Use of Modern Approach & Super 7 Questions & Answers - Books of Original Entry Commerce Notes | EduRev

Crash Course of Accountancy - Class 11

Created by: Nipuns Institute

Commerce : Use of Modern Approach & Super 7 Questions & Answers - Books of Original Entry Commerce Notes | EduRev

 Page 1


 
 
76 
 
   
           
       
         
 
 
 
  
         
       
          
 
 
  
       
           
       
 
 
 
 
Use  of modern approach 
You are required to give (a) Journal Entries, (b) Nature of Account (Whether Asset, Liability, Capital, Expense, or Revenue), 
(c) Nature of change, and (d) Appropriate; rule for recording the change for the following transactions; 
1.  Nitin invested Rs.5,00,000 cash in the business.  
2.  Purchased building for Rs.2,50,000 in cash.  
3.  Purchased merchandise (goods) on account for Rs.50,000.  
4.  Sold merchandise for cash Rs.75,000.  
5.  Nitin withdrew cash Rs.12,500 for personal use.  
6.  Paid Rent Rs.2,000; Salary Rs.4,000.  
7.  Cash sales Rs.10,000.  
8.  Cash deposited in bank Rs.20,000.  
Solution:  
 
 
JOURNAL ENTRIES 
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) Nature  
of  
Account 
Nature  
of  
Change 
Appropriate Rule 
1 Cash A/c ...Dr.  
 To Capital A/c  
(Being the amount 
invested in business) 
 5,00,000  
5,00,000 
Asset 
Capital 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in capital in 
credited. 
2. Building A/c  ...Dr.  
 To Cash A/c  
(Being the building 
purchased for cash) 
 2,50,000  
2,50,000 
Asset  
Asset 
Increase  
Decrease 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
3. Purchases A/c ...Dr.  
 To Supplier 
(Party)  
(Being the goods 
bought on credit) 
 50,000  
50,000 
Expenses  
Liability 
Increase  
Increase 
Increase in expense is 
debited.  
Increase in liability is 
credited. 
Page 2


 
 
76 
 
   
           
       
         
 
 
 
  
         
       
          
 
 
  
       
           
       
 
 
 
 
Use  of modern approach 
You are required to give (a) Journal Entries, (b) Nature of Account (Whether Asset, Liability, Capital, Expense, or Revenue), 
(c) Nature of change, and (d) Appropriate; rule for recording the change for the following transactions; 
1.  Nitin invested Rs.5,00,000 cash in the business.  
2.  Purchased building for Rs.2,50,000 in cash.  
3.  Purchased merchandise (goods) on account for Rs.50,000.  
4.  Sold merchandise for cash Rs.75,000.  
5.  Nitin withdrew cash Rs.12,500 for personal use.  
6.  Paid Rent Rs.2,000; Salary Rs.4,000.  
7.  Cash sales Rs.10,000.  
8.  Cash deposited in bank Rs.20,000.  
Solution:  
 
 
JOURNAL ENTRIES 
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) Nature  
of  
Account 
Nature  
of  
Change 
Appropriate Rule 
1 Cash A/c ...Dr.  
 To Capital A/c  
(Being the amount 
invested in business) 
 5,00,000  
5,00,000 
Asset 
Capital 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in capital in 
credited. 
2. Building A/c  ...Dr.  
 To Cash A/c  
(Being the building 
purchased for cash) 
 2,50,000  
2,50,000 
Asset  
Asset 
Increase  
Decrease 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
3. Purchases A/c ...Dr.  
 To Supplier 
(Party)  
(Being the goods 
bought on credit) 
 50,000  
50,000 
Expenses  
Liability 
Increase  
Increase 
Increase in expense is 
debited.  
Increase in liability is 
credited. 
 
