ACCOUNTING FOR MANAGER

BOOK KEEPING

Recording of business transactions which take place during Accounting Period Accounting Period-Commences on 1st April and Ends on 31st March every year unless otherwise specifically mentioned Guiding and controlling the business activities To analyze and interpret the financial results to the management,

so that management can understand what is happening to the

business and what is going to happen in future What must happen in the interest of the business concern

 Accounting to furnish information to the needy that is to the management, investors, government agencies etc Accounting consists of financial accounting, cost accounting managerial accounting

Financial accounting provides information to external users

External parties are investors, prospective investors, creditors bankers, government agencies etc

 Accounting is basically an information system It is involved in the process of converting inputs into outputs

It processes business transactions (inputs) to produce the desired

reports, statements etc (outputs) Business transaction- dealing between two or more parties that is seller and buyer Transaction means business transaction expressed in monetary terms or capable of expressing in monetary terms Internal users means proprietor or partners or board of directors

 Functional Managers such as

Purchase Manager Production Manager Marketing Manager or Sales Manager Finance Manager/Financial controller External parties are two types 1. Users with direct financial stake or interest 2. Users with indirect financial stake or interest

1. users with direct financial stake or interest are:

Shareholders present or prospective Debenture holders present or prospective Suppliers of input Lending financial institutions Employees 2. Users with indirect financial stake or interest: Customers and consumer groups

Tax authorities
Regulatory bodies

 Financial analysts and advisors Brokers and other financial intermediaries Trade unions Press General public Above persons/institutions/tax authorities/regulatory bodies need accounting information from their business concerns for various

reasons and purposes

Basically they need information to take appropriate decisions both individual and institutional investors consists of shareholders

 debenture holders etc need information

1. To asses the risk involved and return expected in relation to their investment
2. Whether they should continue to invest in the business or dispose of or 3. Invest in financial instruments which promise higher return with lower risk 4. Whether the business is capable of paying dividends/interest regularly 5. Whether there is any scope of capital appreciation The above said groups needs detailed information such as 1) Rate of growth in sales, volumes, etc 2) Profit-gross profit margin, operating profit, net profit, contribution, divisible

profits etc
3) Investment amount of capital invested, cost price of assets owned

4) return on investment (ROI)

5) Earnings per share 6) Market price of the equity (Ordinary shares ) 7) Financial institution (which lend money to the business organizations (banks and other institutions) require information from the borrowing organization to know -whether it is capable of paying the interest regularly - whether it is capable of paying installment principal regularly

So they need relevant accounting information to know liquidity position

of the borrowing unit that is short term liquidity and long term liquidity

 Suppliers of the different inputs who supply inputs on credit information from buying organization to evaluate short term liquidity of the organization so that the business is able to pay their dues when it falls dues Employees and trade unions require information from their organization to evaluate the stability and continuing profitability of the organization interested in assessing the ability of the employer organization pay them periodically (like salaries, bonus, etc promotional prospects capable of maintaining pension fund and retirement benefits Government is providing number of facilities to the business units (such as subsidy concessions of power, water, etc), hence it is the responsibility of the government to protest the interest of all sections of the society Government wants to know whether business enterprises are remitting various taxes duties etc to the exchequer For the above said reasons government and its agencies require accounting information GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) Accounting principles are in the form of guidelines and or rules which are used as standards for recording business transactions in the books of accounts and their fair presentation in the Financial statements.

 Financial Statement means: 1. Trading and Profit and Loss Account for the accounting period ended on (in case of trading organizations buying and selling Manufacturing and profit and loss account (in case of manufacturing units 2. Balance Sheet as at 31/03/2011 3. Cash flow statements for the period 4. Accounting policies 5. Accounting Standards 6. Notes forming part of accounts ACCOUNTING ASSUMPTIONS

1. Money Measurement : Record of transaction is made only those events which can be measured and expressed in terms of money . Transactions are recorded value of money (at the time the transactions are recorded) 2. Going Concern : Going concern concept means that a business concern that a business concern will continue to operate for a fairly long period, from this point of view its business transactions are recorded in the books of accounts

3. : The Business Entity: Every business undertaking whether it is a sole trading concern or a partnership firm or a limited company is considered as different entity from the person who owns it , hence all the transactions are recorded in the business concerns and not in the books of owners.

