Accounting Package - Tally

Basic concept of accounting

Accounting : It is an art of recording, classifying and summarizing in significant manner and in terms of
money, transactions and events which are of financial character and interpreting the results thereof.
Business Transaction : A business transaction is “The movement of money and money’s worth form
one person to another”. Or exchange of values between two parties is also known as “Business
Transaction”.
Purchase : A purchase means goods purchased by a businessman from suppliers.
Sales : Sales is goods sold by a businessman to his customers.
Purchase Return or Rejection in or Outward Invoice : Purchase return means the return of the full or a
part of goods purchased by the businessman to his suppliers.
Sales Return or Rejection out or Inward Invoice : Sales return means the return of the full or a part of
the goods sold by the customer to the businessman.
Assets : Assets are the things and properties possessed by a businessman not for resale but for the use
in the business.
Liabilities : All the amounts payable by a business concern to outsiders are called liabilities.
Capital : Capital is the amount invested for starting a business by a person.
Debtors : Debtor is the person who owes amounts to the businessman.
Creditor : Creditor is the person to whom amounts are owed by the businessman.
Debit : The receiving aspect of a transaction is called debit or Dr.
Credit : The giving aspect of a transaction is called credit or Cr.
Drawings : Drawings are the amounts withdrawn (taken back) by the businessman from his business for
his personal, private and domestic purpose. Drawings may be made in the form cash, goods and assets
of the business.
Receipts : It is a document issued by the receiver of cash to the giver of cash acknowledging the cash
received voucher.
Account : Account is a summarized record of all the transactions relating to every person, every thing or
property and every type of service.
Ledger : The book of final entry where accounts lie.
Journal entries : A daily record of transaction.
Trail Balance : It is a statement of all the ledger account balances prepared at the end of particular
period to verify the accuracy of the entries made in books of accounts.
Profit : Excess of credit side over debit side.
Profit and loss account : It is prepared to ascertain actual profit or loss of the business.
Balance Sheet : To ascertain the financial position of the business. It is a statement of assets and
liabilities.

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Accounting Package - Tally

Types of accounts
Personal account: Personal accounts are the accounts of persons, firms, concerns and institutions
which the businessmen deal.
Principles: Debit the receiver
Credit the giver
Real Account: These are the accounts of things, materials, assets & properties. It has physical
existence which can be seen & touch.
Ex. Cash, Sale, Purchase, Furniture, Investment etc.
Principles: Debit what comes in
Credit what goes out
Nominal account: Nominal account is the account of services received (expenses and Losses) and
services given (income and gain)
Ex. Salary, Rent, Wages, Stationery etc.
Principles: Debit all expense/losses
Credit all income/ gains
Tally is a complete business solution for any kind of Business Enterprise. It is a full fledged accounting
software.
Procedure for creating company in Tally
Double click on Tally icon on desktop. Alt+F3 Company info-Create company.
Accounts Only : To maintain only the financial accounts of the company. Inventory (stock) management
is not involved in it.
Account with Inventory : This is the default option, which allows maintaining both the financial account
of the company as well as the inventory of the company.
Select Company : We can choose the company which is already created. Shortcut key - F1.
Shut Company : It is used to close the company which is opened. Shortcut key - Alt+F1.
Alter : It is used to make alterations in the company creation like name, date, maintain etc.
Quit : Exits from Tally. 1. Click on quit button.
2. Esc, Esc, Esc and enter.
3. Ctrl+Q

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Short cut keys

Alt+F3 Company information menu
Enter To accept information typed into a field.
To accept a voucher or master.
To get a report with further details of an item in a report.
Esc To remove what has been typed into a field.
To exit a screen.
To indicate you do not want to accept a voucher or master.
Ctrl+A To accept a form wherever you use the key combination the screen or report will be
accepted as it is on this screen.
Ctrl+Q It quits the screen without making any changed to it.
Alt+C To create a master at a voucher screen.
When working within an amount field presses Alt+C to act as a calculator.
Alt+D To delete a voucher.
To delete a master.
Ctrl+Enter To alter a master while making an entry or viewing report.
F2 Date
Alt+F2 Change period
Alt+F1 To see detail
F11 Features company
F12 Configuration options are applicable to all the companies in a data directory.
Ctrl+N Calculator screen.
Ctrl+V Voucher mode (Cr. Dr)
Invoice mode (name of item, rate, quantity, and amount)