 
77 
4. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 75,000  
75,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
5. Drawings A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
withdrawn from 
business) 
 12,500  
12,500 
Capital  
Asset 
Decrease  
Decrease 
Decrease in capital is 
debited.  
Decrease in asset is 
credited. 
6. Rent A/c  ...Dr.  
Salary A/c  ...Dr.  
 To Cash A/c  
(Being the expenses 
paid for the month) 
 2,000  
4,000 
 
 
6,000 
Expenses  
Expenses 
Asset 
Increase  
Increase  
Decrease 
Increase in expenses is 
debited.  
Increase in expenses is 
debited 
Decrease in asset is 
credited. 
7. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 10,000  
10,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
8. Bank A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
deposited into bank) 
 20,000  
20,000 
Asset  
Asset 
Increase  
Increase 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
 
Example- Journalise the following transactions:  
(i)  Mr. Peter started business with cash Rs.1,00,000 and a building valued at Rs.5,00,000.  
(ii)  Purchased goods amounting to Rs.2,00,000 out of which goods of Rs.1,80,000 were purchased on credit from D. 
Lal.  
(iii)  Sold goods on credit to Ramesh Rs.1,60,000.  
(iv)  Received cheque for Rs.1,56,000 from Ramesh in full settlement of his account.  
(v)  Paid Rs.1,78,000 to D. Lal in full settlement of Rs.1,80,000 due to him by cheque.  
(vi)  An old machine with the book value of 80,000 is exchanged for a new machine of Rs.2,40,000. The old machine is 
valued at Rs.50,000 for exchange purposes by Machine Tools Ltd.  
(vii)  Purchased a machinery from Pele & Sons for Rs.50,000 on credit.  
(viii)  Depreciation of Rs.5,000 was provided on the machinery at the end of the year.  
(ix)  Paid income tax Rs.5,000.  
(x)  A cheque from a customer amounted to Rs.5,000 deposited in the bank was returned dishonoured. 
 
Solution:  
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) 
(i) Cash A/c      ...Dr.  
Building A/c     ...Dr.  
 To Capital A/c  
(Being the business started with cash Rs.1,00,000 and 
building of Rs.5,00,000) 
 1,00,000 
5,00,000 
 
 
6,00,000 
(ii) Purchases A/c     ...Dr.  
 To Cash A/c  
 To D. Lal  
(Being the goods purchased for cash Rs.20,000 and on 
credit from D. Lal for Rs.1,80,000) 
 2,00,000  
20,000 
1,80,000 
(iii) Ramesh      ...Dr.  
 To Sales A/c  
(Being the goods sold to Ramesh on credit for 
Rs.1,60,000) 
 1,60,000  
1,60,000 
(iv) Bank A/c*      ...Dr.   1,56,000  
Page 3


 
 
76 
 
   
           
       
         
 
 
 
  
         
       
          
 
 
  
       
           
       
 
 
 
 
Use  of modern approach 
You are required to give (a) Journal Entries, (b) Nature of Account (Whether Asset, Liability, Capital, Expense, or Revenue), 
(c) Nature of change, and (d) Appropriate; rule for recording the change for the following transactions; 
1.  Nitin invested Rs.5,00,000 cash in the business.  
2.  Purchased building for Rs.2,50,000 in cash.  
3.  Purchased merchandise (goods) on account for Rs.50,000.  
4.  Sold merchandise for cash Rs.75,000.  
5.  Nitin withdrew cash Rs.12,500 for personal use.  
6.  Paid Rent Rs.2,000; Salary Rs.4,000.  
7.  Cash sales Rs.10,000.  
8.  Cash deposited in bank Rs.20,000.  
Solution:  
 
 
JOURNAL ENTRIES 
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) Nature  
of  
Account 
Nature  
of  
Change 
Appropriate Rule 
1 Cash A/c ...Dr.  
 To Capital A/c  
(Being the amount 
invested in business) 
 5,00,000  
5,00,000 
Asset 
Capital 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in capital in 
credited. 
2. Building A/c  ...Dr.  
 To Cash A/c  
(Being the building 
purchased for cash) 
 2,50,000  
2,50,000 
Asset  
Asset 
Increase  
Decrease 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
3. Purchases A/c ...Dr.  
 To Supplier 
(Party)  
(Being the goods 
bought on credit) 
 50,000  
50,000 
Expenses  
Liability 
Increase  
Increase 
Increase in expense is 
debited.  
Increase in liability is 
credited. 
 
