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On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ?
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On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST an...
Journal Entries in the books of A:
1. On 1st April, 2022, when goods were sold to B:
- Sales A/C Dr. ₹ 5,000
- CGST A/C Dr. ₹ 300
- SGST A/C Dr. ₹ 300
- To B A/C ₹ 5,600
(Being goods sold to B along with CGST and SGST)
2. On the due date when the bill is honored by B:
- B A/C Dr. ₹ 5,600
- To Bills Receivable A/C ₹ 5,600
(Being the bill honored by B)
Journal Entries in the books of B:
1. On 1st April, 2022, when goods were purchased from A:
- Purchases A/C Dr. ₹ 5,000
- CGST A/C Dr. ₹ 300
- SGST A/C Dr. ₹ 300
- To A A/C ₹ 5,600
(Being goods purchased from A along with CGST and SGST)
2. On the due date when the bill is honored to A:
- Bills Payable A/C Dr. ₹ 5,600
- To A A/C ₹ 5,600
(Being the bill honored to A)
Explanation:
- A sold goods to B amounting to ₹ 5,000 along with CGST and SGST @ 6% each. This means the CGST and SGST amounts to ₹ 300 each. Therefore, the total amount payable by B is ₹ 5,000 + ₹ 300 + ₹ 300 = ₹ 5,600.
- In the books of A, the sales account is debited with ₹ 5,000, and the CGST and SGST accounts are debited with ₹ 300 each. The total amount of ₹ 5,600 is credited to B's account. This entry records the sale of goods along with the CGST and SGST.
- In the books of B, the purchases account is debited with ₹ 5,000, and the CGST and SGST accounts are debited with ₹ 300 each. The total amount of ₹ 5,600 is credited to A's account. This entry records the purchase of goods along with the CGST and SGST.
- A bill is drawn by A on B for the amount of ₹ 5,600, payable after three months. This bill is an acknowledgement of the debt owed by B to A.
- On the due date, when the bill is honored by B, B's account is debited with ₹ 5,600, and the bills receivable account is credited with ₹ 5,600 in A's books. This entry reflects the payment made by B to honor the bill.
- Similarly, in B's books, the bills payable account is debited with ₹ 5,600, and A's account is credited with ₹ 5,600. This entry reflects the payment made by B to A to settle the bill.
- The journal entries in the books of both parties accurately record the sale, purchase, and subsequent payment through the bill.
1. On 1st April, 2022, when goods were sold to B:
- Sales A/C Dr. ₹ 5,000
- CGST A/C Dr. ₹ 300
- SGST A/C Dr. ₹ 300
- To B A/C ₹ 5,600
(Being goods sold to B along with CGST and SGST)
2. On the due date when the bill is honored by B:
- B A/C Dr. ₹ 5,600
- To Bills Receivable A/C ₹ 5,600
(Being the bill honored by B)
Journal Entries in the books of B:
1. On 1st April, 2022, when goods were purchased from A:
- Purchases A/C Dr. ₹ 5,000
- CGST A/C Dr. ₹ 300
- SGST A/C Dr. ₹ 300
- To A A/C ₹ 5,600
(Being goods purchased from A along with CGST and SGST)
2. On the due date when the bill is honored to A:
- Bills Payable A/C Dr. ₹ 5,600
- To A A/C ₹ 5,600
(Being the bill honored to A)
Explanation:
- A sold goods to B amounting to ₹ 5,000 along with CGST and SGST @ 6% each. This means the CGST and SGST amounts to ₹ 300 each. Therefore, the total amount payable by B is ₹ 5,000 + ₹ 300 + ₹ 300 = ₹ 5,600.
- In the books of A, the sales account is debited with ₹ 5,000, and the CGST and SGST accounts are debited with ₹ 300 each. The total amount of ₹ 5,600 is credited to B's account. This entry records the sale of goods along with the CGST and SGST.
- In the books of B, the purchases account is debited with ₹ 5,000, and the CGST and SGST accounts are debited with ₹ 300 each. The total amount of ₹ 5,600 is credited to A's account. This entry records the purchase of goods along with the CGST and SGST.
- A bill is drawn by A on B for the amount of ₹ 5,600, payable after three months. This bill is an acknowledgement of the debt owed by B to A.
- On the due date, when the bill is honored by B, B's account is debited with ₹ 5,600, and the bills receivable account is credited with ₹ 5,600 in A's books. This entry reflects the payment made by B to honor the bill.
- Similarly, in B's books, the bills payable account is debited with ₹ 5,600, and A's account is credited with ₹ 5,600. This entry reflects the payment made by B to A to settle the bill.
- The journal entries in the books of both parties accurately record the sale, purchase, and subsequent payment through the bill.
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On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ?
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On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ?.
On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st April, 2022 A sold goods to B amounting to ₹ 5,000 plus CGST and SGST @ 6\% each on the same day B accepted a bill drawn by A payable after three months. On the due date the bill is duly honoured by B. Give journal entries in the books of both the parties ?.
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