Railway Accounts Department Examinations

Showing posts with label Journal entries. Show all posts
Showing posts with label Journal entries. Show all posts

Saturday, September 16, 2023

Bookkeeping - Journal Entries - Examples




 Bookkeeping - Journal Entries - Examples  


Nageswara Rao 9492432160


  1. If the Proprietor has withdrawn cash from the Business for Personal use, the journal entry is _________________


  1. Drawings Account is Debited and Capital Account is Credited 

  2. Cash Account is Debited and Drawings Account is Credited

  3. Capital Account is Debited and Cash Account is Credited 

  4. None of these  


Answer: D. None of these.  The correct answer is Drawings Account is Debited and Cash Account is Credited. 


Explanation: 


Drawings mean the amount withdrawn by the Proprietor from the Business. Hence Proprietor’s account is a personal account.  However, we operate Drawings Account in case of withdrawal of money and operate Capital Account in case of inducting the money into the Business.  


The drawing account comes under Personal Account.  The Rule of the Personal Account is Debit the Receiver and Credit the Giver.   


Hence Drawings Account is Debited. 


Cash is a Real Account.  The Rule of a Real Account is Debit what comes in and Credit what goes out. 


Hence the Cash Account is credited. 




First Account

Second Account

The Accounts Involved in the Transaction

Drawings

Cash

Type of Account

Personal Account

Real Account

Rule of Account

Debit the Receiver and Credit the Giver

Debit is What comes in and Credit is What goes out

Debit or Credit

Debited. Because the Proprietor is a receiver

Credited. Because Cash is going out from the Business




  1. Cash Sales to Mr. Mohan.  The Journal Entry is ___________ 


  1. The Cash Account is Debited and the Sales Account is Credited

  2. Cash Account is Debited and Mohan Account is Credited

  3. Mohan's Account is Debited and the Sales Account is Credited 

  4. None of these  


The correct answer is A. Cash Account is Debited and the Sales Account is Credited




First Account

Second Account

The Accounts Involved in the Transaction

Cash

Sales

Type of Account

Real Account

Nominal Account

Rule of Account

Debit is What comes in and Credit is What goes out

Debit all Expenses & losses and Credit all Incomes and Gains

Debit or Credit

Debited (Because cash is received)

Credited (because Sales is income)



Note: Both Purchases and Sales are Nominal Accounts.  Purchases imply expenses, whereas Sales imply generating Revenue (i.e., Incomes and Gains).  Thus as per the Golden Rule of Nominal Accounts, Debit all expenses & losses and Credit all incomes & gains. 



  1. Credit purchases from Mr Krishna.  The Journal entry is _________


  1. Purchase Account is Debited and Cash Account is Credited 

  2. Goods Account is Debited and Krishna Account is Credited

  3. Purchases Account is Debited and Krishna Account is Credited 

  4. Krishna Account is Debited and Purchases Account is Credited 


The Correct Answer is C.  




First Account

Second Account

The Accounts involved in the Transaction

Krishna

Purchases

Type of Account

Personal Account

Nominal Account

Rule of Account

Debit the Receiver and Credit the Giver

Debit all Expenses & losses and Credit all Incomes and Gains

Debit or Credit

Credited. Because Krishna is Giver. 

Debited (Because Purchases is an expenses) 



Note: Both Purchases and Sales are Nominal Accounts.  Purchases imply expenses, whereas Sales imply generating Revenue (i.e., Incomes and Gains).  Thus as per the Golden rule of Nominal Accounts, Debit all expenses & losses and Credit all incomes & gains.  



  1. Salary paid to Ms Sunitha through Cheque.  The Journal entry is _________ 


  1. Sunitha Account is Debited and Bank Account is Credited

  2. Salaries Account is Debited and Bank Account is Credited

  3. Bank Account is Debited and Sunitha Account is Credited

  4. Bank Account is Debited and Salaries Account is Credited 


The correct Answer is B


 


First Account

Second Account

The Accounts involved in the Transaction

Bank

Salaries

Type of Account

Real Account

Nominal Account

Rule of Account

Debit What comes in and Credit What goes out

Debit all Expenses & losses and Credit all Incomes and Gains

Debit or Credit

Credited (Because cash goes out from the Bank)

Debited (because Salaries is an expense.)


Notes: Sunitha Account is not comes in records. Because the Firm pays salary for services rendered by Sunitha.  Hence Salaries Account is recorded, not Sunitha Account.  



    


  1. Goods returned to ABC limited.  Journal entry is _______________


  1. Goods outward account is debited and ABC limited account is credited

  2. Purchases Account is debited and ABC limited account is credited

  3. ABC limited account is debited and Goods inward account is credited

  4. None of these  


The Correct answer is ABC Limited Account is Debited and Goods Outward Account is Credited. 


Notes: Goods outward means Purchase Returns  and Goods inward means Sales Returns.  



First Account

Second Account

The Accounts involved in the Transaction

ABC Limited

Goods outward

Type of Account

Personal Account

Nominal Account

Rule of Account

Debit the Receiver and Credit the Giver

Debit all Expenses & losses and Credit all Incomes and Gains

Debit or Credit

Debited.  Because ABC limited is receiver.  

Credited.  Because Purchases is an expenses and Purchase Returns or Goods outward is an gain 



Notes: Candidates are advised to do the above templates initially till become confident in journalising.the transactions. 