 
77 
4. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 75,000  
75,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
5. Drawings A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
withdrawn from 
business) 
 12,500  
12,500 
Capital  
Asset 
Decrease  
Decrease 
Decrease in capital is 
debited.  
Decrease in asset is 
credited. 
6. Rent A/c  ...Dr.  
Salary A/c  ...Dr.  
 To Cash A/c  
(Being the expenses 
paid for the month) 
 2,000  
4,000 
 
 
6,000 
Expenses  
Expenses 
Asset 
Increase  
Increase  
Decrease 
Increase in expenses is 
debited.  
Increase in expenses is 
debited 
Decrease in asset is 
credited. 
7. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 10,000  
10,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
8. Bank A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
deposited into bank) 
 20,000  
20,000 
Asset  
Asset 
Increase  
Increase 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
 
Example- Journalise the following transactions:  
(i)  Mr. Peter started business with cash Rs.1,00,000 and a building valued at Rs.5,00,000.  
(ii)  Purchased goods amounting to Rs.2,00,000 out of which goods of Rs.1,80,000 were purchased on credit from D. 
Lal.  
(iii)  Sold goods on credit to Ramesh Rs.1,60,000.  
(iv)  Received cheque for Rs.1,56,000 from Ramesh in full settlement of his account.  
(v)  Paid Rs.1,78,000 to D. Lal in full settlement of Rs.1,80,000 due to him by cheque.  
(vi)  An old machine with the book value of 80,000 is exchanged for a new machine of Rs.2,40,000. The old machine is 
valued at Rs.50,000 for exchange purposes by Machine Tools Ltd.  
(vii)  Purchased a machinery from Pele & Sons for Rs.50,000 on credit.  
(viii)  Depreciation of Rs.5,000 was provided on the machinery at the end of the year.  
(ix)  Paid income tax Rs.5,000.  
(x)  A cheque from a customer amounted to Rs.5,000 deposited in the bank was returned dishonoured. 
 
Solution:  
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) 
(i) Cash A/c      ...Dr.  
Building A/c     ...Dr.  
 To Capital A/c  
(Being the business started with cash Rs.1,00,000 and 
building of Rs.5,00,000) 
 1,00,000 
5,00,000 
 
 
6,00,000 
(ii) Purchases A/c     ...Dr.  
 To Cash A/c  
 To D. Lal  
(Being the goods purchased for cash Rs.20,000 and on 
credit from D. Lal for Rs.1,80,000) 
 2,00,000  
20,000 
1,80,000 
(iii) Ramesh      ...Dr.  
 To Sales A/c  
(Being the goods sold to Ramesh on credit for 
Rs.1,60,000) 
 1,60,000  
1,60,000 
(iv) Bank A/c*      ...Dr.   1,56,000  
 
 
78 
Discount Allowed A/c    ...Dr.  
 To Ramesh  
(Being the cheque received from Ramesh and allowed 
him discount of Rs.4,000) 
4,000  
1,60,000 
(v) D. Lal      ...Dr.  
 To Bank A/c  
 To Discount Received A/c  
(Being the cheque issued to D. Lal in full settlement of 
his dues Rs.1,80,000) 
 1,80,000  
1,78,000 
2,000 
(vi) (New) Machine A/c     ...Dr. 
Profit and Loss A/c  
(Rs.80,000 - Rs.50,000)   ...Dr.  
 To (Old) Machine A/c*  
 To Machine Tools Ltd.  
(Being the exchange of old machine worth Rs.80,000, 
valued at Rs.50,000 for a new machine of Rs.2,40,000) 
 2,40,000  
 
