JOURNAL MAKING

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<THE SYSTEM OF ACCOUNTING < VOLIUM1< SYED AQEEL RAZA<aqeelraza@live.com>

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JOURNALIZING
USE OF JOURNALS
The system of any existence requires devices or methods which
empower its mechanism to run smoothly achieving target of its
own made for that purpose. In accounting many devices or
methods have been invented for recording business
transactions and/or under journals columnar designed to make
easy book keeping.
There are several kinds of journal used in book keeping
designed according to the nature of business or the volume of
transactions from which some are mentioned here;
KINDS OF JOURNALS
1-GENERAL JOURNAL (JV)
2-CASH BOOK (CB)
3-PETTY CASH BOOK (PCB)
4-CASH RECEIPT JOURNAL (CRJ)
5-CASH PAYMENT JOURNAL (CPJ)
6-PURCHASE JOURNAL (PJ)
7- PURCHASE RETURN AND ALLOWANCES JOURNAL (PR&AJ)
8-SALES JOURNAL (SJ)
9- SALES RETURN AND ALLOWANCES JOURNAL (SR&AJ)

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<THE SYSTEM OF ACCOUNTING < VOLIUM1< SYED AQEEL RAZAaqeelraza@live.com
JOURNALIZING
1-STEPS FOR JOURNALS
- Source document
The first step for moving towards journals is source
document meant by any information relating to business
transaction enables journals to fill its columnar
requirement like cash memo, bill, invoice, sales tax
invoice, purchase invoice etc. and the source document
also provides evidence or support to the transaction
consists on date, serial number, the name of seller and
purchaser, quantity, description of goods, rate of goods,
amount and tax involved in etc. etc. as specified in
accounting cycle or below;

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JOURNALIZING
CASH MEMO
S.No. Date
M/S.
S.No. Particulars Rate Quantity Amount(Rs.)
Total
Goods once sold will not be back. E.&.O.E.
Signature

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JOURNALIZING
COMPANY LOGO Invoice No.
Date
COMPANY NAME P.Order No.
(Company Slogan)
(Address)
No., Street, City, code
Phone, Fax
e-mail
SALES TAX NO.
To
Name
Company Name
Address
Phone No.
SALES TAX NO.
S.NO. QUANTITY DESCRIPTION RATE AMOUNT
SUB TOTAL
SALES TAX
TOTAL

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THANK YOU FOR YOUR BUSINESS
JOURNALIZING
- Voucher system
The second step for entering in journals is voucher system
contains the information of source document as well as the
voucher number, date of payment or receipt, and folio number;
the journal or ledger page number supported by source
document or works alone as source document.
The specimen of vouchers; cash payment voucher, cash receipt
voucher, petty cash voucher, bank payment voucher, bank
receipt voucher and journal voucher, used in recording as
specified below;
Journal voucher is used to record liabilities and adjustments in
ledger.
The source document supports to voucher and voucher to
journal and both play very important role in crystallizing the
system of accounting. They provide references to auditors to
reach the required transaction in no time then we can say true
accounting is behind to source document and voucher.

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JOURNALIZING
CASH PAYMENT VOUCHER
Name of Company
Date
VoucherNo.
C.B.Folio
DEBIT A/c
PAID TO
On account
of Amount
Rs. Ps.
TOTAL
RUPEES

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Prepared by: Checked by: Authorized by: Received By:
JOURNALIZING
CASH RECEIPT VOUCHER
Name of Company
Date
Voucher No.
C.B. Folio
CREDIT A/c
Received
from
On account of Amount
Rs. Ps.
TOTAL
RUPEES

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JOURNALIZING
Name of Company
PETTY CASH VOUCHER
No.
Paid to
Rupees Rs.
on account of

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JOURNALIZING
BANK PAYMENT VOUCHER
Name of Company
Date
Voucher No.
C.B. Folio
DEBIT A/c
PAID TO
Rs. Ps.
TOTAL
RUPEES

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JOURNALIZING
BANK RECEIPT VOUCHER
Name of Company
Date
BP.V NO.
C.B. Folio
CREDIT A/c
Received
from
Rs. Ps.
TOTAL
RUPEES

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JOURNALIZING
JOURNAL VOUCHER
JV.No. DATED :
S.NO. HEAD OF ACCOUNTS FOLIO DR. (Rs.) CR. (Rs.)
TOTAL