Gateway of tally-Accounts info-Group

Bank account Direct income
Bank Od account Indirect expense
Branch/division Indirect income
Capital account Duties and tax
Cash in hand Fixed asset
Current asset Investment
Current liability Loans and advance
Deposit Loan (liability)
Direct expenses Miscellaneous expenses

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Accounting Package - Tally

Provisions Stock in hand

Retained earning Sundry debtor’s
Reserves and surplus Sundry creditors
Purchase account Suspense
Sales account Unsecured account
Secured loan

Meaning:
Current asset : It is converted into cash with in a year. Ex. Bills receivable
Direct expenses : These are the expenses which are directly related to manufacturing of goods.
Ex. Wages, factory rent, heating, lighting etc
Indirect expense : These are the expenses which are indirectly related to manufacturing of goods.
Ex. Salary, rent, stationery, advertisement, printing
Depreciation : Decrease the value of the asset.
Sundry debtors : The person who is the receiver or customer
Sundry creditors : The person who gives or supplier.
Expenses Outstanding or Unpaid expenses or Expenses due : Expenditure incurred during current
year but the amount on which is not yet paid. (Added to the expenditure on the debit side and entered on
the liability side.)
Income received in advance or Income received but not earned
Income received during the current year but not earned or a part of which relates to the next year.
(Deducted form the concerned income on the credit side and entered on the liability side)
Prepaid advance or Expenses or Prepaid expenses
Expenditure paid during current year but not incurred or a part of which relates to the next year is called
expenditure prepaid. (Deducted form the concerned expenditure on the debit side and entered on the
assets side)
Income outstanding or income earned but not received or Income accrued
Income outstanding means income earned during the current year but the amount on which is not yet
received (added to the concerned income on the credit side and entered on the asset side)
Gateway of Tally-Accounts info-ledger-create

Ledger Group Direct

Fright charges
expenses
Opening stock Stock in hand
Direct
Purchase Carriage inwards or Purchases
Purchase expenses
account
Direct
Purchase Cartage and coolie
expenses
Purchase return account
Direct
Octroi
expenses

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Accounting Package - Tally

Direct Indirect
Manufacturing wages Sundry expenses
expenses expenses

Indirect
Discount allowed
Direct expenses
Coal, gas, water
expenses
Indirect
Carriage outwards or sales
Direct expenses
Oil and fuel
expenses
Indirect
Traveling expenses
Factory rent, insurance, Direct expenses
electricity, lighting and heating expenses
Indirect
Advertisement
Sales Sales account expenses

Indirect Indirect
Salary Bad debts
expenses expenses

Indirect Indirect
Postage and telegrams Repair renewals
expenses expenses

Indirect Indirect
Telephone charges Motor expenses
expenses expenses

Indirect Indirect
Rent paid Depreciation on assets
expenses expenses

Indirect Indirect
Rates and taxes Interest on investment received
expenses income

Indirect Indirect
Insurance Interest on deposit received
expenses income

Indirect Indirect
Audit fees Interest on loans received
expenses income

Indirect Indirect
Interest on bank loan Commission received
expenses income

Indirect Indirect
Interest on loans paid Discount received
expenses income

Indirect Indirect
Bank charges Rent received
expenses income

Indirect Indirect
Legal charges Dividend received
expenses income

Indirect Indirect
Printing and stationery Bad debts recovered
expenses income

Indirect
Profit by sale of assets
income
Indirect
General expenses
expenses Indirect
Sundry income
income

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Loan Land and building Fixed asset

Loan from others
Liabilities
Leasehold property Fixed asset
Loan
Bank loan Patents Fixed asset
Liabilities

Bank overdraft Bank OD Goodwill Fixed asset

Current Prepaid expenses Current asset

Bills payable
Liabilities
Income outstanding Current assset
Sundry
Sundry creditors
creditors

Mortgage loans Secured loans

Current
Expense outstanding
Liabilities

Current
Income received in advance
Liabilities

Current
Other liabilities
Liabilities

Capital
Capital
account

Capital
Drawings
account

Cash in hand Cash in hand

Cash at bank Bank account

Fixed deposit at bank Deposit

Investments Investments

Bills receivable Current asset

Sundry
Sundry debtors
debtors

Closing stock Stock in hand

Stock of stationery Current asset

Loose tools Fixed asset

Fixtures and fittings Fixed asset

Furniture Fixed asset

Motor vehicles Fixed asset

Plant and machinery Fixed asset

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Accounting Package - Tally

Trading account : Buying and selling of goods.