-- end–


Wednesday, April 7, 2021

Bookkeeping - Accounting Cycle (Miniature Model)

 Bookkeeping  - Accounting Cycle

 (Miniature Model) 


Five Stages

1.       Transactions

2.       Journal Entries

3.       Ledger

4.       Trial Balance

5.       Final Accounts

 

1.        Transactions in ABC Ltd.

 

·         Started Business with Rs. 100

·         Cash Purchases – Rs. 50 (50 units)

·         Cash Sales  -  Rs. 60  (40 units)

·         Wages – Rs. 5

·         Salaries – Rs. 5

·         Furniture purchased – Rs. 20

·         Depreciation on Furniture – Rs. 5

·         Loan from Krishna – Rs. 20

·         Interest on Loan – Rs. 2

             Adjustments: Closing Stock – Rs. 10

2.       Journal Entries

Date

Particulars

LF

Dr

Cr

 

Cash A/c Dr

  To Capital

 

100

 

100

 

Purchases A/c Dr

  To Cash

 

50

 

50

 

Cash A/c Dr

  To Sales

 

60

60

 

Wages A/c Dr

  To cash

 

5

 

5

 

Salaries A/c Dr

  To Cash

 

5

 

5

 

Furniture A/c Dr

  To cash

 

20

 

20

 

Depreciation A/c Dr

  To Furniture

 

5

 

5

 

Cash A/c Dr

  To Krishna

 

20

 

20

 

Interest A/c  Dr

  To Cash

 

2

 

2

 

3.       Ledger

 

Capital A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Balance c/d

 

100

 

 

By Cash

 

100

 

Total

 

100

 

 

Total

 

100

 

 

 

 

 

 

By Balance b/d

 

100

 

Cash A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Capital

 

100

 

 

By Purchases

 

50

 

To Sales

 

60

 

 

By Wages

 

5

 

To Krishna

 

20

 

 

By Salaries

 

5

 

 

 

 

 

 

By Furniture

 

20

 

 

 

 

 

 

By Interest

 

2

 

 

 

 

 

 

By Balance c/d

 

98

 

Total

 

180

 

 

Total

 

180

 

To Balance b/d

 

98

 

 

 

 

 

 

Purchases A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Cash

 

50

 

 

 

 

 

 

Total

 

50

 

 

 

 

 

 

Sales A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

 

 

 

 

 

By Cash

 

60

 

 

 

 

 

 

Total

 

60

 

Wages A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To cash

 

5

 

 

 

 

 

 

Total

 

5

 

 

 

 

 

 

Salaries A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To cash

 

5

 

 

 

 

 

 

Total

 

5

 

 

 

 

 

 

Furniture A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Cash

 

20

 

 

By  Depreciation

 

5

 

 

 

 

 

 

By Balance c/d

 

15

 

Total

 

20

 

 

Total

 

20

 

To Balance b/d

 

15

 

 

 

 

 

 

Depreciation A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Furniture

 

5

 

 

 

 

 

 

Total

 

5

 

 

 

 

 

 

Krishna A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Balance c/d

 

20

 

 

By Cash

 

20

 

Total

 

20

 

 

Total

 

20

 

 

 

 

 

 

By Balance b/d

 

20

 

Interst A/c

Dr

 

Cr

Date

Particulars

JF

Amount

 

Date

Particulars

JF

Amount

 

To Cash

 

2

 

 

 

 

 

 

Total

 

2

 

 

 

 

 

 

 

4.       Trial Balance

                                                                                Trial Balance

SN

Particulars

LF

Dr

Cr

1

Capital

 

 

100

2

Cash

 

98

 

3

Purchases

 

50

 

4

Sales

 

 

60

5

Wages

 

5

 

6

Salaries

 

5

 

7

Furniture

 

15

 

8

Krishna

 

 

20

9

Depreciation

 

5

 

10

Interest

 

2

 

 

Total

 

180

180

 

5.       Final Accounts

                                               Trading A/c of ABC ltd for the year ending______

Dr

 

Cr

SN

Particulars

 

Amount

 

SN

Particulars

 

Amount

 

To Purchases

 

50

 

 

By Sales

 

60

 

To Wages

 

5

 

 

By Closing Stock

 

10

 

To Gross Profit

(c/d to P & L A/c)

 

15

 

 

 

 

 

 

Total

 

70

 

 

Total

 

70

 

                                                                  Profit & Loss A/c of ABC Ltd for the year ending____

Dr

 

Cr

SN

Particulars

 

Amount

 

SN

Particulars

 

Amount

 

To Salaries

 

5

 

 

By Net Profit

(b/d from Trading A/c)

 

15

 

To Depreciation

 

5

 

 

 

 

 

 

To Interest

 

2

 

 

 

 

 

 

To Net Profit

(C/d to Capital)

 

3

 

 

 

 

 

 

Total

 

15

 

 

Total

 

15

 

 

 

 

 

                                                         Balance Sheet of ABC ltd as on 31st March _____

Liabilities

 

Assets

SN

Particulars

 

Amount

 

SN

Particulars

 

Amount

 

Capital

100

 

 

 

Furniture

 

15

 

+ Net Profit

3

103

 

 

Cash

 

98

 

Sundry Creditors

 

20

 

 

Closing Stock

 

10

 

 

 

 

 

 

 

 

 

 

Total

 

123

 

 

 

 

123