30,000 
 
(vii) Machinery A/c     ...Dr. 
 To Pale & Sons  
(Being the.purchase of machinery on credit from Pele & 
Sons 
 50,000  
50,000 
(viii) Depreciation A/c     ...Dr. 
 To Machinery A/c  
(Being the depreciation charged on machinery for the 
year) 
 5,000  
5,000 
(ix) Drawings A/c     ...Dr. 
 To Cash A/c  
(Being the income tax paid) 
 5,000  
5,000 
(x) Customer      ...Dr. 
 To Bank A/c  
(Being the cheque deposited into bank dishonoured) 
 5,000  
5,000 
 
 
 
 
Super 7 
Ques 1 journalize 
2015  
March 1 Bought goods from Vishawas worth ?1,00,000 at 20% trade discount and 5% cash 
discount. Paid full amount at the time of purchase itself. 
March 3 Bought goods from Trisha for ?2,00,000 at 5% cash discount and 10% trade  discount. 
Half of the amount paid by cheque at the time of purchase. 
March 4 Sold goods to Nupur for ?50,000 at terms 4% cash discount and 20% trade discount. Half 
the amount received by cash and balance half by cheque on the same day. 
March 6 Sold goods to Anuradha for ?1,00,000 on terms 10% trade discount and 5% cash 
discount if the payment is received within fifteen days. 80% payment is received on 
March 18
th
 by cheque 
March 20 Sold goods to Sudha for ?1,00,000 at 20% trade discount and 10% cash discount if the 
payment is received within ten days. She paid half the amount on March 26
th
 and 30% of 
the remainder on March 31
st
. 
 
 
 
 
 
 
 
 
Page 4


 
 
76 
 
   
           
       
         
 
 
 
  
         
       
          
 
 
  
       
           
       
 
 
 
 
Use  of modern approach 
You are required to give (a) Journal Entries, (b) Nature of Account (Whether Asset, Liability, Capital, Expense, or Revenue), 
(c) Nature of change, and (d) Appropriate; rule for recording the change for the following transactions; 
1.  Nitin invested Rs.5,00,000 cash in the business.  
2.  Purchased building for Rs.2,50,000 in cash.  
3.  Purchased merchandise (goods) on account for Rs.50,000.  
4.  Sold merchandise for cash Rs.75,000.  
5.  Nitin withdrew cash Rs.12,500 for personal use.  
6.  Paid Rent Rs.2,000; Salary Rs.4,000.  
7.  Cash sales Rs.10,000.  
8.  Cash deposited in bank Rs.20,000.  
Solution:  
 
 
JOURNAL ENTRIES 
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) Nature  
of  
Account 
Nature  
of  
Change 
Appropriate Rule 
1 Cash A/c ...Dr.  
 To Capital A/c  
(Being the amount 
invested in business) 
 5,00,000  
5,00,000 
Asset 
Capital 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in capital in 
credited. 
2. Building A/c  ...Dr.  
 To Cash A/c  
(Being the building 
purchased for cash) 
 2,50,000  
2,50,000 
Asset  
Asset 
Increase  
Decrease 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
3. Purchases A/c ...Dr.  
 To Supplier 
(Party)  
(Being the goods 
bought on credit) 
 50,000  
50,000 
Expenses  
Liability 
Increase  
Increase 
Increase in expense is 
debited.  
Increase in liability is 
credited. 
 