Dr. Receiving aspect Giving aspect Cr.

Direct expenses Amount Direct Income Amount

To Opening stock xxx By Sales xxx

To Purchases xxx By (-)Sales return xxx

To (-)purchase return xxx By Closing stock xxx

To Freight charges xxx

To Cartage and coolie xxx

To Lorry hire xxx

To Manufacturing expenses xxx

To Wages xxx

To Factory rent, fuel power xxx

To Gross profit (transfer to profit

xxx
and loss account)

To Profit and loss account : Actual profit and loss of the business

Indirect expenses or payments Amount Indirect income or receipts Amount

To Salary xxx By Gross profit xxx

To Postage and Telegram xxx By Interest on investment received xxx

To Telephone charges xxx By Interest on deposit received xxx

To Rent paid xxx By Interest on loans received xxx

To Rate and taxes xxx By Discount received xxx

To Insurance paid xxx By Discount received xxx

To Interest on bank loan xxx By Rent received xxx

To Bank charges xxx By Bad debts received xxx

To Printing and stationery xxx By Net loss xxx

To Discount allowed xxx

To Advertisement

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To Carriage outward (sales)

To Depreciation on assets

To General expenses

To Traveling

To Bad debts

To Net profit

Balance sheet: Actual financial position

Liabilities Amount Assets Amount

Bank loan xxx Cash in hand xxx

Bank overdraft xxx Cash at bank xxx

Bills payable xxx Fixed deposit at bank xxx

Sundry creditors xxx Investments xxx

Expenses outstanding xxx Bills receivable xxx

Capital xxx Sundry debtors xxx

(-)drawings xxx Closing stock xxx

Net profit xxx Stock of stationery xxx

Furniture xxx

Plant machinery xxx

Land and building xxx

Motor vehicles xxx

Prepaid expenses xxx

Income outstanding xxx

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F4 Contra: Records funds transfer between cash and bank accounts.

Deposit into bank or Opened bank account Cr. Cash
Dr. Bank
Withdraw form bank Cr. Bank
Dr. Cash

F5 Payment: Record all bank and cash payments.

Paid or Give Dr.
Cr. Cash/bank (in case cheque)

F6 Receipt: Records all receipts into bank or cash accounts.

Received or Borrow or Take Cr.
Dr. Cash/bank (in case cheque)

F7 Journal: Records adjustments between ledger accounts.

F8 Sales: Records all sales.

Dr. Cash/party (incase of credit-party)
Cr. Sales

F9 Purchase: Records all purchase.

Cr. Cash/party (incase of credit-party)
Dr. Purchase

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 Accounting Package - Tally

Class Room Assignment No.1:-

0B

Create a company Milan Trade for the year 2009-10, and pass necessary Journal Entries
Journalize the following transactions
1. Commenced business with cash Rs.10, 000.
2. Deposit into bank Rs. 15,000
3. Bought office furniture Rs.3,000
4. Soled goods for cash Rs.2,500
5. Purchased goods form Mr X on credit Rs.2,000
6. Soled goods to Mr Y on credit Rs.3,000
7. Received cash form Mr. Y on account Rs.2,000
8. Paid cash to Mr X Rs. 1,000
9. Received commission Rs. 50
10. Received interest on bank deposit Rs. 100
11. Paid into bank Rs. 1,000
12. Paid for advertisement Rs.500
13. Purchased goods for cash Rs. 800
14. Sold goods for cash Rs. 1,500
15. Paid salary Rs. 500
Gateway of tally-Account info-Ledger-Create Gateway of tally – Accounting voucher

