Goods Purchased from Mohan

The goods purchased from Mohan amount to Rs 40,000. Out of this total amount, an immediate payment of Rs 40 was made by cheque.

Explanation

When goods are purchased from a supplier, it is important to keep a record of the transaction and the payment made. In this case, the goods were purchased from Mohan for a total amount of Rs 40,000. Let's break down the details:

1. Purchase Details:
- Goods purchased from Mohan
- Total amount: Rs 40,000

2. Payment Details:
- Payment made immediately
- Amount paid: Rs 40
- Payment method: Cheque

3. Importance of Recording:
Keeping a record of the purchase and payment is crucial for several reasons:
- Documentation: Having a record helps in maintaining proper documentation for future reference and auditing purposes.
- Legal Compliance: Accurate records ensure compliance with tax regulations and other legal requirements.
- Financial Analysis: The records can be used for financial analysis, such as tracking expenses and evaluating the profitability of the purchase.

4. Bookkeeping:
To record the purchase and payment, it is necessary to maintain proper books of accounts. This includes:
- Purchase Journal: The details of the purchase, such as the supplier's name, invoice number, and amount, are recorded in the purchase journal.
- Cash/Bank Book: The payment made by cheque is recorded in the cash/bank book, specifying the amount, cheque number, and date of payment. This helps in reconciling the bank statement later.

5. Accounting Treatment:
The purchase of goods is recorded as an expense in the books of accounts. The payment made by cheque reduces the cash/bank balance and increases the accounts payable. The accounting entry for this transaction would be as follows:
- Debit: Purchases (Expense) - Rs 40,000
- Credit: Cash/Bank - Rs 40
- Credit: Accounts Payable - Rs 39,960

Conclusion

In conclusion, the goods purchased from Mohan amounted to Rs 40,000, and an immediate payment of Rs 40 was made by cheque. It is important to maintain accurate records of such transactions for documentation, legal compliance, and financial analysis purposes. The purchase is recorded as an expense, and the payment by cheque is reflected in the cash/bank book and accounts payable.