Accountancy

Module 1

Samitesh Brahma
Department of Humanities
Jorhat Engineering College
Module 1
✓ Concept and classification of accounts
✓ Double entry system of book keeping
✓ Golden rules of Debit and Credit
✓ Journal- Definition, advantages, Procedure of journalizing
✓ Ledger- Advantages, rules regarding posting, balancing of ledger
accounts
✓ Trial Balance- Definition, objectives, procedure of preparation.
Meaning of Accounting

The American Institute of Certified Public Accountants defines

accounting as “the art of recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events,
which are, in part atleast, of a financial character, and interpreting and
the results thereof. ”
 Characteristics
1. Accounting is an art as well as science.
2. Recording of financial transactions only.
3. Classifying.
4. Summarizing.
5. Interpretation of results.
6. Communicating

NOTE: Recording, classifying and summarizing are termed as “Process of accounting” or

“accounting cycle”
Objectives
1. To keep systematic record of business transaction
2. To calculate profit or loss
3. To know the exact reasons leading to net profit or net loss
4. To ascertain the financial position of business
5. To ascertain the operational performance.
6. To provide information to various parties
Functions
1. Maintaining complete and systematic records.
2. Communicating the financial results to various parties.
3. Protecting the assets of business.
4. Providing assistance to management
5. Compliance of legal needs.
Accounting Cycle
Transaction

The accounting cycle is a Closing the

books
Journal
Entries
collective process of
identifying, analyzing, and
recording the accounting
Financial Posting in
events of a company. It is a statements Ledger

standard 8-step process that

begins when a transaction
occurs and ends with its Adjusting
Trail
journal
Balance
inclusion in the financial entries

statements. worksheet

Figure: Accounting Cycle

Accounting Cycle
1. Identify Transactions: An organization begins its accounting cycle with the identification of those transactions that
comprise a bookkeeping event. This could be a sale, refund, payment to a vendor, and so on.
2. Record Transactions in a Journal: Next come recording of transactions using journal entries. The entries are based on the
receipt of an invoice, recognition of a sale, or completion of other economic events.
3. Posting: Once a transaction is recorded as a journal entry, it should post to an account in the general ledger. The general
ledger provides a breakdown of all accounting activities by account.
4. Unadjusted Trial Balance: After the company posts journal entries to individual general ledger accounts, an unadjusted
trial balance is prepared. The trial balance ensures that total debits equal the total credits in the financial records.
5. Worksheet: Analyzing a worksheet and identifying adjusting entries make up the fifth step in the cycle. A worksheet is
created and used to ensure that debits and credits are equal. If there are discrepancies then adjustments will need to be
made.
6. Adjusting Journal Entries: At the end of the period, adjusting entries are made. These are the result of corrections made
on the worksheet and the results from the passage of time. For example, an adjusting entry may accrue interest revenue that
has been earned based on the passage of time.
7. Financial Statements: Upon the posting of adjusting entries, a company prepares an adjusted trial balance followed by the
actual formalized financial statements.
8. Closing the Books: An entity finalizes temporary accounts, revenues, and expenses, at the end of the period using closing
entries. These closing entries include transferring net income into retained earnings. Finally, a company prepares the post-
closing trial balance to ensure debits and credits match and the cycle can begin anew.
Branches of accounting

1. Financial accounting
2. Cost accounting
3. Management accounting
Accounting and Accountancy
Basis of Accounting Accountancy
Distinction
1. Meaning It is concerned with recording, It is a body of knowledge prescribing
classification and summarizing of certain rules or principles to be
transactions. observed while recording,
classification and summarizing of
transactions.
2. Scope It is narrow in scope. It is wider in scope.
3. Relation It depends in book- keeping. It depends on both book-keeping and
accounting.
4. Function Its main function is to ascertain the net It includes the decision-making
results and the financial position of the function on the basis of information
business and to communicate them to provided by book-keeping and
interested parties. accounting.
Transaction
An event involving some value between two or more entities. It can be a purchase of
goods, receipt of money, payment to a creditor, incurring expenses, etc. It can be a
cash transaction or a credit transaction.
Account
➢In actual practice, the individual transactions of like nature
are recorded, added and subtracted at one place. Such place is
customarily termed as an ‘Account’.
➢An account is a Ledger record in a summarized form, of all
the transactions that have taken place with the particular
person or things specified.
➢All accounts are divided into two parts:
1. Left side of an account is called Debit side
2. Right side of an account is called Credit side
Classification of accounts