Sl. Type of
No Key Voucher Ledger Group account Principles Amount
Cr. Capital Capital account Personal Giver 10,000
1 F6 Receipt Dr. Cash Cash in hand Real Comes in 10,000
Cr. Cash Cash in hand Real Goes out 15,000
2 F4 Contra Dr. Bank Bank account Real Comes in 15,000
Dr. Office
furniture Fixed asset Real Comes in 3,000
3 F5 Payment Cr. Cash Cash in hand Real Goes out 3,000
Dr. Cash Cash in hand Real Comes in 2,500
4 F8 Sales Cr. Sales Sales account Real Goes out 2,500

Cr. X Sundry creditor Personal Giver 2,000

Purchase
5 F9 Purchase Dr. purchase account Real Comes in 2,000
Dr. Y Sundry debtors Personal Receiver 3,000
6 F8 Sales Cr. Sales Sales account Real Goes out 3,000
Cr. Y Giver 2,000
7 F6 Receipt Dr. cash Cash in hand Real Comes in 2,000
Dr. X Receiver 1,000
8 F5 Payment Cr. Cash Cash in hand Real Goes out 1,000

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Credit all
Cr. Commission Indirect income Nominal income 50
9 F6 Receipt Dr. cash Cash in hand Real Comes in 50
Cr. Interest on Credit all
bank deposit Indirect income Nominal income 100
10 F6 Receipt Dr. Bank Bank account Real Comes in 100
Cr. Cash Cash in hand Real Goes out 1,000
11 F4 Contra Dr. Bank Bank account Real Comes in 1,000
Dr. Indirect Debit all
Advertisement expenses Nominal expenses 500
12 F5 Payment Cr. Cash Cash in hand Real Goes out 500
Cr. Cash Cash in hand Real Goes out 800
Dr. purchase Purchase
13 F9 Purchase Cr cash account Real Comes in 800
Dr. cash Cash in hand Real Comes in 1,500
14 F8 Sales Cr. Sales Sales account Real Goes out 1,500
Debit all
Dr. salary Indirect expense Nominal expenses 500
15 F5 Payment Cr. Cash Cash in hand Real Goes out 500

Lab Assignment No.1.1:-

1B

Create a company ‘InfoSoft Pvt. Ltd.’ On 1-4-2006.

Pass the Journal Entry for the following transactions:-
1. Commenced business with Rs. 15000, goods of Rs. 3000 & Building Rs. 12000.
2. Purchase goods for Rs. 1000.
3. Sold goods to Pallavi for Rs. 15000.
4. Sold goods for Rs. 2000.
5. Paid office rent Rs. 200.
6. Paid cash to Dhanashi Rs. 500.
7. Received Commission Rs. 100.
8. Returned goods by Pallavi of Rs. 150.
9. Withdrawn Rs. 2000 for personal use.
10. Purchase Furniture for Rs. 10000.
11. Borrowed from Bank Rs. 8000.
12. Paid carriage on behalf of Sudesh Rs. 30.
13. Sold Building of Rs. 8000 for Rs. 7500.
14. Depreciation charged on all the assets @ 5% p.a.
15. Repaid loan to bank Rs. 3400.
16. Goods purchase from Kanji worth Rs. 1500.
17. Purchase Motor Car worth Rs. 8000 in exchange of Furniture worth Rs. 10000.
18. Sold half of the goods purchase from Kanji to Kalidas, getting profit of Rs. 15 on each Rs. 100.

Page 11 of 90
 Journal entry
Date Particulars L.F. Debit ` Credit `
Keerthana A/c Dr. 5,000
To Cash A/c 4,800
To Discount received A/c 200
(Paid Keerthana in full settlement)

Example 13

Transaction: Dinesh, a customer is declared insolvent and 40 paise in a rupee is received from
the estate for his due ` 10,000.
Analysis: This is a cash transaction as cash is involved.
Accounts Nature of How affected in Debit /
Transaction
involved accounts business Credit
Dinesh who owed ` 10,000, Cash A/c Real A/c Cash comes in Debit
became insolvent and 40 paise
Bad debts A/c Nominal A/c Bad debts is a loss Debit
in a rupee is received from his
estate Dinesh A/c Personal A/c Dinesh is the giver Credit

Journal entry
Date Particulars L.F. Debit ` Credit `
Cash A/c Dr. 4,000
Bad debts A/c Dr. 6,000
To Dinesh A/c 10,000
(Cash received in final settlement on insolvency)

Tutorial note
Though the procedure for analysis of transactions, classification of accounts and rules for
recording transactions under accounting equation approach and traditional approach are
different, the accounts affected and entries in affected accounts remain the same under both
approaches. In other words, accounts to be debited and credited to record the dual aspect
remain the same under both the approaches.