ACCOUNTING CONCEPTS

1. Accounting Period Concept: According to going concern assumption a business concern likely to continue for an indefinitely long period of time, for the purpose of reporting to outsiders like creditors, investors, banks, financial institutions, etc financial performance and financial position is required to be ascertained yearly. 2. Objectivity Concept: This concept specifies that all entries of business transactions which take place during accounting period should be supported by the evidences such as invoices (for sales), bills/invoices (for purchases), documents, deeds, vouchers, which are objective and subject to verification. 3. Dual-Aspect Concept: For each transactions there are two effects one Debit the other is credit. Evert business transaction involves dual or double aspects of equal value for example if an asset is increased corresponding increase in liability or capital

In the books of any business concern at any moment of time , the following equation holds good ASSETS=LIABILITIES+CAPITAL OR ASSETS-CAPITAL=LIABILITIES

ACCOUNTING PRINCIPLES
1. Cost Principle : An asset acquired by a business concern is recorded in the books of accounts at cost(Historical Cost) that is the value actually paid for acquiring the asset. 2. Accrual Principle: The accrual principle suggests that when a transaction has been entered into its consequences will certainly follow. So all transactions must be recorded in the books of accounts whether paid or not. It implies that revenues accrue in that year in which they are earned, and not in the year in which year they are actually received. Similarly expenses will accrue in the year in which they are incurred and not in the year in which they are actually paid.

3. Matching Principle: Matching principle has been evolved to help a concern to know its net profit or net loss and the details of all revenues and expenses. To know the net profit or net loss and details of all revenues and expenses every business concern prepares and presents a statement or an account known as Income statement or Profit and Loss Account for the account period.

Profit is the result of two factors namely i) revenues and ii) expenses and losses The revenues increases the profit and the expenses and losses decreases the profit. For the determination of profit or loss the two factors are matched and result balance is taken as the net profit or net loss. Matching concept provides a sound basis namely accrual basis for the ascertainment of the correct profit or loss of the business for the accounting period.
4. Realization Principle: According to the realization principle, is considered as being earned on the date on which it is realized ( it is not relevant whether cash is received or not) Revenue is considered as being realized: Not when goods are manufactured Or order is received But on the date on which goods or services are transferred to the customer and the customer is legally liable to pay for them

Advantages of this principle Revenue recognition principle is much of significance for the preparation of Income Statement or Profit and Loss Account This principle has contributed to the accrual basis of accounting (that means income or expense is to be recorded on the date on which goods or services are transferred/expense is incurred, whether the amount is received or not in the case of income, similarly whether expense is paid or not). This principle gives objectivity and definiteness to revenue recognition. ACCOUNTING CONVENTIONS 1.Conservatism: In accounting records and in the financial statements of a business concern all the anticipated losses (example few debts may become bad), risks and uncertainties should be provided but expected incomes should be ignored even the income sure to arise, to put in simple words

Anticipate losses but dont anticipate losses

Based on this convention that provision for doubtful debts, provision for discount on debtors, provision for fluctuation in the prices of investment etc are provided in the books of accounts of a business concern. IT SHOULD NEITHER SHOW ROSY PICTURE BY WINDOW DRESSING NOR WORSE PICTURE BY CREATING SECRET RESERVES

ACCOUNTING RULES 1. Materiality Rule: In accounting a detailed record is made record of business transactions only those business transactions which are Material No detailed record is made of transactions which are trivial (not important) In the case of such trivial transactions only a broad view is taken Minute(small) details of such transactions is not justified by the usefulness of the results Pencil is required for office, someone will be using the pencil in fact pencil is an asset by using the pencil it will depreciate day by day, we can calculate such depreciation but the cost of such an effort is will be very high hence pencil is taken as used at the time it purchased The logic behind the materiality rule is that only material and significant transactions are recorded Materiality is a relative term because what is material to one the same may not be material to other. For example an employee getting a salary of Rs 5,000/- per month if loses Rs 100 it is a material amount lost for him the same is not for a millionaire because it is not material amount for him. For instance cost of small items of tools are material(important) for a small repair workshop but they are not material for a ship builder

2. Disclosure Rule: Disclosure means all material facts must be disclosed in the financial statements For example in the case of sundry debtors (or receivables) the disclosure is as below: Total Sundry Debtors Rs 5,000 Debtors considered to be good 4,500 Debtors considered to be doubtful 500 Debtors outstanding less than six months Debtors outstanding for more than six months Rs 3,000 2,000

The idea behind this rule is that the financial statements are essentially meant for for external users, on the basis of information external users make take decisions

