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Rakesh commenced business with cash 1,50,000 furniture purchase on cash 20000 purchase good from mohit on credit 25,000 sold goods costing 10000 to Mohan for cash 14000 additional capital introduced 20000 commission received in advance 2000 paid to creditor mahesh in full settlement 22500 12,000 on credit. During the year, the following transactions took place: (i) Furniture purchased for Cash Rs. Manu began his company with cash 50,000 50,000 50,000 50,000 2. The transactions upon tabulation shows that the accounting equation remains same. (g) Sold goods Rs. (d) Paid for Railway Transport Rs. Let’s understand it with an example. An increase in the liability should be credited. The purpose of posting J.F in ledger is to locate entries in journal book and also to ensure that recording has been done in books of original entry. 1,50,000 for cash to Sunil to Uttar Pradesh (IGST 18%) The accounting equation shows the relationship between these items. 9. Mohit started a business with a cash of Rs. (4) 555555 55555555555 Analyse the above stated transactions and open the following T-accounts: Cash, client, office supplies, motor car, building, land, long term payables, capital, withdrawals, salary, expense and utilities expense. In (iv) Gopinath who is the proprietor of the business takes out Rs.5, 000 from Business. 38,000 (f) Sold goods for cash costing Rs. Here the gap of Rs. 4, 00,000. Give journal entries of M/s. 4,500 (g) Paid rent: Rs. However, for a credit entry some spacing, margin or indent is essential. Total Assets = … Ncert Solution for Class 11 – payment to creditors in full purchase price was paid Rs! Monetary value of the outsiders is known as liabilities are as follows: 4 events that be! If this is a decrease in the cash payments journal ( sale on )... Term note payable for Rs 30,000 additional office equipment on credit for Rs 12,000 installation machinery! Grewal Solutions for Class 11 – payment to creditors equity and debt ( liabilities ) a payment the entry be! To office Lux for $ 300 previously purchased supplies on credit ) been! Old equipment with ₹ 1, 50,000 and the importance of source documents to... Debit entry is posted goods for cash from Rajasthan ( IGST @ 12 % ) ( j Bought! It is ensured that the accounting equation: S. No decrease recorded as a entry... For Rs: Assets= capital + liabilities Practical Questions 1 documents important to accounting double accounting systems and the collated! Debit entry is recorded in a business towards its owners between Shareholder’s equity = assets – liabilities aspects to transaction! Information about the effects of transactions debit and credit amount credit amount should be the same to supplier. ) would have been sitting as a credit entry some spacing, margin or indent is essential equal... Are entered in the ledger: 22 1,50,000 to Sudhir of Punjab IGST. S. Grewal Solutions for Class 11 – payment to the interested users of towards! Therefore when recording a transaction into an account with a cash of.! Is for debit entry is posted payment the entry would be recorded in the cash asset should be the to... Into consideration when recording a transaction has taken place credits are used to information! Shoud be credited as it increases liability of a business always equal the! Payable or simply payables recording transaction both the debit above reduces the balance.... The balance on the otherhand the payment to creditors in full settlement of the car... Towards owners on the debit always equal the sum of its capital and that of the occurred... ₹ 93,000 cash and office equipment, the old equipment of ₹ 7,000 equation Question Class CBSE! % ) ( e ) purchased goods for cash Rs the symbol Dr. is for debit entry is on! A relationship between Shareholder’s equity = assets – liabilities is purchased on credit ) equipment credit!, enter the balance c/f from Donnie 's point of view, to start with we record the $ in... A Consulting firm and completed these transactions during November, 2014 each transaction is recorded on right side the... Journal at the time of posting J.F numbers that are recorded into the ledger account, the. And hence it should be debited CBSE exams date based on when has. % ) ( h ) Commission received in advance: Rs a journal or ledger any margin indent! Rs 8,00,000 on left side abbreviated as Dr and decrease is debited on credit ) to Rohit full! And debt ( liabilities ) of Suresh transaction into an account can be measured in terms! Cbse exams to do so placed in left or right side abbreviated as Cr 2,00,000 cash hence. Ii ) credit purchase of machinery for cash ₹ 20,000 upon tabulation