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NARRATION:
Signed Signed Signed Signed
JOURNALIZING
1- GENERAL JOURNAL (GJ)
General Journal is used for sequential record of all
business transactions in low volume otherwise spread in
specialized journals consists on date, description,
reference, debit and credit and the transactions involves
the date of the transaction, the title of the accounts
which have to debit and credit and the explanation of
transaction.
There are two types of general journals “Standard Form
and Skeleton Form as designed below;

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JOURNALIZING
1 - STANDARD FORM
PAGE NO.
GENERAL JOURNAL
DATE
2015- DESCRIPTION REF. DEBIT CREDIT

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JOURNALIZING
The standard form of general journal contains five
columns namely date, description, reference, debit and
credit and the method of recording is given below;
DATE
In this column, the year is written on top as 2015, divided
into two portions bigger and small, bigger is for month
i.e. Jan, Feb, Mar, Apr, May, June and son so and, small
the date of the month i.e. 1, 2, 3, 4, 5, 6, 7 so on.
DESCRIPTION
The column of description contains the name or head of
account of the transaction indicating debit and credit.
The debit is written first nearest to the date of the
transaction and the credit on the second line giving space

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to the debit. The third under line in the bracket is of
narration or explanation of the transaction which
separates each transaction.
JOURNALIZING
REFERENCE/REF:
The voucher number oblique page number of the ledger
where the account is mentioned is referred in the
column “Ref.” as to cash account on page 5, capital
account on page 01, Furniture account on page 50 and so
on.
DEBIT AND CREDIT
The amount of transaction is written on the column debit
and credit.
Therefore, the general journal covers all the aspects of
transaction involves date, description, posting reference
and accounting methods.

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JOURNALIZING
2 – SKELETON FORM
Skeleton Form of general journal is only column-less but
the entries of the transactions are recorded as same as in
General Journal. This form is generally used to save time
or for practice purposes.
1.1.2015 CASH
CAPITAL

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(Narration…………………..)
JOURNALIZING
Illustration No.1
Jan1, 2015: Rizwan commences trading business in the
name of Rizwan Traders with a cash of Rs.100, 000/=.
Jan 5, 2015: Paid shop rent for three months @ Rs.2000/= per
month as shop deposit and Rs. 2000/= for the month.
Jan 6, 20105: Purchased merchandise on cash Rs.60, 000/=.
January 7, 2015: Purchase Furniture for shop 5000/= in cash.
January 10, 2015, Purchase Merchandise for Rs.25, 000/= on
credit from Imran Trading Co.
Jan 11, 2015: Paid for cartage on carrying merchandise at shop
Rs.2000/=.
Jan 15, 2015: Sold merchandise of Rs.50, 000/= in cash.

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Jan 18, 2015, Sold merchandise on credit for Rs.30, 000/= to
A.A. Enterprises, S.I.T.E., Karachi.
Jan 20,2015: Cash deposited into bank Rs.10, 000/= as an
initial deposit for opening account into MCB Bank Ltd, K.I.A.
Br. Karachi.
JOURNALIZING
Jan 22, 2015: Paid electricity bill for Rs.1500/= for the month
of January 2015
Jan 22, 2015: Returned defective goods worth Rs.1000/= to
M/s. Imran Trading Company.
Jan 23, 2015 Cash Rs.23, 520/= paid to M/s. Imran Trading Co.
and received 2% discount Rs.480/= on payment within time.
Jan 24, 2015: Cash Rs.28, 500/= received from M/s. A.A.
Enterprises and allowed them discount Rs.500/- on payment
within time.
30, Paid salary to sale man Rs. 5000/= by cheque.
Jan 31, 2015: Unsold goods of Rs.1000/= returned from M/s.
A.A. Enterprises.