Classification on accounts

Personal Accounts Impersonal Accounts

Real Accounts Nominal Accounts

Classification of accounts
✓ Personal accounts – the accounts which relate to an individual, firm, company or
an institution.
✓Example: Bank account, Capital Account, Drawings account, etc.
✓ Real accounts- the accounts of all those things whose value are measured in
terms of money and which are properties of the business (assets).
✓Example: Cash account, furniture account, goodwill account, etc.
✓ Nominal accounts- the accounts which includes the accounts of all expenses or
loss and incomes or gains.
✓Example: Salaries paid, rent paid, bad debts, etc.
Note: When any word (as a prefix or as a suffix ) is added to a nominal account, it becomes a personal account
Classification of Personal accounts

Personal Accounts

Artificial personal Representative personal

Natural personal accounts
accounts accounts
Classification of personal accounts
1. Natural personal accounts – accounts of human beings.

Example: drawings account, debtors account, creditors account, Ram’s account.

2. Artificial personal accounts- accounts do not have physical existence as

human beings.

Example: any firm’s account, any institution’s account, etc.

3. Representative personal accounts- accounts represents a group of persons.

Example: salaries outstanding account, prepaid insurance account, etc.

Classification of Real accounts

Real Accounts

Tangible Real Accounts Intangible Real Accounts

Classification of Real accounts

1. Tangible real accounts – accounts of those things which can be

touched, felt, measured, purchased, sold, etc.
Example: Cash account, furniture account, land account, etc.

2. Intangible real accounts – accounts which cannot be touched, but

their value can be measured in terms of money.
Example : goodwill account, copyrights account, patents account, etc.
Golden rules of debit and credit
Types of account Golden rules
1. Personal account Debit - the receiver
Credit - the giver
2. Real account Debit - what comes in
Credit – what goes out
3. Nominal account Debit – the expenses or losses
Credit – the incomes or gains
Rules of Debit and Credit

Assets Liabilities
Increase Decrease Increase Decrease
Debit Credit Credit Debit

Expenses/Loses Capital
Increase Decrease Increase Decrease
Debit Credit Credit Debit

Revenue/Gain
Increase Decrease
Credit Debit
Double Entry system

Every business transaction has a two- fold effect and that it affects two
accounts in opposite directions and if a complete record were to be
made of each transaction, it would be necessary to debit one account
and credit another account. It is this recording of the two-fold effect of
every transaction that has given rise to the term double entry system.
Principles or characteristics of double entry system

1. Every business transaction affects two accounts

2. Recording of both personal and impersonal aspects.

3. Recording is made according to certain specified rules.

4. Preparation of trail balance

Stages of double Entry System

1. Original Record (Journal)

2. Classification (Ledger)

3. Summary ( Trial Balance)

Advantages of Double Entry System
1. Scientific system
2. Complete record of every transaction
3. Preparation of trail balance
4. Preparation of trading and P&L Account
5. Knowledge of financial position of the business
6. Legal approval
7. Helps management in decision making
Journal- Books of original entry
✓It is a book of original entry in which the transactions are recorded
first of all, as and when they take place.
✓Transactions are originally recorded in a chronological (day-to-day)
order.
✓Journal is sub-divided into a number of Sub-Journals known as special
purpose subsidiary books.
✓The subsidiary books may be
1. Cash Book 5. Sales Return Book

2. Purchases Book 6. Bills Receivable Book

3. Sales Book 7. Bills Payable Book

4. Purchases Return Book 8. Journal Paper

Features or characteristics of a journal

i. Journal is a book in which the transactions are recorded for the first
time, as and when they take place.
ii. A journal is only a book of primary entry.
iii. A journal is a daily accounting record.
iv. It maintains the identity of each transactions and provides a
complete picture of the same in one entry.
v. Each entry in the journal is followed by a brief explanation of the
transaction which is called ‘Narration’.
vi. In journal, transactions are recorded in a chronological order.
Functions of a journal
i. To keep a chorological record of all transactions.