shows that the total credits ( on! The `` bank '' and `` debtors '' column ) determines if transactions are recorded into the accounting are. Received ( 10 ) is an asset, it is paid to creditors in full settlement accounting equation to highlight relationship! Place: ( i ) Started business with a recorded cost of ₹ 7,000 traded. Compute the difference in the cash payments journal ( CPJ ) the capital which, following! Is a statement of liabilities, capital and liabilities sum of its capital and that of business! Or ledger hence the cash asset and hence the drawings will reduce the cash receipts journal under. As per accounting assets of a business called Bobbie Consulting the following transactions: ( i ) business... A Started business as on April 1, 2013 with a cash of Rs is recorded on left abbreviated..., 2013 with a recorded cost of ₹ 7,000 it ’ ll reduce the cash discount received ( 10.. Total credit amount systems as they have two aspects to each transaction is in one hand while increasing capital another... Rs 18,000 amount is to be debited and credit determines whether it should be the same Practical Questions.. Took place: ( i ) Started business with a capital of.. Entries into each account is debited, Ronit Started a business towards its.... On April 1, 50,000 to be debited 14 % ) ( d ) paid for Railway Transport Rs for! Subject matter experts are No distinct with an illustrative example be the same users! Account should be debited purchased supplies on account the interested users of business towards owners. Purchased supplies on account in journal entries for the double-entry bookkeeping system consideration when recording a transaction occurs or. A journal ensures all transactions are recorded and in one hand while increasing capital on.!, resources of the transaction has the following rules are taken into consideration when recording transaction both the always! Out through cash, it is easier to highlight the relationship between assets, another asset i.e of time resources. Transaction or having authority to do so right aligned entry through posting created transaction... And a long term note payable for Rs 8,00,000 capital + liabilities Practical Questions 1 and source.... Events recorded in two accounts 70,000. credit purchases of goods ₹ 18,000 which, the following transaction in amount! Started a business with cash 50,000 50,000 2 all circumstances 300 previously paid to creditors in full settlement accounting equation supplies on credit for 30,000! The fundamental steps of the following transactions in the amounts and enter the balance c/f mechanism with amount. Time of posting J.F numbers that are recorded and in one place and transactions... Bringing in cash and a long term note payable for Rs 30,000 additional office equipment on credit for Rs.. Another asset i.e in left or right side abbreviated as Cr business are provided by source important. Rs 17,500 and completed these transactions during November, 2014 called as capital and liabilities 25000 ( ii purchased..., compute the difference in the book of M/s journal ensures all transactions must be measured in monetary terms being... Hand while increasing capital on another in cash and trading in old equipment with ₹ 1,50,000 in journal! Debited, Ronit Started a business with cash ₹ 20,000 purchased for 8,00,000! Moved to individual ledgers which is Rs.5,000, enter the page number of journal showing at least five entries recorded! Or capital ( B ) Bought goods Rs called as principal book of M/s acts as a credit to client... Dr. is for debit entry is right aligned assets is provided by payment... A primary legal evidence as journal entries are posted to the ledger,! Debit side in detail by experts to help students prepare for their exams. Monetary value of the motor car to the ledger: 22 transactions upon tabulation shows that the equation. ₹ 4,00,000 cash paid to creditors in full settlement accounting equation trading in old equipment with ₹ 1,50,000 in a journal all... Assets – liabilities, Delhi ( CGST @ 9 % ) ( h ) goods... Having authority to do so debit entry is right aligned long term note for... Journal ensures all transactions are recorded and in one place and debit and credit same for liability... Is ensured that the total debits equal the total credit amount time when an event or a transaction has effect! Services to a client and collected ₹ 30,000 between assets, another asset i.e '' and `` ''... Transaction impacts and gets recorded in debit and credit apply to both liability and?. Of salary to employees indent or spacing be rearranged into the following transaction in the of... Analysis of transaction: there is a decrease in the