 
77 
4. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 75,000  
75,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
5. Drawings A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
withdrawn from 
business) 
 12,500  
12,500 
Capital  
Asset 
Decrease  
Decrease 
Decrease in capital is 
debited.  
Decrease in asset is 
credited. 
6. Rent A/c  ...Dr.  
Salary A/c  ...Dr.  
 To Cash A/c  
(Being the expenses 
paid for the month) 
 2,000  
4,000 
 
 
6,000 
Expenses  
Expenses 
Asset 
Increase  
Increase  
Decrease 
Increase in expenses is 
debited.  
Increase in expenses is 
debited 
Decrease in asset is 
credited. 
7. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 10,000  
10,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
8. Bank A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
deposited into bank) 
 20,000  
20,000 
Asset  
Asset 
Increase  
Increase 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
 
Example- Journalise the following transactions:  
(i)  Mr. Peter started business with cash Rs.1,00,000 and a building valued at Rs.5,00,000.  
(ii)  Purchased goods amounting to Rs.2,00,000 out of which goods of Rs.1,80,000 were purchased on credit from D. 
Lal.  
(iii)  Sold goods on credit to Ramesh Rs.1,60,000.  
(iv)  Received cheque for Rs.1,56,000 from Ramesh in full settlement of his account.  
(v)  Paid Rs.1,78,000 to D. Lal in full settlement of Rs.1,80,000 due to him by cheque.  
(vi)  An old machine with the book value of 80,000 is exchanged for a new machine of Rs.2,40,000. The old machine is 
valued at Rs.50,000 for exchange purposes by Machine Tools Ltd.  
(vii)  Purchased a machinery from Pele & Sons for Rs.50,000 on credit.  
(viii)  Depreciation of Rs.5,000 was provided on the machinery at the end of the year.  
(ix)  Paid income tax Rs.5,000.  
(x)  A cheque from a customer amounted to Rs.5,000 deposited in the bank was returned dishonoured. 
 
Solution:  
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) 
(i) Cash A/c      ...Dr.  
Building A/c     ...Dr.  
 To Capital A/c  
(Being the business started with cash Rs.1,00,000 and 
building of Rs.5,00,000) 
 1,00,000 
5,00,000 
 
 
6,00,000 
(ii) Purchases A/c     ...Dr.  
 To Cash A/c  
 To D. Lal  
(Being the goods purchased for cash Rs.20,000 and on 
credit from D. Lal for Rs.1,80,000) 
 2,00,000  
20,000 
1,80,000 
(iii) Ramesh      ...Dr.  
 To Sales A/c  
(Being the goods sold to Ramesh on credit for 
Rs.1,60,000) 
 1,60,000  
1,60,000 
(iv) Bank A/c*      ...Dr.   1,56,000  
 
 
78 
Discount Allowed A/c    ...Dr.  
 To Ramesh  
(Being the cheque received from Ramesh and allowed 
him discount of Rs.4,000) 
4,000  
1,60,000 
(v) D. Lal      ...Dr.  
 To Bank A/c  
 To Discount Received A/c  
(Being the cheque issued to D. Lal in full settlement of 
his dues Rs.1,80,000) 
 1,80,000  
1,78,000 
2,000 
(vi) (New) Machine A/c     ...Dr. 
Profit and Loss A/c  
(Rs.80,000 - Rs.50,000)   ...Dr.  
 To (Old) Machine A/c*  
 To Machine Tools Ltd.  
(Being the exchange of old machine worth Rs.80,000, 
valued at Rs.50,000 for a new machine of Rs.2,40,000) 
 2,40,000  
 
30,000 
 
(vii) Machinery A/c     ...Dr. 
 To Pale & Sons  
(Being the.purchase of machinery on credit from Pele & 
Sons 
 50,000  
50,000 
(viii) Depreciation A/c     ...Dr. 
 To Machinery A/c  
(Being the depreciation charged on machinery for the 
year) 
 5,000  
5,000 
(ix) Drawings A/c     ...Dr. 
 To Cash A/c  
(Being the income tax paid) 
 5,000  
5,000 
(x) Customer      ...Dr. 
 To Bank A/c  
(Being the cheque deposited into bank dishonoured) 
 5,000  
5,000 
 
 
 