ii. To analyze each transactions into debit and credit aspects by using
double entry system of book keeping.

iii. To provide a basis for posting into ledger.

iv. To maintain the identity of each transaction by keeping a complete

record of each transaction qt one place on a permanent basis.
Format of a journal
JOURNAL OF ………..
Date Particulars Ledger Amount Amount
Folio Dr. Cr.
₹ ₹
(1) (2) (3) (4) (5)

1. Date : Date of transaction is entered.

2. Particulars: The name of the account to be debited is written first and the word ‘Dr’ is
also written towards the end of the column. In the second line, the name of the account
to be credited is written. The credit account starts with the word ‘To’.
Narration: a brief explanation of the transaction together with necessary details.
3. Ledger Folio: The page number or folio number of the ledger account where the
posting has been made from the journal is recorded in the L.F. Column.
4. Amount Dr. : Amount of the account being debited is written.
5. Amount Cr. : Amount of the account being credited is written.
 Rules of Journalising
1. Personal accounts
E.g.,
a. paid ₹20,000/- to Mr. ABC
Particulars Amount Credit
Dr. Cr.
Mr. ABC Dr 20,000
To Cash A/c 20,000
Narration (Cash paid to Mr. ABC)

b. Received ₹ 50,000/- from Mr. XYZ

Particulars Amount Credit
Dr. Cr.
Cash A/c Dr 50,000
To Mr. XYZ 50,000
(Cash received from Mr. XYZ)
Rules of Journalising
2. Real Accounts
E.g., a. Machinery bought for ₹ 5,00,000/- cash.
Particulars Amount Credit
Dr. Cr.
Machinery A/c Dr 5,00,000
To Cash A/c 5,00,000
(Machine purchased for cash)

b. Sold Goods to Mr. XYZ for ₹ 4,000/- cash

Particulars Amount Credit
Dr. Cr.
Cash A/c Dr 4,000
To Sales A/c 4,000
(Goods sold for cash)
Rules of Journalising
3. Nominal Accounts
E.g., a. ₹ 20,000/- paid for salary
Particulars Amount Credit
Dr. Cr.
Salary A/c Dr 20,000
To Cash A/c 20,000
(Salary paid)

b. ₹ 3000/- received for commission

Particulars Amount Credit
Dr. Cr.
Cash A/c Dr 3,000
To Commission A/c 3,000
(Commission received)
Important considerations
1. If, in the transaction relating to purchase or sale of goods, the name
of the purchaser or seller is not given, it is considered as a cash
transaction.
Example: ‘Goods sold for ₹ 50,000.’
2. If, in the transaction relating to purchase or sale of goods, the name
of the purchaser or seller is given along with cash, it is considered as
a cash transaction.
Example: ‘Goods sold to XYZ for cash.’
3. If, in the transaction relating to purchase or sale of goods, the name
of the purchaser or seller is given and it is not stated whether it is a
cash or credit transaction, it is considered to be a credit transaction.
Example: ‘Goods sold to ABC’
Illustration 1
Enter the following transactions in the Journal of M/s XYZ Stores.

2021 Amount (₹)

Feb. 1 M/s XYZ Stores started business with cash 50,000
3 Purchased goods for cash 20,000
5 Purchased goods from Mr. A for cash 12,000
8 Purchased goods from Mr. B 8,000
10 Sold goods for cash 5,000
11 Sold goods to Mrs. C for cash 10,000
13 Sold goods to Mr. D 7,000
20 Withdrew cash from office for personal use 2,000
27 Paid wages 1,500
28 Paid rent 6,500
28 Paid salary to Mr. Q 3,000
28 Received commission 4,000
Illustration 1
Solution Journal of M/s XYZ Stores
Date Particulars L.F. Amount Amount
Dr. Cr.
₹ ₹
Feb 1’21 Cash A/c Dr. 50,000
To Capital A/c 50,000
(Being Cash brought into the business by M/s XYZ Stores as capital)