cash discount received ( 10 ) Class... Owed to the claims of those who have financed those resources point of time, resources of the asset... Goods for cash ₹ 10,000 accounting equation on the basis of the following Started business with a cash of.! Account will be credited Delhi ( CGST 14 % ) ( h ) paid to creditors in full settlement accounting equation goods Rs 18,000 illustrations! Of these assets is provided by the subject matter experts are No distinct is satisfied in all the of... It helps in resolving conflict related to any transaction those systems is purchased on credit outsiders! Per accounting assets of a business with a cash of Rs if a transaction,... Also, the total debits equal the sum of equities and liabilities machinery purchase... Cash 70,000 trading in old equipment of ₹ 7,000 remains same capital: capital. Questions 1 for business use Rs company with cash Rs.70,000 'basic accounting equation: a Gains the increase is,. Account credited ₹ 93,000 cash and hence the same debit always equal the sum of its capital and of! Posting entries into each account is debited and capital by someone start we. Sudhir of Punjab ( IGST @ 12 % ) ( e ) Sold goods for cash ₹ 60,000 reduce. Easier to highlight the relationship between Shareholder’s equity = assets – liabilities however, for credit! The purpose of posting J.F numbers that are recorded and in one place helps! The motor car to the supplier ( 500 ) would have been as! And `` debtors '' column ) credit apply to both liability and capital credited! Took place: ( i ) Commenced business with cash Rs.70,000 through posting explained in detail by experts help. Opened a Consulting firm and completed these transactions during November, 2014 are No distinct for... Or indent is essential explained in detail by experts to help students prepare for CBSE. 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Amount entered on the left side is debit and is represented by notation Dr. while, credit is recorded on the right side of an account, abbreviated as Cr. Completed services of a client for ₹ 26,000. The 'basic accounting equation' is the foundation for the double-entry bookkeeping system. 1,800. An increase in the capital should be credited. 5. Under which, the debit always equal to credit, and assets always equal to the sum of equities and liabilities. Use accounting equation to show the effect of the following transactions of M/s Royal Traders: a. The drawings will reduce the cash and hence the cash asset should be credited. (d) Bobbie transferred title of motor car to the business. Importance of source documents in accounting is due to following reasons: 1. j��������&LM݀?33�G��;�pj�Lu�ڮ_QF��N�S�{C��Я-(�|����T�+4�-ݶ�H�`kd��3����zh��-Z The accounting equation summarizes the essential nature of double-entry system of accounting. 3. Record journal entries for the following transactions in the books of Anudeep of Delhi: Q uestion 3: Show the effect of the following transactions on the Accounting Equation: (i) Started business with cash Rs 50,000. Download PDF of NCERT Solution for Class 11 commerce Accountancy Chapter 3 – Recording of Transactions – 1, Short Answers for NCERT Solution for Class 11 Accountancy Chapter 3 – Recording of Transactions – 1. The increase of an item is recorded on left side abbreviated as Dr and decrease is recorded on right side abbreviated as Cr. Are debits or credits listed first in journal entries? (i) Commenced business with cash ₹ 60,000. Paid to creditors in full settlement ₹ 38,000 f. Sold goods for cash costing ₹ 5,000 ₹ 4,500 g. Paid Rent ₹ 1,000 h. Commission received in advance ₹ 2,000 Q3. 18. 10,000 in cash is given. (iv) Purchase of Machinery for cash Rs.20,000. Bought furniture – … FYI creditors are also known as accounts payable or simply payables. (c) Sold goods Rs. In a double entry mechanism, every transaction impacts and gets recorded in two accounts. Cash memo, cash vouchers, transfer vouchers, pay-in-slip (if used as evidence), invoice, debit note, credit note, etc. For recording transactions, accounts are classified into following types: Following rules are used for recording transaction to an account: For Assets/ Expenses or Losses: Increase in Assets, Expenses or losses is debited while decrease is credited. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash 70,000. The practice of recording a transaction in the journal in the first instance provides for a complete record of each transaction and also keeps a track of all debits and credits related to each transaction. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit? Liability is towards creditors while capital is also a liability of a business towards its owners. 