Modern Furniture House, New Delhi assuming CGST @ 6% and SGST @ 6% and post it into Ledger:

2017
Nov. 3	Purchased goods from Sachdeva Furniture Store, New Delhi :
	50 Chairs @ ₹ 2,000 each
	5 Tables @ ₹ 10,000 each
Nov. 10	Purchased furniture from Mahadeva & Co., Jaipur (Rajasthan) valued ₹ 2,00,000, less $12\frac{1}{2}\%$ Trade Discount
Nov. 18	Purchased furniture from Fashion Furniture House, Chandigarh of the list price of ₹ 2,50,000, less 15%
Nov. 20	Purchased from India Furniture House, New Delhi:
Nov. 20	100 Chairs @ ₹ 1,800 each
Nov. 25	Purchased from Mohan Lal & Sons furniture of the value of ₹ 20,000 for cash

Answer

Note:

Transaction on Nov. 25 will not be recorded in the Purchases Book as it is a cash transaction.
Input CGST, Input SGST and Input IGST according to text book are ₹ 18,900, ₹ 18,900 and ₹ 46,500 respectively while as per our calculation Input CGST, Input SGST and Input IGST are ₹ 23,250, ₹ 2,250 and ₹ 37,800 respectively.

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Question 76 Marks

Journalise the following transactions, post them into Ledger, balance the accounts and prepare a Trial Balance:

2017		₹
March 1	Shyam Sunder & Sons commenced business with cash	80,000
March 2	Purchased goods for cash	36,000
March 3	Machinery purchased for cash	4,000
March 4	Purchased goods from: Raghu	22,000
March 4	Dilip	30,000
March 6	Returned goods to Raghu	4,000
March 8	Paid to Raghu, in full settlement of his account	17,500
March 10	Sold goods to Mahesh Chand & Co. for ₹ 32,000 at 5% trade discount
March 13	Received cash from Mahesh Chand & Co.	19,800
March 13	Discount allowed	200
March 15	Paid cash to Dilip	14,850
March 15	Discount received	150
March 20	Sold goods for cash	25,000
March 24	Sold goods for cash to Sudhir Ltd.	18,000
March 25	Paid for Rent	1,500
March 26	Received for Commission	2,000
March 28	Withdrew by Proprietor for his personal use	5,000
March 28	Purchased a fan for Proprietor's house	1,200

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Question 86 Marks

Record the following transactions of M/s Mahipal Bros. in Proper Subsidiary Books, post them into the Ledger and take out a Trial Balance:

2017
Jan. 1	Commenced business with Cash ₹ 2,00,000
Jan. 2	Deposited into U.T.I Bank ₹ 1,75,000
Jan. 4	Purchased goods from Dilip for ₹ 40,000. Trade Discount 20%
Jan. 6	Gave a cheque to Dilip for ₹ 16,800 and discount allowed by him ₹ 200
Jan. 8	Goods bought from Nilesh for Cash ₹ 14,000
Jan. 10	Accepted a bill at 2 months for ₹ 15,000 drawn by Dilip
Jan. 11	Bought goods from Suresh ₹ 75,000
Jan. 13	Paid to Suresh a Cheque for ₹ 58,800 after receiving discount of 2%
Jan. 15	Cash sales made to Jyoti Parshad ₹ 8,000
Jan. 16	Sold goods to Mohinder for ₹ 20,000
Jan. 17	Goods returned by Mohinder for ₹ 1,500
Jan. 18	Received from Mohinder ₹ 7,900 after allowing a discount of 1.25%
Jan. 20	Goods sold to Banerjee ₹ 50,000
Jan. 21	Deposited into Bank ₹ 20,000
Jan. 25	Goods taken for personal use ₹ 2,000
Jan. 25	Purchased furniture ₹ 40,000 and Typewriter ₹ 10,000 for office use
Jan. 25	Payment for both the items is made by Cheque
Jan. 25	Sold goods to Anubhav ₹ 30,000
Jan. 27	Goods returned by Anubhav ₹ 5,000
Jan. 27	Received full payment from Banerjee by Cheque, sent it to Bank, Discount allowed 2%
Jan. 28	Acceptance received from Anubhav at 30 days for the amount due from him
Jan. 28	Paid for stationery ₹ 400 and for Postage ₹ 200
Jan. 31	Rent of proprietor's house paid by Cheque ₹ 2,500