Feb 3’21 Purchase A/c Dr. 20,000

To Cash A/c 20,000
(Being Goods purchased for cash)
Feb 5’21 Purchase A/c Dr. 12,000
To Cash A/c 12,000
(Being Goods purchased for cash)
Total c/f 82,000 82,000
Illustration 1
Solution Journal of M/s XYZ Stores
Date Particulars L. Amount Amount
F. Dr. Cr.
₹ ₹
Total b/f 82,000 82,000
Feb 8’21 Purchase A/c Dr. 8,000
To Mr. B 8,000
( Being Goods purchased from Mr. B on credit )
Feb 10’21 Cash A/c Dr. 5,000
To Sales A/c 5,000
(Being Sold goods for cash)
Feb 11’21 Cash A/c Dr. 10,000
To Sales A/c 10,000
(Being Sold goods for cash)
Total c/f 1,05,000 1,05,000
Illustration 1
Solution Journal of M/s XYZ Stores
Date Particulars L.F Amount Amount
. Dr. Cr.
₹ ₹
Total b/f 1,05,000 1,05,000
Feb 13’21 Mr. D Dr. 7,000
To Sales A/c 7,000
( Being Goods sold to Mr. D on credit )
Feb 20’21 Drawings A/c Dr. 2,000
To Cash A/c 2,000
( Being the Amount withdrawn for personal use)
Feb 27’21 Wages A/c Dr. 1,500
To Cash A/c 1,500
(Being the Wages Paid)
Total c/f 1,15,500 1,15,500
Illustration 1
Solution Journal of M/s XYZ Stores
Date Particulars L.F. Amount Amount
Dr. Cr.
₹ ₹
Total b/f 1,15,500 1,15,500
Feb 28’21 Rent A/c Dr. 6,500
To Cash A/c 6,500
( Being the Paid Rent)
Feb 28’21 Salary A/c Dr. 3,000
To Cash A/c 3,000
(Being The Salary Paid)
Feb 28’21 Cash A/c Dr. 4,000
To Commission Received A/c 4,000
(Being Commission received)
Total ₹ 1,29,000 1,29,000
Ledger

✓According to L.C. Cropper, “The book which contains a classified and

permanent record of all the transactions of a business is called the Ledger.”

✓A ledger in accounting refers to a book that contains different accounts

where records of transactions pertaining to a specific account is stored.

✓It is also known as the book of final entry or principal book.

Distinction between ‘Books of Original Entry’ and ‘Ledger’
Journal or Books of Original Entry Ledger
1 Transactions are entered in a chorological Transactions are recorded in analytical order, i.e.,
order, as and when they take place all the transactions pertaining to a particular
account are contained at one place in the Ledger.

2 Full details of a transaction are narration are Full details of a transactions are not recorded in
recorded in these books. the ledger.
3 Final Accounts cannot be prepared with the Final accounts can be prepared with the help of
help of books of original entry. Ledger balances.
4 The process of recording entries in the books The process of recording entries in the ledger is
of original entry is called ‘journalizing’ called ‘posting’.
5 Page number of the ledger, i.e., Ledger Folio Page number of the Journal or subsidiary books,
(L.F.) is written in these books. i.e., Journal Folio (J.F) is written in Ledger

6 Accuracy of these books cannot be tested. Accuracy of the ledger accounts is tested by
preparing a trail Balance
Format of ledger
Dr. Name of Account Cr.
Date Particulars J.F. Amount Date Particulars J.F. Amount
₹ ₹
1 2 3 4 1 2 3 4

As, shown above, there are four columns on each side of an account-
1. Date:- The date of the transaction is recorded in this column.
2. Particulars:- Each transaction affects two accounts. The name of the other account which is
affected by the transactions is written in this column.
3. Journal Folio or J.F. :- in this column, the page number of the Journal or subsidiary book from
which that particular entry is transferred, is entered.
4. Amount :- the amount pertaining to this account is entered in this column.
Rules of posting