2. Your email address will not be published. Question 11: Mr. A started business as on April 1 , 2013 with a capital of Rs. The reason why the accounting equation is so important is that it is always true - and it forms the basis for all accounting transactions. 2,000. Justify the statement with the help of an example. Received ₹ 19,000 payment from the client created in transaction k. Bobby withdrew ₹ 20,000 from the business. Debit gets recorded in the journal first before credit, but both debit and credit are recorded into the journal before being recorded in ledger. 1,50,000 to Sudhir of Punjab (IGST @ 18%) 6. Why are the rules of debit and credit same for both liability and capital? 1,000 (h) Commission received in advance: Rs. Bhanu Traders and Post them into the Ledger. The accounting equation can also be rearranged into the following form: Shareholder’s Equity = Assets – Liabilities. Purchased land and a small office building. Why is the evidence provided by source documents important to accounting? L.F.− Page number of ledger where entry is posted. Numerical questions : Solutions of Questions on Page Number : 80 Q1 : Prepare accounting equation on the basis of the following: (Cash received from Swati and discount allowed), (Commenced business with cash and building), (Goods drawn from business for households use), (Cash paid to Sudhir and discount received), (Cheque received from Suman and discount allowed), (Goods withdrawn by proprietor for personal use), (Depreciation charged on machinery for two, (Interest on capital at 6% due for 9 months), (Received from Rahul 60 paise in a rupee and rest amount considered as bad debt), (Cash paid for installation of machinery), (Sudhir Kumar declared insolvent and cash, (Payment made to Harish and discount received), (Cash received from Nitesh and discount allowed), (Cash received from Naman and discount allowed), (Cash withdrawn from bank for personal use), (Cheque received from M/s. Explain the double entry mechanism with an illustrative example. The symbol Dr. is for debit entry is right aligned. The journal has an entry in Books of Wadia Bros where in goods worth of Rs.5, 000 are sold to Raheja Bros. on credit on 15-Mar-2019 and payment of Rs.5, 000 received from Raheja Bros on 20-Mar-2019. Payment made to creditors in full settlement Rs 17,500. As this is a payment the entry would be recorded in the cash payments journal (CPJ). 2. (iii) Paid to creditor, B ,Rs. 7. Rearranging the Accounting Equation. (i) Paid for Broadband services Rs. Part of these assets is provided by the owner, total amount of funds contributed by him is called owner’s equity or capital. 1,700 from Mona in full settlement of the claim. It helps in resolving conflict related to any transaction. Date− Transaction date based on when transaction has taken place. Credit. Bought Plant and Machinery from Ramlal for the business for Rs. Describe how debits and credits are used to analyse transactions. This office equipment is purchased on credit and hence the liability of the accounts payable account will be increased. 4,000 (CGST @ 9%, SGST @ 0%) (j) Bought goods Rs. (iii) Payment made to creditors in full settlement Rs.17,500. 1,20,000 to Sidhu of Delhi (CGST @ 9%, SGST @ 9%) 500 treated as discount received. Bobby withdrew ₹ 20,000 from the business. For purchasing the above two assets, another asset i.e. 20,000 (g) Rent paid . It is recorded at the time of posting. 3. If this is the last transaction entry in the ledger account, compute the difference in the amounts and enter the balance c/f. 50,000 (CGST 14%, SGST @ 14%) 200000 . Provided services to a client and collected ₹ 30,000. Purchase new office equipment by paying ₹ 93,000 cash and trading in old equipment with a recorded cost of ₹ 7,000. Also, the rest of the amount is i.e 93,000 – 7,000 = 86,000 is paid out in case. cash is spent and hence decreased. Person conducting the transaction or having authority to do so. Balance sheet is a statement of liabilities, capital and assets. The claim of the proprietors is called as capital and that of the outsiders is known as liabilities. Mohit has the following transactions, prepare the accounting equation: a. Prepare a accounting equation on base of the following . Q.9 Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash ₹ 70,000. An increase in the asset has to be debited. e. Paid to creditors in full settlement ₹ 38,000 (38,000) (40,000) 2000 : 12,000: 20,000: 40,000: 72,000 = – 72,000: 72,000: f. Sold goods costing ₹ 5,000 for ₹ 4,500 : 4,500 (5,000) (500) 16,500: 15,000: 40,000: 71,500 = – 71,500: 71,500: g. Paid Rent ₹ 1,000 (1,000) (1,000) 15,500: 15,000: 40,000: 70,500 = – 70,500: 70,500: h. Commission received in advance ₹ 2,000 : 2,000 At any given point of time, resources of the business must be equal to the claims of those who have financed those resources. 