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JOURNALIZING
JOURNALIZING
Solution:
Jan1, 2015: Rizwan commences trading business in the
name of Rizwan Traders with a cash of Rs.100, 000/=.
FIRST STEP = SOURCE DOCUMENT = CASH MEMO/INVOICE
SECOND STEP = VOUCHER SYSTEM = CASH PAYMENT
THIRD STEP = JOURNALS = GENERAL JOURNAL

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JOURNALIZING
RIZWAN TRADERS
Date 1/1/2015
VoucherNo. CR-1
Folio 1
CREDIT CAPITAL A/C (RIZWAN) A/c
Received
from RIZWAN TRADERS
Rs. Ps.
Mr. Rizwaninvestedcashforstartingbusiness 100,000 00
underthe name of RizwanTraders
TOTAL

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RUPEES ONE HUNDRED THOUSAND ONLY
100,000 00
signed signed signed signed
JOURNALIZING
PAGE NO. 1
GENERAL JOURNAL
DATE
DESCRIPTION REF. DEBIT CREDIT
2015
Jan 1 Cash A/c CR-1 100,000.-
Capital A/c (Rizwan) CR-1 100,000.-
(Cash invested by Rizwan)
Jan 5, 2015: Paid shop rent for three months @
Rs.2000/=per month as shop deposit and Rs. 2000/=for
the month.
FIRST STE = SOURCE DOCUMENT = RENT AGREEMENT/RENT RECEIPT

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JOURNALIZING
RIZWAN TRADERS
Date 5/1/2015
VoucherNo. CP-1
C.B.Folio 1
DEBIT SHOPDEPOSIT A/C& PREPAIDRENT A/c
PAID TO SHOPOWNER
Rs. Ps.
Paid shop rent for three months @ Rs.2000/month as shop deposit
and Rs.2000 for the month
SHOP DEPOSIT 6,000 00
PREPAID RENT 2,000 00

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TOTAL 8,000 00
RUPEES EIGHT THOUSAND ONLY
JOURNALIZING
PAGE NO.1
GENERAL JOURNAL
DATE
2015
Jan: 5 Shop DepositA/c CP1 6,000.-
PrepaidRent A/c CP1 2,000.-
Cash A/c CP1 8,000.-
(3 month shoprent as deposit &1 monthrent in
advance)
Jan 6, 20105: Purchased merchandise on cash Rs.60, 000/=.
FIRST STE = SOURCE DOCUMENT = CASH MEMO/INVOICE

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JOUNALIZING
CASH MEMO
S.No. 700 Date 06.1.2015
M/S. RIZWAN TRADERS
01 RADIO 100/= 100 10,000.-
02 TAPE RECORDER 500/= 30 15,000.-
03 SPEAKERS JAPAN 200/= 50 10,000.-
04 V.C.R. 500/= 30 15,000.-
05 CAMRAS 100/= 100 10,000.-

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KAMRAN ELECTRONICS
I.I.Chundrigar Road
Total 60,000.-
Signature
JOURNALIZING
JOURNALIZING
RIZWAN TRADERS
Date 6/1/2015
VoucherNo. CP-2
Folio 1
DEBIT PURCHASES A/c
PAID TO CASH
Rs. Ps.
Merchandise purchased on cash from M/s. Kamran Electronics 60,000 00
Vide C/M No.700 dated 6.1.2015
-
-

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TOTAL 60,000 00
RUPEES SIXTY THOUSAND ONLY
JOURNALIZING
PAGE NO.1
GENERAL JOURNAL
DATE
2015
Jan: 6 Purchases A/c CP2 60,000.-
Cash A/c CP2 60,000.-
(Merchandise purchasedincash)
January 7, 2015: Purchase Furniture for shop 5000/= in
cash.

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JOURNALIZING
CASH MEMO
S.No. 100 Date 07.1.2015
M/S. RIZWAN TRADERS
01 CHAIR 200/= 5 1,000.-
02 TABLE 500/= 1 500.-
03 SHOW CASE 1000/= 1 1,000.-
04 STOOL 100/= 5 500.-
05 SIDE RACK 1,000/= 2 2,000.-

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SHAHID FURNITURE MART
Liaquatabad, Karachi
Total 5,000.-
Signature
JOURNALIZING
RIZWAN TRADERS
Date 7/1/2015
VoucherNo. CP-3
Folio 1
DEBIT FURNITURE A/C A/c
PAID TO CASH
Rs. Ps.
Purchased furniture for shop in cash 5,000 00

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TOTAL 5,000 00
RUPEES FIVE THOUSAND ONLY
JOURNALIZING
PAGE NO.1
GENERAL JOURNAL
DATE
2015
Jan: 7 Furniture A/c CP3 5,000.-
(Purchasedfurniture forshop)
January 10, 2015, Purchase Merchandise for Rs.25, 000/=
on credit from Imran Trading Co.
SECOND STEP = VOUCHER SYSTEM = JOURNAL VOUCHER

