Account 6 Marks Question

Solution is as follows.

Opening Entry: Opening entry is recorded in the beginning of a financial year to open the books by debiting assets and crediting liabilities and the capital appearing in the Balance Sheet of the previous Year.
Closing Entries: Closing entries are passed at the end of the year to close the accounts relating to expenses and revenues (or Nominal Accounts) by transferring them to the Trading Account and Profit and Loss Account. For example, the Salary Account is closed by transferring its balance to the Profit and Loss Account, the Purchases Account is closed by transferring its balance to the Trading Account and so on.The entries passed are:

Goods and Services Tax (GST): It is a tax levied and collected on supply (sale) of goods and/ or services or both. It is charged by the seller on the net sale value, i.e., sale value less trade discount. The seller is bound to charge GST on sale made and deposit it in the Government Account. For the seller of goods, it is not sale because it is collected on behalf of the Government and is to be paid into Government Account.
In the case of intra-state (i.e., within the state) sale of goods, both CGST and SGST is charged at half the prescribed rate of GST. And in the case of inter-state (i.e., outside the state) sale of goods, IGST is charged at the prescribed rate of GST.
CGST and SGST charged on intra-state sale of goods is credited to 'Output CGST Account and Output SGST Account' respectively. IGST charged on inter-state sale of goods is credited to Output IGST Account.

Transfer entries are also termed as Closing entries. At the end of each year, balances in all accounts, except for assets and liabilities accounts are transferred to the other accounts to close these accounts and also for assessing the financial performance and positions. For example: All the expense accounts are transferred to the Debit side of the Trading and Profit and loss A/c and all the income or gains accounts are transferred to the Credit side of the Trading and Profit and Loss A/c by passing journal entries for the same. These are known as transfer entries This balances the expense accounts and the Trading and Profit and Loss A/c helps assess the financial performance of the firm. Another example would be the transfer of the Drawings A/c to the Debit side of the Capital account at the end of each year. This closes the drawings A/c and tells the balance of capital remaining in the firm.One transfer entry is given below:

Solution is as follows.

Solution is as follows.

1. Journal Proper: Because purchase of fixed assets on credit is recorded in Journal proper.
2. Sales Book: Because Sales Book records only credit sales of goods.
3. Sales Return Book: Because goods returned by customer are recorded in Sales Return Book.
4. Purchases Book: Because Purchases Book records only Credit Purchases of goods.
5. Journal Proper: Because Journal Proper records all those transactions which cannot be recorded in any of the other subsidiary books. Interest on proprietor's capital is also one of those items which can only be recorded in Journal Proper.
6. Purchases Return Book: Because it records only goods returned by the firm to its suppliers.
7. Cash Book: Because Cash Book records cash receipts and cash payments.

Solution is as follows:

Solution is as follow:

Solution is as follows.