 
Super 7 
Ques 1 journalize 
2015  
March 1 Bought goods from Vishawas worth ?1,00,000 at 20% trade discount and 5% cash 
discount. Paid full amount at the time of purchase itself. 
March 3 Bought goods from Trisha for ?2,00,000 at 5% cash discount and 10% trade  discount. 
Half of the amount paid by cheque at the time of purchase. 
March 4 Sold goods to Nupur for ?50,000 at terms 4% cash discount and 20% trade discount. Half 
the amount received by cash and balance half by cheque on the same day. 
March 6 Sold goods to Anuradha for ?1,00,000 on terms 10% trade discount and 5% cash 
discount if the payment is received within fifteen days. 80% payment is received on 
March 18
th
 by cheque 
March 20 Sold goods to Sudha for ?1,00,000 at 20% trade discount and 10% cash discount if the 
payment is received within ten days. She paid half the amount on March 26
th
 and 30% of 
the remainder on March 31
st
. 
 
 
 
 
 
 
 
 
 
 
80 
Ques 2 
The following balances appeared in the books of Vishal Stores on 1
st
 April, 2011: 
Assets: - Cash ?15,000; Bank balance ?5,000; Stock ?40,000; Furniture ?3,600; Debtors ?24,000 (X ?6,000; Y 
?8,000 and Z ?10,000). 
Liabilities:  Bank Loan ?10,000; Creditors ?12,500 (Ajay ?5,000, Vijay ?7,500). 
Following transactions took place during April 2011: 
 
April 2 Bought goods from Kailash for ?20,000 at a trade discount of 10% and cash discount of 
20% Paid 60% amount immediately. 
April 4 Sold goods to X for 9,000.  
April 5 Received ?14,800 from X in full settlement of his account.  
April 6 Cash deposited into bank ?10,000.  
April 8 Cheque received from Y for ?7,850 in full settlement of his account. this cheque was 
immediately deposited into bank. 
April 10 Received a cheque from X ?2,000.  
April 12 Cheque received from Z deposited into bank  
April 15 Cheque received from Y dishonored.  
April 16 Cash sales ?15,000; Out of this amount ?12,000 deposited into bank.  
April 16 Amount due to Ajay paid by Cheque.  
April 18 Old newspapers sold ?50.  
 Old furniture sold ?750  
April 20 Z became insolvent and 40 paise in a rupee could be received from his estate. 
April 22 Purchased goods from Gopal and paid by cheque ?8,000.  
April 24 Sold half of the above goods to Chanderkant at a profit of 30% on cost. 
April 25 Proprietor withdrew for private use ?2,000 from office and ?3,000 from bank. 
April 30 Paid salary to Motilal by Cheque ?2,000. 
April 30 Paid Rent by cheque ?1,500. 
April 30 Paid trade expenses ?500. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Page 5


 
 
76 
 
   
           
       
         
 
 
 
  
         
       
          
 
 
  
       
           
       
 
 
 
 
Use  of modern approach 
You are required to give (a) Journal Entries, (b) Nature of Account (Whether Asset, Liability, Capital, Expense, or Revenue), 
(c) Nature of change, and (d) Appropriate; rule for recording the change for the following transactions; 
1.  Nitin invested Rs.5,00,000 cash in the business.  
2.  Purchased building for Rs.2,50,000 in cash.  
3.  Purchased merchandise (goods) on account for Rs.50,000.  
4.  Sold merchandise for cash Rs.75,000.  
5.  Nitin withdrew cash Rs.12,500 for personal use.  
6.  Paid Rent Rs.2,000; Salary Rs.4,000.  
7.  Cash sales Rs.10,000.  
8.  Cash deposited in bank Rs.20,000.  
Solution:  
 
 
JOURNAL ENTRIES 
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) Nature  
of  
Account 
Nature  
of  
Change 
Appropriate Rule 
1 Cash A/c ...Dr.  
 To Capital A/c  
(Being the amount 
invested in business) 
 5,00,000  
5,00,000 
Asset 
Capital 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in capital in 
credited. 
2. Building A/c  ...Dr.  
 To Cash A/c  
(Being the building 
purchased for cash) 
 2,50,000  
2,50,000 
Asset  
Asset 
Increase  
Decrease 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
3. Purchases A/c ...Dr.  
 To Supplier 
(Party)  
(Being the goods 
bought on credit) 
 50,000  
50,000 
Expenses  
Liability 
Increase  
Increase 
Increase in expense is 
debited.  
Increase in liability is 
credited. 
 
