(@ tttustRaTION 1 Prepare the Stationery Account of a firm for the year ended 31.12.2020 duly balanced off, from the following details: 2020 | Jan.1 | Inventory of stationery April5 | Purchase of stationery by cheque Nov. 15 _ | Purchase of stationery on credit from Five Star Stationery Mart (@) ILLUSTRATION 2 Prepare the ledger accounts on the basis of following transactions in the books of a trader. Debit Balances on January 1, 2020: Cash in Hand 8,000, Cash at Bank® 25,000, inventory of Goods & 20,000, Building % 10,000. Trade receivables: Vijay ® 2,000 and Madhu 2,000. Credit Balances on January 1, 2020: Trade payables: Anand 5,000, Capital® 55,000 Following were further transactions in the month of January, 2020: Jan.1 Purchased goods worth & 5,000 (payable at later date) for cash less 20% trade discount and 5% cash discount. Jan.4 Received 1,980 from Vijay and allowed him & 20 as discount. Jan.8 — Purchased plant from Mukesh for 85,000 and paid ® 100 as cartage for bringing the plant to the factory and another®200 as installation charges. Jan. 12. Sold goods to Rahim on credit €600. Jan, 15. Rahim became insolvent and could pay only 50 paise in a rupee. Jan, 18 Sold goods to Ram for cash ® 1,000. (2) ItusTRATION 3 The following data is given by Mr. S, the owner, with a request to compile only the two personal accounts of Mr. H ‘and Mr. R, in his ledger, for the month of April, 2020. ‘Mr. S owes Mr. R& 15,000; Mr. Howes Mr. S® 20,000. ‘Mr. Rsold goods worth 60,000 @ 10% trade discount to Mr. 5. ‘Mr. S sold to Mr. H goods prices at 30,000. Record a purchase of & 25,000 net fram R, which were sold to H at a profit of %15,000. ‘Mr. S rejected 10% of Mr. R's goods of 4th April. Mr. $ issued a cash memo for 810,000 to Mr. H who came personally for this consignment of goods, urgently needed by him. ‘Mr. H cleared half his total dues to Mr. S, enjoying a %% cash discount (of the payment received, % 20,000 was by cheque). R’s total dues (less 210,000 held back) were cleared by cheque, enjoying a cash discount of ®1,000 on the payment made. .29. Close H's Account to record the fact that all but ® 5,000 was cleared by him, by a cheque, because he was declared bankrupt. 30 Balance R's Account. True and False 1, Aledger is also known as the principal book of accounts. Cash account has a debit balance. Posting is the process of transferring the accounts from ledger to journal. At the end of the accounting year, all the nominal accounts of the ledger book are balanced. Ledger records the transactions in a chronological order. Ifthe total debit side is greater than the total of credit side, we get a credit balance. Ledger accounts of assets will always be debited when they are increased. Multiple Choice Questions 1. The process of transferring the debit and credit items from a Journal to their respective accounts in the ledger is termed as (@) Posting (b) Purchase (©) Balancing of an account The technique of finding the net balance of an account after considering the totals of both debits and credits appearing in the account is known as (a) Posting (b) Purchase (Balancing of an account Journal and ledger records transactions in (a) A chronological order and analytical order respectively. (b) An analytical order and chronological order respectively. (9) Achronological order only Ledger book is popularly known as (a) Secondary book of accounts (b) Principal book of accounts (©) Subsidiary book of accounts At the end of the accounting year all the nominal accounts of the ledger book are (a) Balanced but not transferred to profit and loss account (b) Not balanced and also the balance is not transferred to the profit and loss account (€)_ Not balanced and their balance is transferred to the profit and loss account. Practical Questions 1. Journalize the following transactions, post them in the Ledger and balance the accounts on 31st December. 1. X started business with a capital of % 20,000 He purchased goods from Y on credit @ 4,000 He paid cash to YZ 2,000 He sold goods to Z ® 4,000 He received cash from 2% 6,000He further purchased goods from Y € 4,000 He paid cash to Y € 2,000 He further sold goods to Z2 4,000 He received cash form Z % 2,000