Saturday, 31 March 2012

Examples of Journal entries in a simplified way - 2


6,Bought Stamps Rs.10

Account to be debited            Postage A/c.(Nominal A/c - Debit losses and expenses)
Account to be credited           Cash A/c(Real A/c-Credit What goes out)

Reason - 
(a)Postage is an expense.. 
(b)Cash goes out. 


7.Withdrew cash from business for personal use Rs. 100

Account to be debited            Drawings A/c (Personal A/c - Debit the receiver of benefit)
Account to be credited           Cash A/c   (Real A/c-Credit What goes out)

Reason - 
(a)Proprietor is the receiver of benefit, when he withdraws cash from business for his personal use. 
(b)Cash goes out. 

8.Paid salary to manager Rs. 300

Account to be debited            Salaries A/c (Nominal A/c - Debit  losses and expenses)
Account to be credited           Cash A/c   (Real A/c-Credit What goes out)

Reason - 
(a)Salaries is an expense.
(b)Cash goes out. 

9.Paid rent to landlord to Rs. 200.

Account to be debited            Rent A/c (Nominal A/c - Debit  losses and expenses)
Account to be credited           Cash A/c   (Real A/c-Credit What goes out)

Reason - 
(a)Rent paid is an expense.
(b)Cash goes out. 

10.Received commission from George Rs. 50

Account to be debited            Cash A/c (Real A/c - Debit  what comes in)
Account to be credited           Commission A/c   (Nominal A/c-Credit Incomes and gains)

Reason - 
(a)Cash comes in 
(b)Commission received is an income.

11.Paid for repairing machinery Rs. 30

Account to be debited            Repairs A/c (Nominal A/c - Debit  losses and expenses)
Account to be credited           Cash A/c   (Real A/c-Credit What goes out)

Reason - 
(a)Repairs to machinery is an expense.
(b)Cash goes out.

12.Received cash from Raghav on account Rs. 400

Account to be debited            Cash A/c (Real A/c - Debit  What comes in)
Account to be credited           Raghav A/c   (Personal A/c-Credit the giver of benefit)

Reason - 
(a)Cash comes in 
(b)Raghav is the giver of benefit

13.Gave loan to Bhasker Rs.500.

Account to be debited            Bhasker's Loan A/c (Personal A/c - Debit  the receiver of benefit)
Account to be credited           Cash A/c   (Real A/c-Credit what goes out)

Reason - 
(a)Bhasker is the receiver of benefit, i.e., loan.
(b)Cash goes out.

14.Purchased goods from Raghu Rs. 300

Account to be debited            Purchases A/c (Real A/c - Debit what comes in 
                                                                  or Nominal A/c - Debit losses and expenses) 
Account to be credited           Raghu A/c   (Personal A/c-Credit the giver of benefit)

Reason - 
(a)Goods come in on purchase or goods purchased are an expense for the business.
(b)Raghu is the giver of benefit.

15.Opened a bank account with Rs. 600.

Account to be debited            Bank A/c (Personal A/c - Debit the receiver of benefit)                                                                 
Account to be credited           Cash A/c   (Nominal A/c-Credit what goes out)

Reason - 
(a)Bank is the receiver of benefit i.e., cash
(b)Cash goes out.

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