 
77 
4. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 75,000  
75,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
5. Drawings A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
withdrawn from 
business) 
 12,500  
12,500 
Capital  
Asset 
Decrease  
Decrease 
Decrease in capital is 
debited.  
Decrease in asset is 
credited. 
6. Rent A/c  ...Dr.  
Salary A/c  ...Dr.  
 To Cash A/c  
(Being the expenses 
paid for the month) 
 2,000  
4,000 
 
 
6,000 
Expenses  
Expenses 
Asset 
Increase  
Increase  
Decrease 
Increase in expenses is 
debited.  
Increase in expenses is 
debited 
Decrease in asset is 
credited. 
7. Cash A/c  ...Dr.  
 To Sales A/c  
(Being the cash sales) 
 10,000  
10,000 
Asset  
Revenue 
Increase  
Increase 
Increase in asset is 
debited.  
Increase in revenue is 
credited. 
8. Bank A/c  ...Dr.  
 To Cash A/c  
(Being the cash 
deposited into bank) 
 20,000  
20,000 
Asset  
Asset 
Increase  
Increase 
Increase in asset is 
debited.  
Decrease in asset is 
credited. 
 
Example- Journalise the following transactions:  
(i)  Mr. Peter started business with cash Rs.1,00,000 and a building valued at Rs.5,00,000.  
(ii)  Purchased goods amounting to Rs.2,00,000 out of which goods of Rs.1,80,000 were purchased on credit from D. 
Lal.  
(iii)  Sold goods on credit to Ramesh Rs.1,60,000.  
(iv)  Received cheque for Rs.1,56,000 from Ramesh in full settlement of his account.  
(v)  Paid Rs.1,78,000 to D. Lal in full settlement of Rs.1,80,000 due to him by cheque.  
(vi)  An old machine with the book value of 80,000 is exchanged for a new machine of Rs.2,40,000. The old machine is 
valued at Rs.50,000 for exchange purposes by Machine Tools Ltd.  
(vii)  Purchased a machinery from Pele & Sons for Rs.50,000 on credit.  
(viii)  Depreciation of Rs.5,000 was provided on the machinery at the end of the year.  
(ix)  Paid income tax Rs.5,000.  
(x)  A cheque from a customer amounted to Rs.5,000 deposited in the bank was returned dishonoured. 
 
Solution:  
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.) 
(i) Cash A/c      ...Dr.  
Building A/c     ...Dr.  
 To Capital A/c  
(Being the business started with cash Rs.1,00,000 and 
building of Rs.5,00,000) 
 1,00,000 
5,00,000 
 
 
6,00,000 
(ii) Purchases A/c     ...Dr.  
 To Cash A/c  
 To D. Lal  
(Being the goods purchased for cash Rs.20,000 and on 
credit from D. Lal for Rs.1,80,000) 
 2,00,000  
20,000 
1,80,000 
(iii) Ramesh      ...Dr.  
 To Sales A/c  
(Being the goods sold to Ramesh on credit for 
Rs.1,60,000) 
 1,60,000  
1,60,000 
(iv) Bank A/c*      ...Dr.   1,56,000  
 