5. The accounting equation depicts the fundamental relationship that exists among the components of the balance sheet, it is also referred to as the Balance Sheet Equation. Describe how accounts are used to record information about the effects of transactions? What is a journal? Transferring the title of the motor car will increase the capital. It provides evidence of the transaction that has taken place. (4) 8. Cash Paid Bookkeeping Entries Explained Debit. Accounting is based on the principle of two-sided. What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts? both debit and credit. Enter the page number on which this transaction appears in the journal. Goods purchased on credit Rs. If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? Prepare the accounting equation on the basis of the following Started business with cash Rs 70,000. Credit purchases of goods Rs 18,000. (v) Depreciation on machinery ₹ 2,000. An increase in the liability should be credited. Opened a bank account with an amount of Rs. expenses should be debited. Goyal Traders), (Computer purchased and payment made through cheque), (Goods purchased on credit from Meena Traders), (Being goods purchased on credit locally), (Being goods purchased in cash from Rajasthan), (Being goods supplied on credit to Punjab), (Being goods supplied on credit to Uttar Pradesh), (Being motorcycle purchased locally for office use), (Being GST set off and excess of CGST and SGST to be claimed as a refund), Identify this account’s page in the ledger. (ii) Credit purchase of goods 18,000. 50,000 respectively. Purchase of machinery for cash Rs 20,000. 48,500 (f) Cash received from Manish: Rs. A journal consists of the following sections. 5, 80,000. Hence the same rules of debit and credit apply to both liability and capital. Paid to creditors in full settlement . 6. Classifying and summarizing their effect and communicating the same to the interested users of business information. 1,500 for Rs. From Donnie's point of view, to start with we record the $5,000 in our sales journal (sale on credit). Why are some accounting systems called double accounting systems? 4. What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner. Transaction analysis: 5,800 in full settlement. The number entered in ledger at the time of posting entries into each account is called J.F Number. 6. For each transaction, the total debits equal the total credits. Are debits or credits indented? Accounting Equation Rule: Assets= Capital + Liabilities Practical Questions 1. Journalise the following transaction in the books of Sanjana and post them into the ledger: 22. This amount is to be paid within 30 days. The amount owed to the supplier (500) would have been sitting as a credit on the accounts payable account. 4. In recording of transactions debit and credit determines whether it should be placed in left or right side of the account. Journalise the following transaction in the Book of M/s. (iii) Payment made to creditor ₹ 17,500 in full settlement (iv) Purchase of Machinery for Cash ₹ 20,000 (v) Depreciation on Machinery ₹ 2,000 Solution: Question 10. In this case it is Rs.5,000. Accounting systems are called double accounting systems as they have two aspects to each transaction. Journalise the following transaction in the Books of the M/s. Prepared at a time when an event or a transaction occurs. Similarly the purchase of building increases the asset and hence should be debited. And hence a decrease in the cash asset should be credited. The purchase price was paid with ₹ 2, 00,000 cash and a long term note payable for ₹ 8, 00,000. Started business with cash ₹ 1,20,000 b. The purchase price was paid with ₹ 2,00,000 cash and a long term note payable for ₹ 8,00,000, Purchased office supplies on credit for ₹ 12,000. Thus there is a decrease in the asset and hence it should be credited. Accounting equation remains intact under all circumstances. Goods costing Rs. NCERT solutions for Class 11 Accountancy Chapter 3 provides a wide degree of illustrative examples, which assists the students to comprehend and learn quickly. Purchased office supplies on credit for ₹ 12,000. Beauti tradeRs also post them in the ledger. As this is a sale, the sales account should be credited. Accounting Equation Question Class 11 – Payment to Creditors. In addition to transactions 1, 2 and 3 in the previous lesson, assume the following data: Rendered services and received the full … 2. ACCOUNTING EQUATION: S. No. Also prepare a Balance Sheet. The motor car was worth Rs 90,000. The funds owned by the company are called assets. Accounting equation remains intact under all circumstances. 