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JOURNALIZING
INVOICE
COMPANY LOGO Invoice No. 0102
Date 10.1.2015
COMPANY NAME IMRAN Trading Company P.Order No. PO-RT-5
(Company Slogan)
(Address) I.I. Chundrigar Road,
No., Street, City, code Karachi
Phone, Fax 0213712586
e-mail imranstores@yahoo.com
SALES TAX NO.
To
Name MR. RIZWAN
Company Name M/S. RIZWAN TRADERS
Address KORANGI, KARACHI
Phone No. 0215067012
SALES TAX NO.
01 10 T.V. SETS TOSHIBA B&W 2000/= 20,000.-
02 10 V.C.P. China 500/= 5,000/=

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2% discount on payment within15 days fromthedate
Of purchase.
25,000.-
SUB TOTAL 25,000.-
SALES TAX 0
TOTAL 25,000.-
JOURNALIZING
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-1 DATED : 10/1/2015
1 PurchasesA/c JV1/6 25,000.-
2 A/cPayable (ImranTradingCo.) JV1/7 25,000.-

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TOTAL
NARRATION: TORECORD PURCAHSE OF MERCHANDISE FROM Imran TRADING CO.
JOURNALIZING
PAGE NO.1
GENERAL JOURNAL
DATE
2015
Jan: 10 Purchases A/c JV1 25,000.-
A/c Payable (Imran Trading) JV1 25,000.-
(Merchandise purchasedoncreditfromImran
Trading)
Jan 11, 2015: Paid for cartage on carrying merchandise
at shop Rs.2000/=.

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FIRST STE = SOURCE DOCUMENT = NONE
SECOND STEP = VOUCHER SYSTEM = CASH PAYMENT VOUCHER
JOURNALIZING
RIZWAN TRADERS
Date 11/1/2015
VoucherNo. CP-4
Folio 2
DEBIT CARTAGE A/C A/c
PAID TO CASH
Rs. Ps.
Paid cartage on carrying merchandise to shop 2,000 00

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TOTAL 2,000 00
RUPEES TWO THOUSAND ONLY
JOURNALIZING
PAGE NO.2
GENERAL JOURNAL
DATE
2015
Jan: 11 Cartage A/c CP4 2,000.-
(paidcartage for merchandise)
Jan 15, 2015: Sold merchandise of Rs.50, 000/= in cash.

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SECOND STEP = VOUCHER SYSTEM = CASH RECEIPT VOUCHER
CASH MEMO
S.No. 700 Date 15.1.2015
M/S. CHAUDRY TRADERS
KARACHI
01 RADIO 200 50 10,000.-
02 TAPE RECORDER 600 15 9,000.-
03 SPEAKERS JAPAN 300 24 7,200.-
04 V.C.R. 600 15 9,000.-
05 CAMRAS 200 50 10,000.-
06 T.V. SETS TOSHIBA BW 600 8 4,800.-
RIZWAN TRADERS

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Korangi-Karachi
Total 50,000.-
Signature
JOURNALIZING
RIZWAN TRADERS
Date 15/1/2015
VoucherNo. CR-2
Folio 2
CREDIT SALE A/C A/c
CASH Receivedfrom; M/S. CHAUDHRY TRADERS
Rs. Ps.
Cash receivedfromcash customerforsale of merchandise 50,000 00
Cash MemoNo.700 dated15.1.2015

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TOTAL
RUPEES FIFTY THOUSANDONLY
50,000 00
JOURNALIZING
PAGE NO.2
GENERAL JOURNAL
DATE
2015
Jan: 15 Cash A/c CR2 50,000.-
Sale CR2 50,000.-
(Merchandise soldincash)

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Jan 18, 2015, Sold merchandise on credit for Rs.30, 000/=
to A.A. Enterprises, S.I.T.E., Karachi.
FIRST STE = SOURCE DOCUMENT = INVOICE
JOURNALIZING
INVOICE
COMPANY LOGO Invoice No. 002
Date 18.1.2015
COMPANY NAME RIZWAN TRADERS Order No. AAE-002
(Company Slogan)
(Address)
No., Street, City, code KORANGI, KARACHI
Phone, Fax 0215067012
e-mail Rizwantraders@yahoo.com
SALES TAX NO.
To
Name
Company Name M/S. A.A. ENTERPRISES
Address S.I.T.E. KARACHI
Phone No. 0213892065
SALES TAX NO.