Illustration 8

Jeyaseeli is a sole proprietor having a provisions store. Following are the transactions during
the month of January, 2018. Journalise them.

Jan. `

1 Commenced business with cash 80,000

2 Deposited cash with bank 40,000
58
 3 Purchased goods by paying cash 5,000
4 Purchased goods from Lipton & Co. on credit 10,000
5 Sold goods to Joy and received cash 11,000
6 Paid salaries by cash 5,000
7 Paid Lipton & Co. by cheque for the purchases made on 4th Jan.
8 Bought furniture by cash 4,000
9 Paid electricity charges by cash 1,000
10 Bank paid insurance premium on furniture as per standing instructions 300
Solution

In the books of Jeyaseeli

Journal entries
Date Particulars L.F. Debit ` Credit `
2018
Jan. 1 Cash A/c Dr. 80,000
To Jeyaseeli’s Capital A/c 80,000
(Jeyaseeli commenced business with cash)

2 Bank A/c Dr. 40,000

To Cash A/c 40,000
(Deposited cash into bank)

3 Purchases A/c Dr. 5,000

To Cash A/c 5,000
(Goods purchased by cash)

4 Purchases A/c Dr. 10,000

To Lipton & Co. A/c 10,000
(Goods purchased on credit)

5 Cash A/c Dr. 11,000

To Sales A/c 11,000
(Cash sales made)

59
 6 Salaries A/c Dr. 5,000
To Cash A/c 5,000
(Salaries paid)

7 Lipton & Co. A/c Dr. 10,000

To Bank A/c 10,000
(Payment made by cheque)

8 Furniture A/c Dr. 4,000

To Cash A/c 4,000
(Furniture bought for cash)

9 Electricity charges A/c Dr. 1,000

To Cash A/c 1,000
(Electricity charges paid)

10 Insurance premium A/c Dr. 300

To Bank A/c 300
(Insurance premium on furniture paid)

Illustration 9

Ananth is a trader dealing in textiles. For the following transactions, pass journal entries for
the month of January, 2018.
Jan. `

1 Commenced business with cash 70,000

2 Purchased goods from X and Co. on credit 30,000
3 Cash deposited into bank 40,000
4 Bought a building from L and Co. on credit 95,000
5 Cash withdrawn from bank for office use 5,000
6 Cash withdrawn from bank for personal use of Ananthu 4,000
7 Towels given as charities ,3000
8 Shirts taken over by Ananth for personal use 12,000
9 Sarees distributed as free samples 3,000
10 Goods (table clothes) used for office use 200
60
Solution

In the books of Ananth

Journal entries
Date Particulars L.F. Debit ` Credit `
2018
Jan. 1 Cash A/c Dr. 70,000
To Ananth’s capital A/c 70,000
(Commenced business with cash)
2 Purchases A/c Dr. 30,000
To X and Co. A/c 30,000
(Credit purchases made)
3 Bank A/c Dr. 40,000
To Cash A/c 40,000
(Cash deposited into bank)
4 Buildings A/c Dr. 95,000
To L and Co. A/c 95,000
(Building bought on credit)
5 Cash A/c Dr. 5,000
To Bank A/c 5,000
(Cash withdrawn from bank for office use)
6 Drawings A/c Dr. 4,000
To Bank A/c 4,000
(Cash withdrawn from bank for personal use)
7 Charities A/c Dr. 3,000
To Purchases A/c 3,000
(Goods given for charities)
8 Drawings A/c Dr. 12,000
To Purchases A/c 12,000
(Goods taken over for personal use)
9 Sales promotion A/c Dr. 3,000
To Purchases A/c 3,000
(Goods distributed as free samples)
10 Office expenses A/c Dr. 200
To Purchases A/c 200
(Goods used for office use)
61
Illustration 10

