A second hand motor car was purchased on credit from B Brothers for Rs...
A journal proper is the book of original entry in which only those entries are recorded that cannot be recorded in the special journal. It is also termed as a General Journal. When the journal is divided into various subsidiary books, it remains only a residuary book in which only those transactions are recorded that cannot be recorded in any other subsidiary book. In such a case, the journal is called as Journal proper. Purchase of asset on credit can neither be recorded in the cash book or the purchase book because cash book only records cash transactions and purchase book only records the credit purchase of goods. Thus purchase and sale or return of purchased or sale asset on credit is recorded in journal proper. In our question a second hand motor car is purchased on credit which is fixed asset hence, it will be recorded in Journal proper.
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A second hand motor car was purchased on credit from B Brothers for Rs...
Journal Proper (General Journal)
The Journal Proper, also known as the General Journal, is a book of original entry where all transactions that do not have specific journals are recorded. It is used to record non-routine or infrequent transactions that cannot be recorded in any other specialized journal such as the Sales Book, Cash Book, or Purchase Book.
In this case, the purchase of a second-hand motor car on credit from B Brothers for Rs. 10,000 is a transaction that does not fit into any specialized journal. Therefore, it needs to be recorded in the Journal Proper.
Explanation of the entry in Journal Proper:
- Date: The date of the transaction is recorded.
- Particulars: The names of the accounts involved in the transaction are recorded. In this case, "Purchased Second-hand Motor Car" would be recorded as the debit account, and "B Brothers" would be recorded as the credit account.
- Ledger Folio: The page numbers of the respective accounts in the General Ledger are recorded for reference.
- Debit: The amount of Rs. 10,000 is recorded as a debit to the "Purchased Second-hand Motor Car" account. This represents the increase in the value of the asset.
- Credit: The same amount of Rs. 10,000 is recorded as a credit to the "B Brothers" account. This represents the increase in the liability as the car was purchased on credit.
- Narration: A brief description of the transaction is recorded. In this case, it could be "Purchased a second-hand motor car on credit from B Brothers".
The Journal Proper serves as a chronological record of all non-routine transactions, providing a complete and accurate account of all financial activities of the business. It is important to maintain the Journal Proper to ensure proper bookkeeping and facilitate the preparation of financial statements and analysis.
A second hand motor car was purchased on credit from B Brothers for Rs...
It is not purchases of goods but purchase of asset. these purchases are not maintained in separate book. so they should be entered in journal proper.
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