Important Journal Entries.

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Important Journal Entries



1. Capital withdrawn permanently from the Business for personal use
 ₹1, 00,000.
2. A Dinning Table (part of Furniture) ₹20,000 was taken by owner for personal use against his capital. 
3. Received goods through V.P.P( value payable post) worth ₹5,000.
4. Received a V.P.P from Narayan shop for rupees ₹890 and sent a worker to collect it who paid rupees ₹10 as cartage. 
5. Sold goods costing ₹50,000 at a profit of 10%.
6. Rent paid ₹10,000 and rent ₹ 2,000 outstanding for 2 months. 
7. Salary paid ₹ 15,000 which includes advance salary ₹3,000.
8. Goods taken by proprietor for personal use costing ₹10,000 (sale price 12,000).
9. Income Tax paid by using bank account of business ₹14,000.
10. Interest on capital provided on ₹10,00,000 @10%.
11. Interest on drawing charge ₹500.
12. Refund of income tax ₹40,000.
13. Interest received on surplus income tax ₹3,000.
14. Paid expenses on behalf of our customer Mr. Narayan ₹300.
15. Paid to Raj on behalf of Narayan ₹5000.




There are some transactions which are not recorded in the journal be careful while dealing with such transaction see the following examples:

1. Receive free samples from various parties values ₹5000.
2. Sold household furniture for ₹50000 by the proprietor. 
3. Received an order for goods from Raj traders for ₹50,000.
4. Purchase of car for personal use for ₹10,00,000 and sold old car for 4,00,000 and sold personal jewellery for ₹6,00,000 for the arrangement of cash(Business cash is not involved) 
5. Mr Punit is appointed as an accountant for an annual salary of ₹10,00,000.
6. Transactions which are related to business but cannot be measured in terms of money. 




Purchase of account is used only for the purchase of goods and not for the purchase of assets are other items for example:
1. Purchase of goods will be recorded through purchase account. 
2. Purchase of stationary will be recorded through stationary account. 
3. Purchase of assets will be recorded through assets account. 




Whenever suffix or prefix is added to any nominal account it becomes personal account. For example, rent paid is nominal account but when suffix or prefix is added to it, it becomes personal account, mean to say, 'outstanding' or 'prepaid words'. 
For example outstanding rent and prepaid rent are personal account 





Important Journal Entries (solution)

1. capital A/c       ...........Dr.     1,00,000
             To cash A/c                                  1,00,000
( Being capital withdrawn) 
2. Capital A/c  ...............Dr.        20,000
            To Furniture                                    20,000
(Being decrease in capital)
3. purchase A/c ............Dr.         5,000
           To cash/bank                                     5,000
( Being goods received through V.P.P)
4. Purchase A/c ................Dr.             890
    Cartage   A/c ................Dr               10
            To cash/bank                                             900
( Being V.P.P received and cartage paid)
5. Cash A/c .......................Dr.          5,500
             To sales A/c                                              5,500
( Being goods sold at a profit of 10%)
6. Rent A/c .......................Dr      12,000
              To cash A/c                                           10,000
              To rent outstanding                               2.000
(rent paid 10,000 for 10 months)
7. Salary A/c ....................Dr.       12,000
    prepaid salary A/c         Dr.        3,000
               To cash A/c                                             15,000
( Being salary paid )
8. Drawings A/c ...............Dr.       10,000
             To purchase A/c                                 10,000
( Being goods taken for personal use)9. Drawings A/c ...............Dr.      14,000
             To Bank  A/c                                       14,000
(Being income tax paid) 
10.Interest on capital  A/c ...............Dr.     1,00,000
             To Capital  A/c                                               1 ,00,000
( Being interest on capital provided)
11. Capital  A/c ...............Dr.                           500
             To Interest on drawings  A/c                                500
( Being interest on Drawings charged)
12. Cash A/c ......................Dr.                40,000
            To capital A/c                                                40,000
( Being income tax received and again invested in business)
13. Cash A/c ......................Dr.                         40,000
            To capital A/c                                                     40,000
( Being income tax received and again invested in business)
14. Narayan's A/c ..................Dr.            300
            To cash A/c                                                 300
( Being expenses on behalf of our customer Mr. Narayan)15. Narayan's A/c ..................Dr.           5000
            To cash A/c                                                 5000
( being paid to raj on behalf of narayan)







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