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01 4 T.V. SETS TOSHIBA B&W 2500/= 10,000.-
02 50 RADIO 200/= 10,000.-
03 25 CAMRA 200/= 10,000.-
30,000.-
SUB TOTAL 30,000.-
SALES TAX 0
TOTAL 30,000.-
JOURNALIZING
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-2 DATED : 18/1/2015
1 A/c Receivable(A.A.Enterprises) 2 30,000.-
2 Sales 2 30,000.-

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TOTAL
NARRATION: TORECORD SALE OF GOODS ON CREDIT
JOURNALIZING
PAGE NO.2
GENERAL JOURNAL
DATE
2015
Jan: 18 A/c Receivable(A.A.Enterprises) JV2 30,000.-
SalesA/c JV2 30,000.-
(Soldmerchandise oncredittoA.A.
Enterprises,Karachi)

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Jan 20,2015: Cash deposited into bank Rs.10, 000/= as
an initial deposit for opening account into MCB Bank
Ltd, K.I.A. Br. Karachi.
FIRST STE = SOURCE DOCUMENT = BANK DEPOSIT SLIP
SECOND STEP = VOUCHER SYSTEM = BANK PAYMENT VOUCHER
JOURNALIZING
RIZWAN TRADERS
Date 20/1/2015
VoucherNo. CP5
Folio 2
DEBIT BNAK A/c
PAID TO MCB, KIA BRANCH
Rs. Ps.
Cash deposited into bank as an initial deposit for opening 10,000 00
account into MCB Bank Ltd, K.I.A., Branch, Karachi

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TOTAL 10,000 00
RUPEES TEN THOUSAND ONLY
JOURNALIZING
PAGE NO.2
GENERAL JOURNAL
DATE
2015
Jan: 20 Bank A/c CP5/ 10,000.-
Cash CP5/ 10,000.-
(CashdepositedintoBank)

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Jan 22, 2015: Paid electricity bill for Rs.1500/= for the
month of January 2015
FIRST STE = SOURCE DOCUMENT = ELECTRICITY BILL
SECOND STEP = VOUCHER SYSTEM = CASH PAYMENT VOUCHER
JOURNALIZING
RIZWAN TRADERS
Date 22/1/2015
VoucherNo. CP-6
Folio 2
DEBIT UTILITY EXPENSES A/c
PAID TO CASH
Rs. Ps.
Cash paid for Electricity bill for the month of January 2015 00

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1,500
Into MCB, KIA Branch, Karachi.
-
-
TOTAL 1,500 00
RUPEES ONE THOUSAND FIVE HUNDRED ONLY
JOURNALIZING
PAGE NO.2
GENERAL JOURNAL
DATE
2015
Jan: 22 UtilitiesExpense CP6/ 1,500.-
Cash CP6/ 1,500.-
(paidelectricitybill)

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Jan 22, 2015: Returned defective goods worth
Rs.1000/= to M/s. Imran Trading Co.
FIRST STEP = SOURCE DOCUMENT = DEBIT NOTE
JOURNALIZING
ISSUED BY PURCHASER
SPECIMEN OF DEBIT MEMORANDUM
RIZWAN TRADERS,
P.O.Box 125,
Korong, Karachi
Debit Memorandum NO. 001
To: Date: January 22,2015
M/s. Imran Trading Co.
I.I.Chundrigar Road, Karachi
We are debiting your account with the value of under mentioned goods
returned;

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Qty. Particulars Amount(Rs.)
2 Tape Record @ Rs.500 as per invoice. 1,000.-
No. 102 dated 10.1.2015
Less
Returned goods being of inferior quality
via Courier Company E.&O.E.
Signature
JOURNALIZING
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-3 DATED : 22/1/2015
1 A/c Payable (ImranTrading) 3 1,000.-
2 Purchase Return 3 1,000.-

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TOTAL
NARRATION: TORECORD THE RETURN OF DFECTIVE GOODS TO IMRAN TRADING CO VIDE
DEBIT NOTE# 001 DATED 22.1.2015
JOURNALIZING
PAGE NO.3
GENERAL JOURNAL
DATE
2015
Jan: 23 A/c Payable (ImranTrading) JV3/ 1,000.-
Purchase ReturnA/c JV3/ 1,000.-