 
78 
Discount Allowed A/c    ...Dr.  
 To Ramesh  
(Being the cheque received from Ramesh and allowed 
him discount of Rs.4,000) 
4,000  
1,60,000 
(v) D. Lal      ...Dr.  
 To Bank A/c  
 To Discount Received A/c  
(Being the cheque issued to D. Lal in full settlement of 
his dues Rs.1,80,000) 
 1,80,000  
1,78,000 
2,000 
(vi) (New) Machine A/c     ...Dr. 
Profit and Loss A/c  
(Rs.80,000 - Rs.50,000)   ...Dr.  
 To (Old) Machine A/c*  
 To Machine Tools Ltd.  
(Being the exchange of old machine worth Rs.80,000, 
valued at Rs.50,000 for a new machine of Rs.2,40,000) 
 2,40,000  
 
30,000 
 
(vii) Machinery A/c     ...Dr. 
 To Pale & Sons  
(Being the.purchase of machinery on credit from Pele & 
Sons 
 50,000  
50,000 
(viii) Depreciation A/c     ...Dr. 
 To Machinery A/c  
(Being the depreciation charged on machinery for the 
year) 
 5,000  
5,000 
(ix) Drawings A/c     ...Dr. 
 To Cash A/c  
(Being the income tax paid) 
 5,000  
5,000 
(x) Customer      ...Dr. 
 To Bank A/c  
(Being the cheque deposited into bank dishonoured) 
 5,000  
5,000 
 
 
 
 
Super 7 
Ques 1 journalize 
2015  
March 1 Bought goods from Vishawas worth ?1,00,000 at 20% trade discount and 5% cash 
discount. Paid full amount at the time of purchase itself. 
March 3 Bought goods from Trisha for ?2,00,000 at 5% cash discount and 10% trade  discount. 
Half of the amount paid by cheque at the time of purchase. 
March 4 Sold goods to Nupur for ?50,000 at terms 4% cash discount and 20% trade discount. Half 
the amount received by cash and balance half by cheque on the same day. 
March 6 Sold goods to Anuradha for ?1,00,000 on terms 10% trade discount and 5% cash 
discount if the payment is received within fifteen days. 80% payment is received on 
March 18
th
 by cheque 
March 20 Sold goods to Sudha for ?1,00,000 at 20% trade discount and 10% cash discount if the 
payment is received within ten days. She paid half the amount on March 26
th
 and 30% of 
the remainder on March 31
st
. 
 
 
 
 
 
 
 
 
 
 
80 
Ques 2 
The following balances appeared in the books of Vishal Stores on 1
st
 April, 2011: 
Assets: - Cash ?15,000; Bank balance ?5,000; Stock ?40,000; Furniture ?3,600; Debtors ?24,000 (X ?6,000; Y 
?8,000 and Z ?10,000). 
Liabilities:  Bank Loan ?10,000; Creditors ?12,500 (Ajay ?5,000, Vijay ?7,500). 
Following transactions took place during April 2011: 
 
April 2 Bought goods from Kailash for ?20,000 at a trade discount of 10% and cash discount of 
20% Paid 60% amount immediately. 
April 4 Sold goods to X for 9,000.  
April 5 Received ?14,800 from X in full settlement of his account.  
April 6 Cash deposited into bank ?10,000.  
April 8 Cheque received from Y for ?7,850 in full settlement of his account. this cheque was 
immediately deposited into bank. 
April 10 Received a cheque from X ?2,000.  
April 12 Cheque received from Z deposited into bank  
April 15 Cheque received from Y dishonored.  
April 16 Cash sales ?15,000; Out of this amount ?12,000 deposited into bank.  
April 16 Amount due to Ajay paid by Cheque.  
April 18 Old newspapers sold ?50.  
 Old furniture sold ?750  
April 20 Z became insolvent and 40 paise in a rupee could be received from his estate. 
April 22 Purchased goods from Gopal and paid by cheque ?8,000.  
April 24 Sold half of the above goods to Chanderkant at a profit of 30% on cost. 
April 25 Proprietor withdrew for private use ?2,000 from office and ?3,000 from bank. 
April 30 Paid salary to Motilal by Cheque ?2,000. 
April 30 Paid Rent by cheque ?1,500. 
April 30 Paid trade expenses ?500. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
82 
 
 
  
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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