Assets Accounts

Land, Building, Machinery, Trade Debtors, cash, Prepaid expenses Bills Receivables Long term liabilities, trade creditors, receipts in advance, bills payable

Liability Accounts Classification of Commonly used Accounts

Owners Accounts

Capital/share capital, reserves & surplus, unpaid dividends, drawings Wages, salaries, rent, telephone expenses, interest on loans, etc Sales, interest on investment, profit on sale of asset, other income, etc

Expenses Accounts

Revenue Accounts

KINDS OF ACCOUNTS PERSONAL ACCOUNTS

KINDS OR TYPES OF ACCOUNTS

IMPERSONAL ACCOUNTS

Natural Personal Accounts

Ramas A/c Krishnas A/c HMTs A/c KSFCs A/c Outstanding Expenses A/c Pre-paid Expenses A/c Cash A/c Goods A/c Machinery A/c

PERSONAL ACCOUNTS

Artificial Personal Accounts Representative Personal Accounts

IMPERSONAL ACCOUNTS

REAL ASSET OR PROPERTY ACCOUNT

NOMINAL OR FICTICIOUS ACCOUNTS

Wages A/c Rent A/c Sales A/c Discount Received A/c

Sl.No.

KIND OF ACCOUNT

DEBIT /Dr

CREDIT/Cr

PERSONAL ACCOUNTS

Receiver of the benefit

Giver of the benefit

REAL ACCOUNTS NOMINAL ACCOUNTS

What comes in

What goes out

Expenses & Losses

Incomes & Gains

 NATURAL PERSONAL ACCOUNTS: These accounts are relating to natural persons natural person means a person who is having head, ears, nose, hands etc ARTIFICIAL PERSONAL ACCOUNTS: Accounts of business concerns and institutions which are recognized as persons in business society or by law example Bank A/c Co-operative Society A/c, Veerasaiva College A/c REPRESENTATIVE PERSONAL ACCOUNTS: They represent the amount owed to, or by certain persons (that is the persons behind these transactions) REAL ACCOUNTS: Real accounts are those accounts which we can touch, see, sense or feel NOMINAL ACCOUNTS: Nominal accounts are those accounts which we can not touch, see, sense or feel

 ACCOUNT It is summarized transactions which have taken place during a particular period

FORMAT OF ACCOUNT An account may be horizontal or vertical

EXAMPLE OF HORIZONTAL ACCOUNT Dr RAMAS A/c Cr

 DEBIT Means debit side of the account or left hand side of the account CREDIT Means credit side of the account or right hand side of the account JOURNAL Journal is derived from a French word Jour which denotes a day, it is also called Day Book where business transactions of a particular day are recorded in this book This is also called Book of Original Entry or Prime Entry Dr Means an account is debited Cr Means an account is credited FOR EVERY BUSINESS TRANSACTION HAS TWO EFFECTS ONE IS DEBIT THE OTHER IS CREDIT FOR EVERY BUSINESS TRANSACTIONS TWO ACCOUTS ARE INVOLVED ONE ACCOUNT IS DEBITED AND THE OTHER ACCOUNT IS CREDITED WITH THE SAME AMOUNT

 Dr denotes an Account is debited Cr denotes an Account is credited For example Ramas Account is debited and Cash Account is credited By denotes an Account is debited To denotes an Account is credited Ramas A/c To Cash A/c

Cash A/c

By Ramas A/c

 EXAMPLE OF VERTICLE FORM OF ACCOUNT Paid cash to Rama Rs 2,00,000 on 01/03/2012 DATE 01/03/2012 PARTICULARS L.F. DEBIT (Rs) RAMAS A/c To Cash A/c 15 2,00,000 CREDIT (Rs)

L.F. Means ledger folio where the debit and credit are posted in their respective ledgers

JOURNALISATION OF TRANSACTIONS
An attempt is made to analyze few business transactions Rama commenced business with Rs 2 lacs cash The two accounts involved are 1. Ramas Capital A/c and 2. Cash A/c Dr To Ramas Capital A/c Cash A/c 2,00,000 Cr

Ramas Capital A/c By Cash A/c 2,00,000

JOURNAL Date 01/03/2012 L.F. 1 2 PARTICULARS By Cash A/c To Ramas Capital A/c (Capital introduced by Rama) DEBIT(Rs) CREDIT(Rs) 2,00,000 2,00,000