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(goodsreturnedtoImranTrading)
23, Cash Rs.23, 520/= paid to M/s. Imran Trading Co.
and received 2% discount Rs.480/= on payment within
time.
FIRST STEP = SOURCE DOCUMENT = /CASH RCEIPT FROM SUPPLIER
JOURNALIZING
RIZWAN TRADERS
Date 23/1/2015
VoucherNo. CP-7
Folio 3
DEBIT A/CPAYABLE (IMRAN TRADING) A/c
PAID TO IMRAN TRADING

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Rs. Ps.
Cash paid to Imran Trading against merchandise purchased on 23,520 00
account)
-
TOTAL 23,520 00
RUPEES Twenty three thousand five hundred twenty only
JOURNALIZING
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-4 DATED : 22/1/2015
1 A/c Payable (ImranTrading) 3 480.-
2 Purchase Discount 3 480.-

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TOTAL
NARRATION: TORECORD PURCAHSE DISCOUNT RECEIVED ON PAYMENT WITHIN TIME.
JOURNALIZING
PAGE NO.3
GENERAL JOURNAL
DATE
2015
Jan: 23 A/c Payable (ImranTrading) Cp7/ 23520.-
Cash A/c CP7/ 23,520.-
(Cash paidto ImranTrading against purchases)

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A/c Payable (ImranTrading) JV4/ 480.-
Purchase discount JV4/ 480.-
(To record purchase discount)
Jan 24, 2015: Cash Rs.29, 000/=received from M/s. A.A.
Enterprises and allowed them discount Rs.500/- on
payment within time.
FIRST STEP = SOURCE DOCUMENT CREDIT NOTE/CASH RCEIPT FROM SUPPLIER
SECOND STEP = VOUCHER SYSTEM = CASH RECEIPT VOUCHER/JOURNAL VOUCHER
JOURNALIZING
RIZWAN TRADERS
Date 24/1/2015
VoucherNo. CR-3
Folio 3
CREDIT A/c Receivable (A.A. Enterprises) A/c

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Cash Receivedfrom M/S.A.A.ENTERPRISES
Rs.
Ps
.
Cash receivedfromM/s.A.A.Enterprises 28,500 00
TOTAL 28,500 00
RUPEES Twentyeightthousandfive hundredonly
JOURNALIZING
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-5 DATED : 24/1/2015

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1 SalesDiscount 3 500.-
2 A/c Receivable (A.A. Enterprises) 3 500.-
TOTAL
NARRATION: TORECORD DISCOUNT ON SALE ALLOWED TOM/S. A.A. ENTERPRISES ON TIMELY PAYMENT.
JOURNALIZING
PAGE NO.3
GENERAL JOURNAL
DATE DESCRIPTION REF. DEBIT CREDIT

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2015
Jan: 24 Cash A/c CR3/ 28,500.-
A/cReceivable (A.A.Enterprises) CR3/ 28,500.-
UnsoldgoodsreturnedfromA.A.
Enterprises)
SalesDiscount JV5/ 500.-
A/cReceivable (A.A.Enterprises) JV5/ 500.-
(To recordSalesDiscount)
30, Paid salary to sale man Rs. 5000/= by cheque.
FIRST STE = SOURCE DOCUMENT = SALARY SLIP DULY RECEIVED
SECOND STEP = VOUCHER SYSTEM = BANK PAYMENT VOUCHER
JOURNALIZING
RIZWAN TRADERS

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Date 30/1/2015
VoucherNo. BP-1
Folio 3
DEBIT SALARIESA/C A/c
PAID TO MR. KASHIF,SALESMAN
Rs. Ps.
Paid cheque against salary for the month of January 2015 5,000 00
TOTAL 5,000 00
RUPEES FIVE THOUSAND ONLY
JOURNALIZING
PAGE NO.3
GENERAL JOURNAL

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DATE
2015
30 SalariesExpense A/c BP1/ 5,000.-
Bank A/c BP1/ 5,000.-
(paidforsalaryto sale man at shop)
Jan 31, 2015: Unsold goods of Rs.1000/= returned from
M/s. A.A. Enterprises.
FIRST STE = SOURCE DOCUMENT = CREDIT NOTE
JOURNALIZING
ISSUED BY SELLER
SPECIMEN OF CREDIT MEMORANDUM
RIZWAN TRADERS,
KORANGI