Answer

*Amount paid to Suresh (98% value) = ₹ 58,800
Amount of Discount Received (2% value) $=\frac{58,800}{98}\times2=₹\ 1,200$
**Amount received from Mohinder (98.75% value) = ₹ 7,900
Amount of Discount Allowed (1.25% value) $=\frac{7,900}{98.75}\times1.25=₹\ 100$

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Question 96 Marks

Enter the following transactions in Return Inward Book of M/s Kanitkar & Co. of Mumbai (Maharashtra) assuming CGST @ 2.5% and SGST @ 2.5% and post it into Ledger:

2018
Jan. 5	Goods returned to us by Giriraj & Co., Pune (Maharashtra) worth ₹ 40,000, less 10% trade discount
Jan. 10	Shah Brothers, Jaipur (Rajasthan) returned goods, being not according to sample ₹ 30,000
Jan. 16	Allowance claimed by Jai Singh & Co., Mathura (U.P) on account of a mistake in the invoice ₹ 10,000
Jan. 20	Good returned by Gopalsons, Mumbai being defective ₹ 20,000

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Question 106 Marks

Enter the following transactions in Return Outward Book of Modern Furniture House, Udaipur (Rajasthan) assuming CGST @ 6% and SGST @ 6% and post it into Ledger:

2017
Nov. 7	Returned to Sachdeva Furniture Store, Ahmedabad (Gujarat):
	5 Chairs @ ₹ 2,000 each
	1 Table for ₹ 15,000
	Less: 10% Trade Discount
Nov. 22	Returned 8 Chairs to India Furniture House, Jodhpur (Rajasthan) @ ₹ 1,500 each, being not of specified quality
Nov. 24	Returned one Dining Table to Arora & Co., Jaipur (Rajasthan) being not according to sample ₹ 50,000
Nov. 28	Allowance claimed from Delhi Furniture Shop, Ahmedabad (Gujarat) on account of mistake in the invoice ₹ 16,000

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Question 116 Marks

Enter the following transactions in proper Subsidiary Books, post them into Ledger Accounts, balance the accounts and prepare a Trial Balance:

2017
Jan. 1	Assets: Cash in hand ₹ 20,000; Debtors: Sri Gopal ₹ 15,000, Poonam & Co. ₹ 30,000; Stock ₹ 1,75,000, Machinery ₹ 1,20,000; Furniture ₹ 40,000
Jan. 1	Liabilities: Bank Overdraft ₹ 33,000; Creditors: Niranjan Lal ₹ 24,000, Bombay Trading Co. ₹ 16,000
Jan. 2	Purchased from Manohar Lal & Sons goods of the list price of ₹ 20,000 at 10% trade discount
Jan. 5	Returned to Manohar Lal & sons goods of the list price of ₹ 2,000
Jan. 10	Issued a Cheque to Manohar Lal & Sons in full settlement of their account
Jan. 12	Sold to Sri Gopal, goods worth ₹ 25,000
Jan. 15	Received Cash ₹ 10,000 and a Cheque for ₹ 8,000 from Sir Gopal. The Cheque was immediately sent to bank
Jan. 16	Withdrew for personal use: Cash ₹ 5,000 and goods ₹ 3,000
Jan. 17	Accepted a bill for 45 days drawn by Niranjan Lal for the amount due to him
Jan. 18	Acceptance received from Poonam & Co. for the amount due from them payable after 30 days
Jan. 19	Sold to Raghubir Brothers, goods valued ₹ 16,000
Jan. 20	Cash purchases ₹ 15,000
Jan. 22	Withdrew from bank fo office use ₹ 10,000
Jan. 23	Purchased from Bombay Trading Co., goods valued ₹ 24,000
Jan. 24	Sri Gopal returned goods worth ₹ 2,000
Jan. 25	Received from Raghubir Brothers ₹ 10,000
Jan. 27	Accepted a bill for ₹ 25,000 for 1 month drawn by Bombay Trading Co
Jan. 27	Paid Rent by Cheque ₹ 2,800
Jan. 27	Received Commission in Cash ₹ 800
Jan. 31	Paid salaries ₹ 5,000

Answer

Note: Answer of Journal proper as per solution (₹ 6,51,600) is different from answer provided by the book (₹ 4,82,000).

