Scribd
Upload
16 views

23 Question Answer

Nice

Uploaded by

aathilhasan43
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
16 views

23 Question Answer

Nice

Uploaded by

aathilhasan43
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 8

1.

Commenced business with cash ₹70,000

Entry:

Cash A/c Dr. ₹70,000


To Capital A/c ₹70,000
(Being business commenced with cash)

Explanation:

Cash A/c: Cash is a Real Account. The rule for real accounts is “Debit what comes in”. Since
cash is coming into the business, we debit the Cash A/c.

Capital A/c: Capital is a Personal Account. The rule for personal accounts is “Credit the giver”.
In this case, the owner (Pam) is the giver of the capital, so we credit the Capital A/c.

2. Purchased goods from X and Co. On credit ₹30,000

Entry:

Purchases A/c Dr. ₹30,000


To X and Co. ₹30,000
(Being goods purchased on credit)
Explanation:

Purchases A/c: Purchases are a Nominal Account. The rule for nominal accounts is “Debit all
expenses and losses”. Since the purchase of goods is an expense, we debit the Purchases A/c.

X and Co.: X and Co. Is a Personal Account. The rule for personal accounts is “Credit the giver”.
Since X and Co. Is the party supplying goods to Pam on credit, we credit their account.

3. Cash deposited into bank ₹40,000

Entry:

Bank A/c Dr. ₹40,000


To Cash A/c ₹40,000
(Being cash deposited into the bank)

Explanation:

Bank A/c: The bank is a Real Account. The rule for real accounts is “Debit what comes in”.
Since cash is being deposited into the bank, we debit the Bank A/c.

Cash A/c: Cash is also a Real Account. The rule for real accounts is “Credit what goes out”.
Since cash is going out of the business, we credit the Cash A/c.
4. Bought a building from I and Co. On credit ₹95,000

Entry:

Building A/c Dr. ₹95,000


To I and Co. ₹95,000
(Being building purchased on credit)

Explanation:

Building A/c: Building is a Real Account. The rule for real accounts is “Debit what comes in”.
Since the building is coming into the business, we debit the Building A/c.

I and Co.: I and Co. Is a Personal Account. The rule for personal accounts is “Credit the giver”.
Since I and Co. Gave the building on credit, we credit their account.

5. Cash withdrawn from bank for office use ₹5,000

Entry:
Office Expenses A/c Dr. ₹5,000
To Bank A/c ₹5,000
(Being cash withdrawn from bank for office use)

Explanation:

Office Expenses A/c: This is a Nominal Account. The rule for nominal accounts is “Debit all
expenses and losses”. Since office expenses are being incurred, we debit the Office Expenses
A/c.

Bank A/c: The bank is a Real Account. The rule for real accounts is “Credit what goes out”.
Since money is going out of the bank, we credit the Bank A/c.

6. Cash withdrawn from bank for personal use of Ram ₹4,000

Entry:

Drawings A/c Dr. ₹4,000


To Bank A/c ₹4,000
(Being cash withdrawn from bank for personal use of Ram)

Explanation:
Drawings A/c: Drawings is a Personal Account. The rule for personal accounts is “Debit the
receiver”. Since Ram is the receiver (withdrawing for personal use), we debit the Drawings A/c.

Bank A/c: The bank is a Real Account. The rule for real accounts is “Credit what goes out”.
Since money is being withdrawn from the bank, we credit the Bank A/c.

7. Towels given as charities ₹3,000

Entry:

Charity A/c Dr. ₹3,000


To Purchases A/c ₹3,000
(Being towels given as charity)

Explanation:

Charity A/c: Charity is a Nominal Account. The rule for nominal accounts is “Debit all expenses
and losses”. Since giving to charity is an expense, we debit the Charity A/c.

Purchases A/c: Purchases is a Nominal Account. The rule for nominal accounts is “Credit all
incomes and gains”. Since goods are leaving the business (towels), we credit the Purchases A/c.
8. Shirts taken over by Ram for personal use ₹12,000

Entry:

Drawings A/c Dr. ₹12,000


To Purchases A/c ₹12,000
(Being shirts taken over by Ram for personal use)

Explanation:

Drawings A/c: Drawings is a Personal Account. The rule for personal accounts is “Debit the
receiver”. Since Ram is taking shirts for personal use, we debit the Drawings A/c.

Purchases A/c: Purchases is a Nominal Account. The rule for nominal accounts is “Credit all
incomes and gains”. Since goods (shirts) are leaving the business, we credit the Purchases A/c.

9. Sarees distributed as free samples ₹3,000

Entry:

Advertisement A/c Dr. ₹3,000


To Purchases A/c ₹3,000
(Being sarees distributed as free samples)

Explanation:

Advertisement A/c: Advertisement is a Nominal Account. The rule for nominal accounts is
“Debit all expenses and losses”. Since distributing free samples is considered an advertising
expense, we debit the Advertisement A/c.

Purchases A/c: Purchases is a Nominal Account. The rule for nominal accounts is “Credit all
incomes and gains”. Since goods (sarees) are leaving the business, we credit the Purchases A/c.

10. Goods (dable clothes) used for office use ₹200

Entry:

Office Expenses A/c Dr. ₹200


To Purchases A/c ₹200
(Being goods used for office purposes)

Explanation:

Office Expenses A/c: Office expenses are a Nominal Account. The rule for nominal accounts is
“Debit all expenses and losses”. Since using goods for office purposes is an expense, we debit
the Office Expenses A/c.
Purchases A/c: Purchases is a Nominal Account. The rule for nominal accounts is “Credit all
incomes and gains”. Since goods are leaving the business, we credit the Purchases A/c.

You might also like