 To/By are irrelevant now a days they need not be written If left hand side of the account is written means the account is debited Similarly if right hand side of the account is written means the account is credited

NARRATION Means brief description of the transaction

1) Journalize the following transactions in the books of Mr. Anwar 2012 1. January 1 Anwar commenced business with cash Rs 5,000 2. 3 Paid into Bank Rs 1,000 3. 4 Bought goods for cash Rs 1,000 4. 5 Bought office furniture for cash Rs 500 5. 6 Sold goods for cash Rs 600 6. 7 Sold goods to Murthy on credit Rs 400 7. 8 Bought goods from Narayan on credit Rs 500 8. 10 Paid rent to land lord Rs 300 9. 12 Paid salary to manager Rs 100 10. 15 Sold furniture for cash Rs 200 11. 16 Received commission from Suresh Rs 20 12. 18 Bought goods Rs 400 13. 20 Sold goods Rs 500 14. 22 Sold goods to Shenoy Rs 300 15. 23 Bought goods from Ramesh Rs 200 16. 24 Bought goods from Kamath for cash Rs 500 17. 25 Paid carriage Rs 50 18. 26 Sold goods to Rajesh for cash Rs 600 19. 27 Paid postage Rs 30 20. 31 Withdrew cash from office for personal use Rs 200

Date 01/01/2012

Particulars Cash Account

Debit (Rs) 5,000

Credit (Rs)

Anwars Capital Account

(Cash introduced by the proprietor) 03/01/2012 Bank Account Cash Account (Cash paid into Bank) 1,000

5,000

1,000

04/01/2012

Purchase Account Cash Account

(Goods purchased for cash)

1,000 1,000

05/01/2012

Office Furniture Account Cash Account (Office furniture bought for cash)

500 500

Date 06/01/2012

Particulars Murthys Account Sales Account (Goods sold to Murthy on credit)

Debit (Rs) 400

Credit (Rs) 400

08/01/201

Purchases Account Narayans Account (Goods purchased from Narayan on credit)

500 500

10/01/2012

Rent Account Cash Account

300 300

(Rent paid)

Date 12/01/2012

Particulars Salaries Account Cash Account

Debit (Rs) 100

Credit (Rs) 100

(Salary paid)
15/01/2012 Cash Account Furniture Account (Furniture sold for cash) 16/01/2012 Cash Account Commission Account (Commission received) 18/01/2012 Purchase Account Cash Account (Goods purchased for cash) 20/01/2012 Cash Account Sales Account (Goods sold for cash) 500 500 400 400 20 20 200 200

Date
22/01/2012

Particulars
Shenoys Account Sales Account (Goods sold Shenoy on credit)

Debit (Rs) Credit (Rs)

300 300

23/01/2012

Purchases Account Rameshs Account

200 200

(Goods purchased from Ramesh on credit)

24/01/2012 Purchases Account Cash Account (Goods purchased for cash) 25/01/2012 Carriage Account Cash Account (Cash paid for carriage) 50 50 500 500

Date 26/01/2012

Particulars Cash Account Sales Account (Goods sold for cash)

Debit (Rs) 600

Credit (Rs) 600

27/01/2012

Postage Account Cash Account (Cash paid for postage)

30 30 200 200

31/01/2012

Anwars Drawings Account Cash Account (Cash withdrawn for personal use of proprietor)

Journalize the following transactions and post them to the various ledger Accounts and prepare the trial balance as on 31st January 2012 2012, January. 1 Rao commence business with 5,000 2 Purchased goods for cash 2,500 3 Bought office furniture for cash 500 4 Paid for postages 10 5 Purchased goods from Rajkumar 2,000 7 Sold goods for cash 150 8 Purchased goods from Rahim 400 9 Sold goods to Suresh 400 10 Sold goods to Nayak 300 11 Purchased goods for cash 350 13 Received cash from Nayak 250 15 Paid cash to Rahim 400 17 Returned goods to Rajkumar 200 20 Suresh returned goods 50 20 Paid salaries 150 25 Sold goods for cash 500 26 Rao withdrew for personal use 800 27 Paid for stationery 100 28 Paid rent 225 31 Received commission 50

Date 01/01/2012

Particulars Cash Account

Debit (Rs) 5,000

Credit (Rs)