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Question 126 Marks

Enter the following transactions in proper Subsidiary Books and post them into Ledger:

2017
March 2	Purchased from Navrang Traders for ₹ 8,300
March 3	Sold goods to Rohan for ₹ 3,200
March 5	Bought of Ruchi Traders for ₹ 12,100
March 8	Rohan returns the goods for ₹ 600
March 10	Purchased goods from Jaipur Stores of the list price of ₹ 15,400 less 5% Trade Discount
March 12	Sold goods to Arun Traders for ₹ 18,000 less 15% Trade Discount
March 12	Bought of Amit Traders for ₹ 10,000
March 16	Purchased Machinery from Kirloskar Ltd. ₹ 20,000
March 18	Returned goods to Jaipur Stores for ₹ 800 less 5% Trade Discount
March 19	Arun Traders returned goods for ₹ 3,000, less 15% Trade Discount
March 20	Sales to Kalpna & Co. for ₹ 14,700
March 22	Purchased goods from Navrang Traders ₹ 25,000
March 25	Returns outward to Navrang Traders for ₹ 1,200
March 26	Sales to Rupa Traders for ₹ 10,000 less 10% Trade Discount
March 29	Returns inward from Kalpana & Co. for ₹ 2,000

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Question 136 Marks

Enter the following transactions in subsidiary books, post them into Ledger and prepare a Trial Balance:
The following balances existed in Sunil Bros. books on April 1, 2017:
Assets: Cash in hand ₹ 27,500; Bank Balance ₹ 40,000; Debtors: Ashok ₹ 18,000, Bahadur ₹ 25,000, Charu ₹ 30,000; Stock ₹ 1,60,000 and Furniture ₹ 40,000.
Liabilities: Creditors: Dinesh ₹ 20,000 and Ekta ₹ 15,000.

2017
April 1	Cash Sales ₹ 18,000
April 2	Deposited into Bank ₹ 20,000
April 3	Purchased from Dinesh:
	300 metres Cotton @ ₹ 60 per metre
	200 metres Silk @ ₹ 100 per metre
April 5	Cheque issued to Dinesh for ₹ 25,000
April 6	Accepted a bill at one month for ₹ 15,000 drawn by Dinesh
April 8	Sold to Ashok:
	400 metres Cotton @ ₹ 80 per metre
	250 metres Silk @ ₹ 140 per metre
April 10	Returned by Ashok 50 metres Silk
April 12	Received Cash ₹ 8,000 and a Cheque for ₹ 40,000 from Ashok. Cheque was immediately sent to Bank.
April 13	Received a B/R from Bahadur for ₹ 20,000 at one month
April 15	Accepted a bill at two months drawn by Ekta for the amount due to her.
April 16	Purchased a Computer for office use from Shiva Ltd. for ₹ 45,000 on Credit.
April 18	Cash purchases ₹ 10,000
April 19	Received full payment from Charu by cheque, sent it to Bank. Discount allowed 2%
April 20	Issued a cheque to Dinesh in full payment of his account after deducting 1% discount
April 22	Settled the account of Shiva Ltd. by a cheque
April 24	Proprietor took away goods worth ₹ 5,000 and Cash ₹ 6,000
April 25	Purchased from Ganesh 200 metres Cotton @ ₹ 70 per metre subject to trade discount of 5%
April 27	Paid Rent ₹ 3,000 and Salaries ₹ 8,000
April 30	Interest allowed by bank ₹ 600

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Question 146 Marks

Prepare journal Entries of the following postings:

Answer

Solution is as follows.

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