Arun is a trader dealing in automobiles. For the following transactions, pass journal entries
for the month of January, 2018
Jan. `
1 Commenced business with cash 90,000
2 Purchased goods from X and Co. on credit 40,000
3 Accepted bill drawn by X and Co. 20,000
4 Sold goods to D and Co. on credit 10,000
5 Paid by cash the bill drawn by X and Co.
6 Received cheque from D and Co. in full settlement
and deposited the same in bank 9,000
7 Commission received in cash 5,000
8 Goods costing ` 40,000 was sold and cash received 50,000
9 Salaries paid in cash 4,000
10 Building purchased from Kumar and Co. for ` 1,00,000 and an
advance of ` 20,000 is given in cash
Solution

In the books of Arun

Journal entries

Date Particulars L.F. Debit ` Credit `

2018
Jan. 1 Cash A/c Dr. 90,000
To Arun’s capital A/c 90,000
(Arun commenced business with cash)
2 Purchases A/c Dr. 40,000
To X and Co. A/c 40,000
(Credit purchases made)
3 X and Co. A/c Dr. 20,000
To Bills payable A/c 20,000
(Bill drawn by X and Co. accepted)
4 D and Co. A/c Dr. 10,000
To Sales A/c 10,000
(Goods sold on credit)

62
 5 Bills payable A/c Dr. 20,000
To Cash A/c 20,000
(Bills payable paid)

6 Bank A/c Dr. 9,000

Discount A/c Dr. 1,000
To D and Co. A/c 10,000
(Cheque received from D and Co. in full settlement)

7 Cash A/c Dr. 5,000

To Commission A/c 5,000
(Commission received in cash)

8 Cash A/c Dr. 50,000

To Sales A/c 50,000
(Cash sales made)
9 Salaries A/c Dr. 4,000
To Cash A/c 4,000
(Salaries paid in cash)
10 Buildings A/c Dr. 1,00,000
To Cash A/c 20,000
To Kumar and Co. A/c 80,000
(Building bought by giving advance money)

Illustration 11

Bragathish is a trader dealing in electronic goods who commenced his business in 2015. For
the following transactions took place in the month of March 2018, pass journal entries.
March `

1. Purchased goods from Y and Co. on credit 60,000

2. Sold goods to D and Co. on credit 30,000
.3 Paid Y and Co. through bank in full settlement 58,000
4. D and Co. accepted a bill drawn by Bragathish 30,000
5. Sold goods to L on credit 20,000
6. Sold goods to M on credit 40,000
7. Received a cheque from M in full settlement
and deposited the same to the bank 93,000
8. Goods returned to Y and Co. 4,000
63
 9. L became insolvent and only 90 paise
per rupee is received by cash in final settlement
10. Goods returned by M 3,000
Solution

In the books of Bragathish

Journal entries
Date Particulars L.F. Debit ` Credit `
2018
March 1 Purchases A/c Dr. 60,000
To Y and Co. A/c 60,000
(Goods purchased on credit)
2 D and Co. A/c Dr. 30,000
To Sales A/c 30,000
(Credit sales made to D and Co.)
3 Y and Co. A/c Dr. 60,000
To Bank A/c 58,000
To Discount received A/c 2000
(Payment made to Y and Co. and discount received)
4 Bills Receivable A/c Dr. 30,000
To D and Co. A/c 30,000
(Bills received from D and Co.)
5 L A/c Dr. 20,000
To Sales A/c 20,000
(Goods sold on credit to L)
6 M A/c Dr. 40,000
To Sales A/c 40,000
(Goods sold on credit to M)
7 Bank A/c Dr. 39,000
Discount allowed A/c Dr. 1000
To M A/c 40,000
(Cheque received and discount allowed)
8 Y and A/c Dr. 4,000
To Purchases returns A/c 4,000
(Goods returned to Y and Co.)
9 Cash A/c (20,000 × 0.9) Dr. 18,000
Bad debts A/c Dr. 2,000
To L A/c 20,000
(Cash received from L in final settlement)
10 Sales returns A/c Dr. 3,000
To M A/c
(Goods returned by M) 3,000
64
Illustration 12