Raos Capital Account

(Capital brought in by Rao) 02/01/2012 Purchases Account Cash Account (Goods purchased for cash) 03/01/2012 04/01/2012 Office furniture Account Cash Account Postage Account Cash Account (Cash paid for postage) 05/01/2012 Purchases Account Rajkumars Account (Goods purchased from Rajkumar on credit) 2,000 10 500 2,500

5,000

2500

500 10

2,000

Date 07/01/2012

Particulars Cash Account Sales Account (Goods sold for cash)

Debit (Rs) 150

Credit (Rs) 150

08/01/2012

Purchases Account Rahims Account

400 400

(Goods purchased from Rahim on credit)

09/01/2012 Sureshs Account Sales Account (Goods sold to Suresh on credit) 10/01/2012 Nayaks Account Sales Account (Goods sold to Nayak on credit) 300 300 400 400

Date
11/01/2012

Particulars
Purchases Account Cash Account (Goods purchased for cash)

Debit (Rs)
350

Credit (Rs)
350

13/01/2012

Cash Account Nayaks Account (Cash received from Nayak on account)

250 250

15/01/2012

Rahims Account Cash Account (Cash paid to Rahim)

400 400 200 200

17/01/2012

Rajkumars Account Purchase Returns Account (Goods returned to Rajkumar)

Date 20/01/2012

Particulars Sales Returns Account Sureshs Account (Goods returned by Suresh)

Debit (Rs) 50

Credit (Rs) 50

22/01/2012

Salaries Account Cash Account (Cash paid for salaries)

150 150 500 500 800 800

25/01/2012

Cash Account Sales Account (Goods sold for cash)

26/01/2012

Raos Drawings Account Cash Account (Cash withdrawn by Rao for his personal use)

Date 27/01/2012

Particulars Stationery Account Cash Account (Cash paid for stationery)

Debit (Rs) 100

Credit (Rs) 150

28/01/2012

Rent Account Cash Account (Cash paid for rent)

225 225 50 50

31/01/2012

Cash Account Commission Account (Cash received for commission)

LEDGER: It is the book where transactions of the same nature that is pertaining to a

particular person, thing or service. They are classified and grouped together in one
place in the form of an account, through a process called POSTING This is a process transferring of entries from the journal to the ledger BALANCING OF A LEDGER ACCOUNT OR STRIKING THE BALANCE PF A LEDGER ACCOUNT: It is a process of ascertaining whether a particular account has received more benefits than it has given or has given more benefits than it has received on a particular date In other words it is a process of finding out the difference between the total of the

Debit side and the total of Credit side of an account . In short it is the act of ascertaining
The difference between two sides of a ledger account

In ledger account is ascertaining difference between two sides, such difference is added
to the side which has lesser amount by calling it as TO BALANCE CARRIED DOWN (TO BALANCE C/d ) OR BY BALANCE BROUGHT DOWN (BY BALANCE B/d ) Beginning of the next(month) balancing period is written on the opposite side of the account TO BALANCE BROUGHT DOWN (FORWARD) OR BY BALANCE BROUGHT DOWN Or To balance b/d or by balance b/d DEBIT BALANCE Debit side of an account exceeds credit side of an account CREDIT BALANCE Credit side of an account exceeds debit side

TRIAL BALANCE it is a statement where debit balances and credit balances are of various
accounts are jotted down. The purpose of preparing trial balance is to find out arithmetical accuracy while posting transactions from journal to ledger

Trial balance was very essential in case of preparation of books of accounts under manual system. After advent of different types of computer accounting packages there is no scope for arithmetical errors. In computer environment it is relevant to know what are the types of accounts, number of accounts and their balances for a particular period

RAOS CAPITAL ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

01/01/2012
31/01/2012 01/02/2012

Cash Account
Balance C/d Total Balance B/d 5,000 5,000

5,000
5,000 5,000 5,000 Cr

RAOS DRAWINGS ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

800
800 800 800 800 800 Dr

01/02/2012

Balance B/d

RAOS DRAWINGS ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

02/01/2012
31/02/2012 01/02/2012

Cash Account
Balance C/d Total Balance B/d

800
800 800 800 800 800 Dr

PURCHASE ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

02/01/2012

Cash Account
Rajkumars Account Rahims Account Cash Account Balance C/d Total

2,500
2,000 400 350 5,250 5,250 5,250 5,250 5,250 Dr

01/02/2012

Balance B/d

PURCHASE RETUNS ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

02/01/2012
31/01/2012 01/02/2012

Rajkumars Account
Balance C/d 200 200 200

200
200 200 Cr

SALES ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Sureshs Account Nayaks Account Cash Account Balance C/d Total 1,350 1,350