1. All transactions relating to an account should be entered at one

place. In other words, two separate accounts should not be opened
for posting transaction relating to the same account.
2. 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.
3. 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.
4. 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.
Example : On 1st Jan 2021, sold goods for cash ₹ 10,000. Pass journal entry and post it into ledger.
Solution:
Journal entry:
Date Particulars Amount ₹ Credit ₹
Dr. Cr.
1/01/21 Cash A/c Dr 10,000
To Sales A/c 10,000
(Being Goods sold for cash)
Ledger account:
Dr. Cash Account Cr.
Date Particulars J.F. Amount Date Particulars J.F. Amount
₹ ₹
1/01/21 To Sales A/c 10,000

Dr. Sales Account Cr.

Date Particulars J.F. Amount Date Particulars J.F. Amount
₹ ₹
1/01/21 By Cash A/c 10,000
Closing and balancing of accounts
1. Closing of Personal Accounts
If a personal account shows a debit balance, it indicates the amount
owing from him. (↓)
If a personal account shows a credit balance, it indicates the amount
owing to him. (↑)
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 other side by witting the words ‘To balance
b/d’.
2. Closing of Real Accounts
Same as personal accounts.
3. Closing of Nominal Accounts
These accounts does not require balancing, as the main purpose of
opening nominal account is to ascertain the net profit or loss of the firm.
Trial Balance
➢Trial balance is the list of debit and credit balances, taken out from ledger. It
also includes the balances of cash and bank taken out from the cash book.

➢The statement prepared with the help of ledger balances, at the end of
financial year (or at any other date) to find out whether debit total agrees
with credit total is called Trail balance.

➢Account which shows no balance, i.e., whose debit and credit totals are
equal, is not entered in the trail balance.

➢If the total of debit side of trial balance equals to that of credit side, it is
proved that books are at least arithmetically correct and there are no errors
in the posting and balancing the ledger accounts.
Format
Trail Balance
As at ……..
Name of Accounts L.F. Balance Dr. Balance Cr.
(₹) (₹)
Points for preparing a Trail Balance: -
1. All Assets have debit balances. Their Balances should be shown on the debit
side of trail balance.
2. All liabilities have credit balances. Their balances should be shown on the credit
side of trail balance.
3. Capital account shows a credit balance.
4. Drawings account shows a debit balance.
5. All expenses and losses show debit balances.
6. All incomes and profits show credit balances.
7. Purchases account always shows a debit balance.
8. Purchases return account always shows a credit balance.
9. Sales account always shows a credit balance.
10. Sales return account always shows a debit balance.
Illustration
Prepare a Trail Balance from the following balances of M/s Dutta as at 31st March
2021: -

Name of Accounts ₹ Name of Accounts ₹

Opening Stock 20,000 Discount (Cr) 710
Purchases 85,000 Furniture 6,000
Purchases Returns 5,000 Machinery 62,000
Sales 1,60,000 Debtors 36,000
Sales Return 6,200 Creditors 12,750
Rent 1,200 Bills Receivable 4,600
Salaries 5,700 Bill Payable 2,500
Advertisement 880 Cash In hand 11,220
Commission Received 1,440 Bank Overdraft 10,000
Capital 50,000 Loan 6,000
Drawings 7,800 Interest on Overdraft 1,800
Solution
Trail Balance
As at 31st March 2021
Name of Accounts L.F. Balance Dr. (₹) Balance Cr. (₹)
Opening Stock 20,000
Purchases 85,000
Purchases Returns 5,000
Sales 1,60,000
Sales Return 6,200
Rent 1,200
Salaries 5,700
Advertisement 880
Commission Received 1,440
Capital 50,000
Drawings 7,800
Discount (Cr) 710
Furniture 6,000
Solution
Trail Balance
As at 31st March 2021
Name of Accounts L.F. Balance Dr. (₹) Balance Cr. (₹)
Machinery 62,000
Debtors 36,000
Creditors 12,750
Bills Receivable 4,600
Bill Payable 2,500
Cash In hand 11,220
Bank Overdraft 10,000
Loan 6,000
Interest on Overdraft 1,800
Total 2,48,400 2,48,400
Illustration
Pass journal entries for the following transactions and post them into ledger and prepare trial balance

