LEARN JOURNAL ENTRIES 1 IN FIVE MINUTES ACCOUNTS

•  LEARN JOURNAL ENTRIES 1 WITH IN FIVE MINUTES
  PLUS ONE ACCOUNT
• MBA/BBA/BCOM/CA AND CS FOUNDATION BUSINESS ACCOUNTING
• RULES
• PERSONAL ACCOUNTS :- DEBIT THE RECEIVER AND CREDIT THE GIVER
• REAL ACCOUNT :- DEBIT WHAT COME IN , CREDIT WHAT GOES OUT
• NOMINAL ACCOUNT:- DEBIT ALL EXPENSES AND LOSSES AND CREDIT ALL INCOMES AND GAINS
• HOW TO PASS JOURNAL ENTRY

1. READ THE TRANSACTION
2. IDENTIFY TWO ASPECTS
3. IDENTIFY THE NATURE OF ACCOUNT
4. APPLY THE RELEVANT RULE
5. AC WHICH IS TO BE DEBITED WRITE THAT -------DR
6. TO AC WHICH IS TO BE CREDITED
7. WRITE THE NARRATION WHICH WILL EXPLAIN THE NATURE OF THE TRANSACTION

• CAPITAL AND DRAWING

1. WE SHOULD KNOW  THAT BUSINESS AND OWNER ARE SEPARATE
2. THE OWNER CAN BRING CASH AND KIND IN THE BUSINESS THAT IS CAPITAL AND LIABILITY FOR THE BUSINESS
3. IN THE SAME MANNER THE BUSINESS MAN CAN WITHDRAW CASH AND GOODS FOR THEIR PERSONAL USE. THAT IS DRAWING AND THAT IS ASSET FOR THE ORGANIZATION.
4. IN THE BUSINESS WE ARE GOING TO RECORD EXPENSES AND INCOME WHICH BELONG TO BUSINESS .THE EXPENSES WHICH ARE PERSONAL MEANS INCURRED BY OWNER NOT TO BE RECORDED AND  EXPENSES WHICH RELATE TO OWNER BUT PAID FROM BUSINESS CASH THAT IS DRAWING.
5. LIFE INSURANCE,INCOME TAX PAID OUT OF BUSINESS CASH ARE DRAWINGS

• CAPITAL AND DRAWING
• RAM STARTED BUSINESS WITH CASH RS 25,000

1. IDENTIFY TWO ASPECTS
2. CASH REAL ACCOUNT--- DR WHAT COMES IN
3. CAPITAL PERSONAL ACCOUNT ( LIABILITY) CR

• SO ENTRY WILL BE
• CASH A/C -----DR     25,000
• TO CAPITAL A/C      25,000
• RAM STARTED/COMMENCED/BROUGHT
•  CASH 20,000 AND MACHINERY 30,000
• RAM BROUGHT MACHINERY INTO THE BUSINESS 30,000

1. MACHINERY ( REAL ACCOUNT)
2. CAPITAL ACCOUNT ( PERSONAL ACCOUNT)

• RAM BROUGHT ADDITIONAL CAPITAL WORTH RS 35,000

1. CASH A/C ---DR   35,000
2. TO CAPITAL A/C 35,000

• JOURNAL
• CAPITAL AND DRAWINGS
  
  

o    RAM PAID RESIDENTIAL ELECTRICITY EXPENSES OUT OF BUSINESS CASH. 2000

1.     DRAWING A/C ---DR 2000

2.     TO CASH                     2.000

o    ( BEING CASH WITHDRAWN FOR PERSONAL EXPENSES)

• PROBLEM
• LIFE INSURANCE PREMIUM PAID TO THE TUNE OF RS 1200

1. DRAWING A/C  DR 1200
2. TO CASH A/C ---1200

• FURNITURE WORTH RS 1000 WITHDRAWN FOR PERSONAL USE
• DRAWING A/C DR 1000
• TO FURNITURE 1000
• ( BEING FURNITURE WITHDRAWN FOR PERSONAL USE)

• TREATMENT OF CASH AND CREDIT TRANSACTIONS
• CASH TRANSACTION:

1. GOODS PURCHASED FOR 2000
2. GOODS PURCHASED ON CASH FOR 2000
3. GOODS PURCHASED FROM RANI ON CASH BASIS FOR 2000

• PURCHASE ( REAL ) DR 2.000
•  TO CASH( REAL ) 2,000
• ( BEING GOODS PURCHASED FOR 2000)
• CREDIT TRANSACTIONS

1. GOODS PURCHASED FROM SOHAN RS 1500
2. GOODS PURCHASED ON CREDIT FROM SOHAN RS 1500
3. GOODS PURCHASED ON CREDIT

• PURCHASE ( REAL A/C)------DR 1500
• TO SOHAN A/C ( PERSONAL A/C)—1500
• ( BEING GOODS PURCHASED ON CREDIT)
• TREATMENT OF CASH/CREDIT TRANSACTIONS

1. SOLD FOR RS 5,000
2. SOLD GOODS FOR 5000 ON CASH BASIS
3. SOLD GOODS TO SOHAN ON CASH BASIS=5,000

·         CASH A/C       DR =5,000

·         TO SALES A/C          = 5,000

·         ( BEING GOODS SOLD)

1. SOLD GOODS TO  MOHAN
2. SOLD GOODS ON CREDIT
3. SOLD GOODS ON MOHAN ON CREDIT BASIS

·         MOHAN A/C   DR =5,000

·         TO SALES =5,000

·         ( BEING GOODS SOLD ON CREDIT BASIS)

• TREATMENT OF PAYMENT ON PERSONAL/ EXPENSE A/C

1. RENT PAID TO SHAM
2. COMMISSION PAID TO SOHAN
3. SALARY PAID TO ANAND
4. IN ALL THE CASES  WE HAVE TO IGNORE PERSONAL ACCOUNT
5. HERE THE RENT .COMMISSION AND SALARY ARE IMPORTANT AND THESE ARE NOMINAL ACCOUNT AND THEY ARE TO BE DEBITED
6. CASH IS GOING OUT OF THE BUSINESS SO IT WILL BE CREDITED

• TREATMENT OF PAYMENT ON PERSONAL/ EXPENSE A/C
• RENT PAID TO SHAM  WORTH RS 1200
• RENT A/C –DR 1200
• TO CASH A/C  1200
• ( BEING RENT PAID TO SHAM)
• SALARY PAID TO NIKITA FOR RS 1000
• SALARY A/C---DR 1000
• TO CASH A/C 1000
• ( BEING SALARY PAID )
• TREATMENT OF PAYMENT ON PERSONAL/ EXPENSE A/C
• PAYMENT RECEIVED FROM ANIL RS 3,000
• HERE PERSONAL ACCOUNT IS IMPORTANT
• CASH A/C ---DR=3,000
• TO ANIL A/C     =3000
• ( BEING CASH RECEIVED FROM RS 3000)
• TREATMENT OF RECEIPT ON PERSONAL/INCOME A/C
• INTEREST RECEIVED FROM AMAN =2100
• CASH A/C    DR =2100
• TO INTEREST = 2100

·         ( BEING INTEREST RECEIVED)

• CASH RECEIVED FROM AMAN =2300
• CASH A/C    DR =2300
• TO AMAN         =2300
• ( BEING CASH RECEIVED )
• SOLVE THE PROBLEM YOUR SELF

1. ON 1/1/19 REENA COMMENCED BUSINESS WITH CASH RS 50.000
2. ON 3/1/19 PURCHASED GOODS FOR RS 2300
3. 5/1/19 GOODS SOLD TO RAHIM FOR RS 5000
4. 7/1/19 REENA PAID TUITION FEES OF HER DAUGHTER OUT OF BUSINESS  FOR 1200
5. 8/1/19 REENA BROUGHT HER PERSONAL CAR WORTH RS 25,000 INTO BUSINESS
6. 10/1/19 CASH RECEIVED FROM RAHIM 5000
7. 12/10/19 SALARY PAID TO GEE TA RE 1500
8. 13/10/19 INTEREST RECEIVED FROM SHAM RS 1200