150
400 300 500 1,350 1,350 1,350 Cr

01/02/2012

Balance B/d

SALES RETURN ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Sureshs Account
Balance C/d Total

50
50 50 50 50 50 Dr

01/02/2012

Balance B/d

OFFICE FURNITURE ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

500
500 500 500 500 500 Dr

01/02/2012

Balance B/d

RAHIMS ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Purchases Account Total

400
400 400 400

RAJKUMARS ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/Cr

31/01/2012

Purcases Account
Purchase Returns Account Balance C/d Total 2000 200

2,000
1800 2000 1800 Cr

01/02/2012

Balance B/d

SURESHS ACCOUNT Date Particulars Debit Credit (Rs) (Rs) Balance Dr/ Cr

31/01/2012

Sales Account
Sales Returns Account Balance C/d Total

400
50 350 400 400 350 Dr

01/02/2012

Balance B/d

NAYAKS ACCOUNT Date Particulars Debit Credit (Rs) (Rs) Balance Dr/ Cr

31/01/2012

Sales Account
Cash Account Balance C/d Total

300
250 50 300 50 300 50 Dr

01/02/2012

Balance B/d

POSTAGE ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

10
10 10 10 10 10 Dr

01/02/2012

Balance B/d

SALARIES ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

150
150 150 150 150 150 Dr

01/02/2012

Balance B/d

STATIONERY ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

100
100 100 100 100 100 Dr

01/02/2012

Balance B/d

RENT ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total

225
225 225 225 225 225 Dr

01/02/2012

Balance B/d

COMMISSION ACCOUNT Date Particulars Debit (Rs) Credit (Rs) Balance Dr/ Cr

31/01/2012

Cash Account
Balance C/d Total 50 50

50
50 50 50 Cr

01/02/2012

Balance B/d

Date 01/01/2012 02/01/2012 02/01/2012 11/01/2012

Particulars Raos Capital Account

CSH ACCOUNT Debit (Rs) 5,000

Credit (Rs) Balance Dr/Cr

Raos Drawings Account Purchase Account Purchase Account

800 2,500 350

07/01/2012
25/01/2012 03/01/2012 15/01/2012 13/01/2012 04/01/2012 22/01/2012 27/01/2012 28/01/2012

Sales Account
Sales Account Office Furniture Account Rahims Account Nayaks Account Postage Account Salaries Account Stationery Account Rent Account

150
500 500 400 250 10 150 100 225

Name of the Account Raos Capital Account Rao.s Drawings Account Purchases Account Purchase Returns Account Sales Account Sales Return Account Office Furniture

Debit Balance (Rs) Credit Balance (Rs) 5,000 800 5,250 200 1,350 50 500

Cash Account Rajkumars Account

Sureshs Account Nayaks Account Postage Account Salaries Account Stationery Account Rent Account Commission Account

915 1800
350 50 10 150 100 225 50

Journalize the following transactions in the books of Viswanath and post them into ledger and prepare Trial Balance 2011, December. Rs 1 Viswanath commenced his business with the following Cash in hand 1,500 Cash at Bank 3,500 Goods in hand 3,000 Furniture 2,000 Buildings 10,000 2 Gave charity 20 5 Loan taken from the Bank 5,000 6 Purchased Motor Car 5,000 8 Cash sales paid into Bank 2,000 9 Withdrew cash for petty cash 100 10 Introduced further capital 2,000 12 Bought shares in the Mangalore Fertilizers Ltd 800 13 Paid proprietors life insurance premium 100 15 Paid Chitra cash in lieu of cheque 500 16 Cash received on sale of shares 300 17 Received from Kishen one hundred rupees note and gave him change for it 18 Invested in National Savings Certificate 200 19 Bought goods from Lakshman on account 2,000 20 Sold goods to Bharath on account 1,500

21 23 24 25 26 27 28 29 31 31 31

Received from Rao Rs 100 advance for goods Received a cheque from Ram to be credited to Bharath Paid tax to the Mangalore Corporation Commission charged to Raghav for a getting a house for him Furniture costing Rs 300 was destroyed by fire Bank Charges Bank allowed interest on Deposits Bank collect interest on investment Closing stock on hand Interest on loan taken from the Bank Interest on capital

500 50 100 10 20 10 1,000 100 100