25,000 and Furniture and Fittings worth Rs. 4 Purchased Office Equipment valued at Rs. 60,000 and paid for half of the amount by cheque, after a cash discount of 4%. 20,000 by cheque as rent advance to his landlord for the premises of the business covering period of 10 years. 30,000 which was granted at an interest of 12% per annum payable monthly. 2 Negotiated a loan from Sunrise Bank for an amount of Rs. The following transactions took place in the month of January: Jan. 25,000 and half of the amount is paid by cheque. On the same day, he purchased a motor van from Toyota Company valued at Rs.
50,000 which he paid into the business account at Sunrise Bank in Surkhet and stock of goods valued Rs.
DUE TO DUE FROM JOURNAL ENTRY FULL
T-Accounts, Journal Entry and Trial Balance QuestionĬlick here for more Full Accounting Questions and AnswersĬomments for Journal Entry Question and Answer.Journal Entries and Ledger Question and Answer.Basic Accounting Journal Entries Exercise.Best, Michael Celender Founder of Accounting Basics for Students Related Questions & Tutorials: Greatful thanks to Manish Kothari and other contributors below for helping to solve this question. This cancels out the entire debt to creditors of 200,000.
Of course, only 180,000 is actually paid. Dr Creditors 200,000 Cr Cash 180,000 Cr Discount Received (200,000 x 0.1) 20,000 The 10% discount which comes to 20,000 is counted as an income for the business. In the end of the day the debit to purchases or inventory both mean less cost of goods sold to be shown in the income statement. And as a contra entry against this, we have to reduce our purchases account (it is purchases for the periodic system of inventory ) or inventory account (for the perpetual system ). Dr Loss due to fire (expense) 20,000 Cr Purchases/Cost of Goods Sold 20,000 In the journal entry above, an expense has to be recorded to show the loss. Dr Depreciation (3,000 x 0.1) 300 Cr Accumulated Depreciation 300 7. Dr Salaries (200,000 + 110,000) 310,000 Cr Cash 200,000 Cr Salaries owing 110,000 As far as I understand, for journal 4 above, the salaries of 200,000 were actually paid but another 110,000 are still outstanding (salaries "due" means "owed" or "outstanding"). Note that prepayments are not really covered on this website, but I do go over them in my accounting books. A prepayment of a future expense is an asset and is counted as part of debtors - this is because you paid the expense before you should have, so it's like your business is owed the money right now for paying to early. Dr Wages (expense) 100,000 Dr Prepaid Wages (asset*) 20,000 Cr Cash 120,000 *Note that this is called a prepayment. Dr Purchases 8,000 Cr Cash 3,000 Cr Creditors 5,000 3. Dr Cash 8,000 Dr Plant and machinery 3,000 Cr Capital 11,000 2. 8 - Payment made to creditors to the value of 200,000 at 10 percent discount. 7 - Goods costing 20,000 destroyed by fire. 6 - Depreciation 10 percent on plant & machinery.
5 - Sales made for cash 600,000 and on credit 800,000. 2 - Stock purchase for sale (cash purchase) = 3,000, credit purchase = 5,000 3 - Wages paid 120,000 (including 20,000 relating to a future year). Grab a pen and piece of paper and time yourself while attempting this exercise.ĭifficulty Rating: Intermediate -> Advanced Time limit: 15 minutes Question: Record the journal entries for the following: 1 - Business started with cash 8,000 and plant & machinery 3,000. Before you begin: It's important for testing and exams to make sure you not only answer questions correctly but also complete them at the right speed.
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