Valluvar is a sole trader dealing in tex

t iles. From the following transactions, pass journal
entries for the month of March, 2018.
March `

1 Commenced business with cash 90,000

with goods 60,000
2 Purchased 20 readymade shirts from X and Co. on credit 10,000
3 Cash deposited into bank through Cash Deposit Machine 30,000
4 Purchased 10 readymade sarees from Y and Co. by cash 6,000
5 Paid X and Co. through NEFT
6 Sold 5 sarees to A and Co. on credit 4,000
7 A and Co. deposited the amount due in Cash Deposit Machine
8 Purchased 20 sarees from Z & Co. and paid through debit card 12,000
9 Stationery purchased for and paid through net banking 6,000
10 Bank charges levied 200
Solution

In the books of Valluvar

Journal entries
Date Particulars L.F. Debit ` Credit `
2018
March 1 Cash A/c Dr. 90,000
Stock A/c Dr. 60,000
To Valluvar’s Capital A/c 1,50,000
(Valluvar commenced business with cash and goods)

2 Purchases A/c Dr. 10,000

To X and Co. A/c 10,000
(Credit purchases made)

3 Bank A/c Dr. 30,000

To Cash A/c 30,000
(Deposited cash into bank)

4 Purchases A/c Dr. 6,000

To Cash A/c 6,000
(Goods purchased by cash)

65
 5 X and Co. A/c Dr. 10,000
To Bank A/c 10,000
(Deposited cash into bank)

6 A and Co. A/c Dr. 4,000

To Sales A/c 4,000
(Credit sales made to A and Co.)

7 Bank A/c Dr. 4,000

To A and Co. A/c 4,000
(Money received through CDM)

8 Purchases A/c Dr. 12,000

To Bank A/c 12,000
(Purchases made)

9 Stationery A/c Dr. 6,000

To Bank A/c 6,000
(Stationery purchased)

10 Bank charges A/c Dr. 200

To Bank A/c 200
(Bank charges levied)

Illustration 13

Deri is a sole trader dealing in automobiles. From the following transactions, pass journal
entries for the month of January, 2018.
Jan. `

1 Commenced business with cash 1,00,000

with goods 2,00,000
with buildings 5,00,000
2 Purchased goods from A and Co. on credit 3,00,000
3 Cash deposited into bank 80,000
4 Purchased goods from B and Co. and payment
made through credit card 5,000
5 Paid A and Co. through RTGS
6 Sold goods to C and Co. and cheque received 50,000
7 Deposited the cheque received from C and Co. with the bank
8 Purchased goods from Z & Co. and paid through debit card 12,000

66
 9 Stationery purchased for and paid through net banking 6,000
10 Income taxof Deri is paid by cheque 10,000
Solution

In the books of Deri

Journal entries
Date Particulars L.F. Debit ` Credit `
2018
Jan. 1 Cash A/c Dr. 1,00,000
Stock A/c Dr. 2,00,000
Buildings A/c Dr. 5,00,000
To Deri’s capital A/c 8,00,000
(Deri commenced business with cash, goods and
buildings)

2 Purchases A/c Dr. 3,00,000

To A and Co. A/c 3,00,000
(Credit purchases made)
3 Bank A/c Dr. 80,000
To Cash A/c 80,000
(Amount deposited in the bank)
4 Purchases A/c Dr. 5,000
To Bank A/c 5,000
(Goods purchased through credit card)
5 A and Co. A/c Dr. 3,00,000
To Bank A/c 3,00,000
(Payment through RTGS)
6 Cash A/c Dr. 50,000
To Sales A/c 50,000
(Sales made and cheque received)
7 Bank A/c Dr. 50,000
To Cash A/c 50,000
(Cheque received from C and Co. deposited in the
bank)
8 Purchases A/c Dr. 12,000
To Bank A/c 12,000
(Goods purchased by debit card)
9 Stationery A/c Dr. 6,000
To Bank A/c 6,000
(Stationery purchased through net banking)
10 Drawings A/c Dr. 10,000
To Bank A/c 10,000
(Income tax of the owner paid)
67