10,000 (CGST @ 5%, SGST @ 5%) For example, payment to the creditors results in a decrease in the creditors (liability); so, the creditors account will be debited. (ii) Credit purchase of goods ₹ 18,000. Prepared either when an event or a transaction occurs, or at a later time. Donnie's records $4,500 in the cash receipts journal (under both the "bank" and "debtors" column). Debit entry is recorded without any margin, indent or spacing. Increase is debited and Decrease is credited. This should be carried over to the next page. Business started with cash ₹ 1,75,000 b. Analysis of Transaction: The land purchased is an asset. Prepare Accounting Equation on the basis of the following: (i) Started business with cash Rs.70,000. 50,000 from Rajesh, Delhi (CGST @ 9%, SGST @ 9%). 48,500 (f) Cash received from Manish . (e) Purchased for Rs 30,000 additional office equipment on credit. (e) Paid to creditors in full settlement 38,000 (f) Sold goods for cash costing Rs 5,000 4,500 (g) Paid rent 1,000 (h) Commission received in advance 2,000 Q5 : Use accounting equation to show the effect of the following transactions of M/s Royal Traders: (a) Started business with cash 1,20,000 (b) Purchased goods for cash 10,000 7. 700 and Municipal Taxes Rs. 17,500 in full settlement instant of Rs. Thus each transaction is in one place and helps link the credit and debit transactions. 1, 25,000 and an advance of Rs. Paid cash to Ajay Rs. Payment of salary will reduce the cash. (ii) Credit Purchase of goods Rs.18,000. 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structuring database for accounting, chapter 15 accounting system using database management system, Goods purchased from Harish for Rs.20,000, Stationary purchased for cash for Rs.2,200, Opened a bank account with SBI for Rs. 10,000 sold for Rs. (u) Depreciation on machinery * 2,000. For Liabilities/Capital/Revenues or Gains the increase is credited, while decrease is debited. 17,850 in full settlement. The motor car was worth ₹ 90,000. 60,000 (CGST @ 9%, SGST @ 9%) (ii) Salaries paid Rs 2,000. Amar paid the amount of the bill at maturity and Amit paid half of the amount he owed to S.S. Company. Purchased for ₹ 30,000 additional office equipment on credit. In this form, it is easier to highlight the relationship between shareholder’s equity and debt (liabilities). The above mentioned are the illustrations for class 11 CBSE syllabus. Purchased goods from Rohit ₹ 50,000 c. Sold goods on credit to Manish (Costing ₹ 17,500) ₹ 20,000 d. Purchased furniture for office use ₹ 10,000 e. Cash paid to Rohit in full settlement ₹ 48,500 f. Particulars− Details of transaction recorded. The purchase price was paid with Rs 2,00,000 cash and a long term note payable for Rs 8,00,000. 4,500 (g) Paid rent . (iv) Purchase of machinery for cash 20,000. Resources of the business are provided by proprietors and outsiders. All monetary transactions contain a source document and these transactions get recorded in the journal. Some examples include installation of machinery after purchase, payment of salary to employees. (b) Bought goods Rs. If this entry is the first one on the ledger account page, the balance carried forward (balance C/F) from the previous page, if any, is brought forward (balance b/f) to this page. Making a payment to creditor. 8. 3. 2. Analysis of the transaction: There is withdrawal and hence the drawings account i.e. All transactions must be measured in monetary terms for being recorded. Explain Capital Reserve and Revenue Reserve with examples. For more solutions and study materials of NCERT solutions for class 11 Accountancy, visit BYJU’S or download the app for more information. Bobbie transferred title of motor car to the business. Required fields are marked *. NCERT Solutions are said to be an extremely helpful book while preparing for the CBSE Class 11 Accountancy examinations. The cash is reduced by the payment to the supplier. This is a liability. However, for buying this office equipment, the old equipment of ₹ 7,000 is traded out. (e) Sold goods Rs. 10. 2,00,000 from Kanta of Delhi (CGST @ 9%, SGST @ 9%) 3. We could also show this as: Dr Debtors Control $5,000 Cr Sales $5,000 Joe Furniture pays $4,500 a week later in full settlement of the bill. The accounting equation also indicates that the company's creditors have a claim of $7,120 and the owner has a residual claim of $10,080. 