Enter the above transactions in his books of account. | Date | Description | Amount (₹) | |---|---|---| | 2025 Jan. 2 | Bought goods for cash | 20,000 | | 2025 Jan. 3 | Sold goods for cash | 7,000 | | 2025 Jan. 15 | Sold goods to Shravan | 6,000 | | 2025 Jan. 18 | Bought goods on credit from Anurag | 50,000 | | 2025 Jan. 19 | Goods returned to Anurag | 5,000 | | 2025 Jan. 20 | Sold goods for cash | 30,000 | | 2025 Jan. 22 | Paid electricity bill | 1,000 | | 2025 Jan. 28 | Paid for telephone bill | 500 | | 2025 Jan. 31 | Paid rent | 3,800 |
Answer (1)
Let's go through the transactions one by one and see how they would be entered in the student's books of account, specifically focusing on the journal entries. In accounting, journal entries are records of financial transactions in the order in which they occur. Each journal entry consists of a debit and a credit.
2025 Jan. 2 | Bought goods for cash | ₹20,000
Journal Entry:
Debit: Purchases Account ₹20,000
Credit: Cash Account ₹20,000
2025 Jan. 3 | Sold goods for cash | ₹7,000
Journal Entry:
Debit: Cash Account ₹7,000
Credit: Sales Account ₹7,000
2025 Jan. 15 | Sold goods to Shravan | ₹6,000
Journal Entry:
Debit: Accounts Receivable - Shravan ₹6,000
Credit: Sales Account ₹6,000
2025 Jan. 18 | Bought goods on credit from Anurag | ₹50,000
Journal Entry:
Debit: Purchases Account ₹50,000
Credit: Accounts Payable - Anurag ₹50,000
2025 Jan. 19 | Goods returned to Anurag | ₹5,000
Journal Entry:
Debit: Accounts Payable - Anurag ₹5,000
Credit: Purchases Returns and Allowances Account ₹5,000
2025 Jan. 20 | Sold goods for cash | ₹30,000
Journal Entry:
Debit: Cash Account ₹30,000
Credit: Sales Account ₹30,000
2025 Jan. 22 | Paid electricity bill | ₹1,000
Journal Entry:
Debit: Utilities Expense Account ₹1,000
Credit: Cash Account ₹1,000
2025 Jan. 28 | Paid for telephone bill | ₹500
Journal Entry:
Debit: Telephone Expense Account ₹500
Credit: Cash Account ₹500
2025 Jan. 31 | Paid rent | ₹3,800
Journal Entry:
Debit: Rent Expense Account ₹3,800
Credit: Cash Account ₹3,800
Each transaction is recorded chronologically and reflects the double-entry accounting principle, where each debit entry must have a corresponding and equal credit entry. This ensures the accounting equation (Assets = Liabilities + Equity) remains in balance.