2021 Amount (₹)

Jan 1 Ram & Shyam Constructions commenced business with cash 2,00,000
Jan 3 Purchased office furniture for cash 20,000
Jan 5 Purchased goods for cash 50,000
Jan 8 Purchased goods - from Vishal Trading Co. 25,000
from Mohan Steels 16,000
Jan 10 Returned goods to Vishal Trading Co. 5,000
Jan 14 Paid cash to Vishal Trading Co. in full settlement of their account, after deducting
5% cash discount
Jan 15 Sold goods for cash 40,000
Jan 18 Sold goods to Hero Limited, less 10% Trade discount 30,000
Jan 20 Ram & Shyam Constructions withdrew from business for personal use - Cash 10,000
Goods 4,000
Jan 21 Paid to Mohan Steels 7,800
Discount received 200
Jan 22 Received from Hero Limited 8,850
Discount allowed 150
Jan 25 Sold Goods to Hanjraj Ltd. For cash 12,000
Jan 28 Purchased goods from Pawan Brothers 24,000
Jan 31 Paid for Rent ₹ 2,000 and Salaries ₹4,000
Solution:
Journal of Ram & Shyam Constructions
Date Particulars L.F. Amount (Dr) Amount (Cr)
₹ ₹
Jan 1 Cash A/c Dr. 2,00,000
2021 To Capital A/c 2,00,000
(Stated business with cash)
Jan 3 Furniture A/c Dr. 20,000
To Cash A/c 20,000
(purchased furniture for cash)
Jan 5 Purchases A/c Dr. 50,000
To Cash A/c 50,000
(Purchased goods for cash)
Jan 8 Purchases A/c Dr. 41,000
To Vishal Trading Co. 25,000
To Mohan Steels 16,000
(Goods purchased on credit)
C/F 3,11,000 3,11,000
 Journal of Ram & Shyam Constructions
Date Particulars L.F. Amount (Dr) Amount (Cr)
₹ ₹
B/F 3,11,000 3,11,000
Jan 10 Vishal Trading Co. Dr. 5,000
To Purchases Return A/c 5,000
(Goods returned )
Jan 14 Vishal Trading Co. Dr. 20,000
To Cash A/c 19,000
To Discount Received A/c 1,000
(Cash paid and 5% discount received)
Jan 15 Cash A/c Dr. 40,000
To Sales A/c 40,000
(Sold goods for cash)
Jan 18 Hero Limited Dr. 27,000
To Sales A/c 27,000
(10% discount on goods bought)
C/F 4,03,000 4,03,000
 Journal of Ram & Shyam Constructions
Date Particulars L.F. Amount (Dr) Amount (Cr)
₹ ₹
B/F 4,03,000 4,03,000
Jan 20 Drawings A/c Dr. 14,000
To Cash A/c 10,000
To Purchases A/c 4,000
(Cash and Goods withdrew by owners )
Jan 21 Mohan Steels Dr. 8,000
To Cash A/c 7,800
To Discount Received A/c 200
(Cash paid and 5% discount received)
Jan 22 Cash A/c Dr. 8,850
Discount allowed A/c Dr. 150
To Hero Limited 9,000
(Cash received and discount allowed)
Jan 25 Cash A/c Dr. 12,000
To Sales A/c 12,000
(Sold goods for Cash)
C/F 4,46,000 4,46,000
 Journal of Ram & Shyam Constructions
Date Particulars L.F. Amount (Dr) Amount (Cr)
₹ ₹
B/F 4,46,000 4,46,000
Jan 28 Purchases A/c Dr. 24,000
To Pawan brothers 24,000
(Bought goods on credit )
Jan 31 Rent A/c Dr. 2,000
Salaries A/c 4,000
To Cash A/c 6,000
(Expenses paid in cash)
Total 4,76,000 4,76,000
 Ledger of Ram & Shyam Constructions
Dr. Cash Account Cr.
Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 1 2021 To Capital A/c 2,00,000 Jan 3 By furniture A/c 20,000
2021
Jan 15 2021 To Sales A/c 40,000 Jan 5 By Purchases A/c 50,000
2021
Jan 22 2021 To Hero Limited 8,850 Jan 14 By Vishal Trading Co. 19,000
2021
Jan 25 2021 To Sales A/c 12,000 Jan 20 By Drawing A/c 10,000
2021
Jan 21 By Mohan Steels 7,800
2021
Jan 31 By Rent A/c 2,000
2021
Jan 31 By Salaries A/c 4,000
2021
Jan 31 By balance C/d 1,48,050
2021
2,60,850 2,60,850
Feb 1 2021 To Balance b/d 1,48,050
Dr. Capital Account Cr.
Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 31 2021 To balance c/d 2,00,000 Jan 1 2021 By Cash A/c 2,00,000
Feb 1 2021 By balance b/d 2,00,000

