Lesson 7. PREPARATION OF JOURNAL

Module 2. Accounting procedure

Lesson 7

PREPARATION OF JOURNAL

7.1 First Step of Accounting Procedure:- “Preparation of Journal”.

Illustration 7.1

Consider the following transactions and pass journal entries for them and then post them into appropriate ledgers of “Wise Traders and Co.”

March

1. Started business with Rs.1,00,000 in Bank, Rs. 20,000 cash

1. Bought shop fittings Rs. 20,000 and a scooter Rs. 30,000, both by cheque.

2. Paid rent by cheque – Rs. 2500

3. Bought goods for Re sale on credit from “K. K. and Co.,” Rs. 25,000

4. Cash sales worth Rs. 2500

8. Paid wages of worker – Rs. 500 in cash.

10. Paid insurance by cheque – Rs. 250.

12. Cash sales – Rs. 4,000/-

15. Paid wages of worker – Rs. 500/-.

Goods returned to KK & Co. worth Rs. 3000/.

17. Paid to ‘K K and Co.,’ Rs. 15000 by cheque.

19. Bought goods for resale from “RC and Co” on credit – Rs. 12,500

19. Cash Sale - 3500

22. Paid wages to worker in cash Rs. 500

24. Bought stationary Rs. 250 by cash.

25. Cash sales Rs. 7500

27. Paid “RC and Co.” Rs. 7000 by cheque

29. Paid wages to worker Rs. 500.

31. Deposited Rs. 10,000 into bank.


JOURNAL

Date

Particulars

L.F. No.

Amount

(Dr.)

Amount

(Cr.)

March1

Bank a/c Dr.


1,00,000



Cash a/c Dr.


20,000



To capital a/c



1,20,000


(Being the business started with given capital)




2

Furniture and Fittings a/c Dr.


20,000



Scooter a/c Dr.


30,000



To bank a/c



50,000


(Being the purchase of fittings and scooter by cheque)




2

Rent a/c Dr.


2500



To bank a/c



2500


(Being the payment of Rent by cheque)




3

Goods a/c Dr.


25,000



To “K K and Co.” a/c



25,000


(Being the goods bought on credit)




4

Cash a/c Dr.


2500



To sales a/c



2500


(Being the cash sales)




8

Wages a/c Dr.


500



To cash a/c



500


(Being the wages paid in cash)




10

Insurance a/c


250



To bank a/c



250


(Being the insurance paid by cheque)




12

Cash a/c Dr.


4000



To sales a/c



4000


(Being cash sales)




15

Wages a/c


500



To cash a/c



500


(Being wages paid by cash)




15

“K K and Co.,” a/c Dr.


3000



To returns outward a/c



3000


(Being goods returned)




17

“KK and Co” a/c Dr.


15000



To bank a/c



15000


(Being paid to “K K and Co” by cheque)





Date

Particular


L.F.

Amount
Dr.

Amount
Cr.

19

Goods Ac

Dr


12500



To RC and Co Ac




12500


(Being goods brought on credit)





19

Cash Ac

Dr


3500



To Sales Ac




3500


(Being cash sales)





22

Wages Ac

Dr


500



To Cash Ac




500


(Being wages paid in cash)





24

Stationary Ac

Dr


250



To Cash Ac




250


(Being stationery bough by cash)





25

Cash Ac

Dr


7500



To Sales Ac




7500


(Being cash sales)





27

RC and Co' Ac

Dr


7000



To Bank Ac




7000


(Being paid to 'RC and Co by cheque)





29

Wages Ac

Dr


500



To Cash Ac




500


(Being wages paid in cash)





31

Bank Ac

Dr


10000



To Cash Ac




10000


(Being Cash deposited in to bank)





Last modified: Friday, 5 October 2012, 9:45 AM