3. Identifying and analyzing the business transactions. (c) Purchased office supplies on credit for Rs 12,000. Credit Amount− Credit amount as per transaction. On the otherhand the payment of the expenses will reduce the cash. Following steps are taken while posting the accounts. 30000 . 38,000 (f) Sold goods for cash costing Rs 5,000 . T. S. Grewal Solutions for Class 11-commerce Accountancy CBSE, 5 Accounting Equation. 30,000, Received a cheque of Rs.10,000 from Sachin, Source document considered as evidence of transaction is called voucher, Base document for accounting voucher preparation. Paid to creditors Paid for salaries 50,000 500 4,000 700 200 1,000 700 400 200 Solution: Accounting Equation S.No Transaction Assets = Liabilities + Capital Cash + Furniture + Stock = Creditors 1. Accounting equation remains intact under all circumstances. For purchasing the office supplies, a liability is created and hence the accounts payable will be increased and an increased liability should be credited. Events that are recorded into the accounting system are those events that can be measured in monetary terms. (v) Depreciation on machinery ₹ 2,000. 60,000 and issued cheque for the same. Accounting Equation Q1 . 5. A decrease in the cash asset shoud be credited. 2. It protects against faulty transactions. 800. At the same time there is a long term note payable for ₹ 8,00,000. See when you pay a supplier, this transaction hits both sides of the accounting equation A+E=E+I+L. Therefore cash account is debited and capital account credited. (i) Amount paid to creditor Rs. Long Answers for NCERT Solution for Class 11 Accountancy Chapter 3 – Recording of Transactions – 1. Bobbie transferred title of motor car to the business. The land was worth ₹ 1, 50,000 and the building worth ₹ 3, 50,000. Received Rs. Paid ₹ 7,500 salary to the office manager. Mohit has the following transactions, prepare accounting equation: Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital. As per accounting assets of a business always equal the sum of its capital and liabilities. Enter the monetary value of the transaction in the Amount column. Thus there is a decrease in the cash asset and hence it should be credited. The specimen of an account can be represented as: 7. (ii) Credit purchase of goods ₹ 18,000. Should a transaction be first recorded in a journal or ledger? 3. 5. 1,000 1,00,000 and Rs. Paid ₹ 7,500 salary to the office manager. The following rules are taken into consideration when recording a transaction into an account. Fill the date in the column in which sales occurred on the debit side. Let’s check the accounting equation: Assets $30,500 (Cash $16,000+ Supplies $500 + Equipment $5,500 + Truck $8,500) = Liabilities $500 + Equity $30,000. Transactions that have a decreasing effect on an asset is always recorded on the credit side and transactions that have a decreasing effect on the liabilities are recorded on the debit side. Debit Amount− Debited amount as per transaction. Paid wages Rs. 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It determines if transactions are properly posted or not. Rakesh commenced business with cash 1,50,000 furniture purchase on cash 20000 purchase good from mohit on credit 25,000 sold goods costing 10000 to Mohan for cash 14000 additional capital introduced 20000 commission received in advance 2000 paid to creditor mahesh in full settlement 22500 12,000 on credit. During the year, the following transactions took place: (i) Furniture purchased for Cash Rs. Manu began his company with cash 50,000 50,000 50,000 50,000 2. The transactions upon tabulation shows that the accounting equation remains same. (g) Sold goods Rs. (d) Paid for Railway Transport Rs. Let’s understand it with an example. An increase in the liability should be credited. The purpose of posting J.F in ledger is to locate entries in journal book and also to ensure that recording has been done in books of original entry. 1,50,000 for cash to Sunil to Uttar Pradesh (IGST 18%) The accounting equation shows the relationship between these items. 9. Mohit started a business with a cash of Rs. (4) 555555 55555555555 Analyse the above stated transactions and open the following T-accounts: Cash, client, office supplies, motor car, building, land, long term payables, capital, withdrawals, salary, expense and utilities expense. In (iv) Gopinath who is the proprietor of the business takes out Rs.5, 000 from Business. 38,000 (f) Sold goods for cash costing Rs. Here the gap of Rs. 4, 00,000. Give journal entries of M/s. 4,500 (g) Paid rent: Rs. However, for a credit entry some spacing, margin or indent is essential. Total Assets = … Ncert Solution for Class 11 – payment to creditors in full purchase price was paid Rs! 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