Dr. Furniture Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 3 2021 To Cash A/c 20,000 Jan 31 2021 By balance c/d 20,000
Feb 1 2021 To Balance b/d 20,000

Dr. Purchases Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 5 2021 To Cash A/c 50,000 Jan 20 2021 By Drawings A/c 4,000
Jan 8 2021 To Vishal Trading Co. 25,000
Jan 8 2021 To Mohan Steels 16,000
Jan 28 2021 To Pawan Brothers 24,000
1,15,000
Dr. Vishal Trading Co. Cr.
Date Particulars J.F. Amount Date Particulars J.F. Amount (₹)
(₹)
Jan 10 2021 To Purchases Return A/c 5,000 Jan 8 2021 By Purchases A/c 25,000
Jan 14 2021 To Cash A/c 19,000
Jan 14 2021 To Discount Received 1,000
A/c
25,000 25,000

Dr. Mohan Steels Cr.

Date Particulars J.F. Amount Date Particulars J.F. Amount (₹)
(₹)
Jan 14 2021 To Cash A/c 7,800 Jan 8 2021 By Purchases A/c 16,000
Jan 14 2021 To Discount Received 200
A/c
Jan 31 2021 To balance c/d 8,000
16,000 16,000
Feb 1 2021 By balance b/d 8,000
Dr. Purchase Return Account Cr.
Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 10 2021 By Vishal Trading Co. 5,000

Dr. Discount Received Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 14 2021 By Vishal Trading Co. 1,000
Jan 21 2021 By Mohan Steel 200

Dr. Sales Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 15 2021 By Cash A/c 40,000
Jan 18 2021 By Hero Limited 27,000
Jan 25 2021 By Cash A/c 12,000
Dr. Hero Limited Cr.
Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 18 2021 To Sales A/c 27,000 Jan 22 2021 By Cash A/c 8,500
Jan 22 2021 By Discount Allowed A/c 150
Jan 31 2021 By balance c/d 18,000
27,000 27,000
Feb 1 2021 To balance b/d 18,000

Dr. Drawings account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 20 2021 To Cash A/c 10,000 Jan 31 2021 By balance c/d 14,000
Jan 20 2021 To Purchases A/c 4,000
14,000 14,000
Feb 1 2021 To balance b/d 14,000

Dr. Discount Allowed Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 22 2021 To Hero Limited 150
Dr. Pawan Brothers Cr.
Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 31 2021 By balance c/d 24,000 Jan 28 2021 By Purchases A/c 24,000
Feb 1 2021 By balance b/d 24,000

Dr. Rent Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 31 2021 To Cash A/c 2,000

Dr. Salaries Account Cr.

Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹)
Jan 31 2021 To Cash A/c 4,000
 TRIAL BALANCE OF RAM & SHYAM CONSTRUCTIONS

As on 31st Jam 2021

Name of Accounts L.F. Dr. Balances (₹) Cr. Balances (₹)

Capital A/c 2,00,000

Mohan Steels 8,000

Hero Limited 18,000

Drawings A/c 14,000

Pawan Brothers 24,000

Cash A/c 1,48,050

Furniture A/c 20,000

Purchases A/c 1,11,000

Purchases return A/c 5,000

Sales A/c 79,000

Discount received A/c 1,200

Discount allowed A/c 150

Rent A/c 2,000

Salaries A/c 4,000

Total 3,17,200 3,17,200