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KARACHI-PAKISTAN
To: Credit Memorandum No. 001
A.A. Enterprises Date: January 31,2015
S.I.T.E.,
KARACHI- PAKISTAN
We are crediting your account with the value of under mentioned goods
Received from you for the reason stated in your Debit Note.
Qty. Particulars Amount(Rs.)
5 Radio @ Rs.200 as per Debit Note 1,000.-
No. 501 dated 19.1.2015
Returned (goods being unsold as
greed to return)
E.&O.E.
Signature
<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<aqeelraza@live.com>
JOURNALIZING
RIZWAN TRADERS

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JOURNAL VOUCHER
JV.No. JV-6 DATED : 31/1/2015
1 SalesReturn 3 1,000.-
2 A/c Receivable (A.A. Enterprises) 3 1,000.-
TOTAL
NARRATION: TORECORD THE RETURN OF UNSOLD GOODS FROM M/S. A.A. ENTERPRISES AS AGREED.
JOURNALIZING

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PAGE NO.1
GENERAL JOURNAL
DATE
2015
Jan: 31 Sale Return JV6/ 1,000.-
A/c Receivable(A.A.Enterprises) JV6/ 1,000.-
(unsoldgoodsreturned)
JOURNALIZING
PAGE NO.1

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GENERAL JOURNAL
DATE
2015
Jan 1 Cash A/c CR1/ 100,000
Capital A/c (Rizwan) CR1/ 100,000
5 Shop DepositA/c CP1/ 6,000
PrepaidRent A/c CP1/ 2,000
Cash A/c CP1/ 8,000
(3 month shoprent as deposit &1 monthrent inadvance)
6 Purchases A/c CP2/ 60,000
Cash A/c CP2/ 60,000
7 Furniture A/c CP3 5,000
Cash A/c CP3 5,000
10 Purchases A/c JV1 25,000
A/c Payable (Imran Trading) JV1 25,000
(Merchandise purchasedoncredit from ImranTrading)
C/O 198,000 198,000
JOURNALIZING

62
PAGE NO.2
GENERAL JOURNAL
DATE
2015
C/O 198,000 198,000
11 Cartage A/c CP4/ 2,000
Cash A/c CP4/ 2,000
15 Cash A/c CR2/ 50,000
Sale CR2/ 50,000
18 A/c Receivable(A.A.Enterprises) JV2/ 30,000
SalesA/c JV2/ 30,000
(Soldmerchandise oncredittoA.A.Ent.)
20 Bank A/c CP5/ 10,000
CashA/c CP5/ 10,000
Jan: 22 UtilitiesExpense CP6/ 1,500
Cash CP6/ 1,500
C/O 291,500 291,500
JOURNALIZING
PAGE NO.3

63
GENERAL JOURNAL
DATE
2015
C/O 291,500 291,500
Jan: 22 A/c Payable (ImranTrading) JV3/ 1,000
Purchase ReturnA/c JV3/ 1,000
(goodsreturnedtoImranStores)
Jan: 23 A/c Payable (ImranTrading) CP7/ 23,520
(Cashpaidto Imran Tradingagainst
purchases)
A/c Payable (ImranTradingCo.) JV4/ 480
Purchase Discount JV4/ 480
(To recordPurchase discount)
Jan: 24 Cash A/c CR3/5 28,500
A/cReceivable (A.A.Enterprises) CR3/ 28,500
(CashreceivedfromA.A.Enterprises)
SalesDiscount JV5/ 500
A/cReceivable (A.A.Enterprises) JV5/ 500
(To recordsalesdiscount)
30 SalariesExpense A/c BP1/ 5,000
Bank A/c BP1/ 5,000
Jan: 31 SalesReturnA/c JV6/ 1,000
A/cReceivable (A.A.Enterprises) JV6/ 1,000
(UnsoldgoodsreturnedfromA.A.
Enterprises)
TOTAL 353,480 353,480
<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZAaqeelraza@live.com
JOURNALIZING
SKELETON FORM:
1 Cash A/c CR1/

64
Jan
100,000
Capital A/c (Rizwan) CR1/ 100,000
5 Shop DepositA/c CP1/ 6,000
PrepaidRent A/c CP1/ 2,000
Cash A/c CP1/ 8,000
(3 month shoprent as deposit &1 monthrent inadvance)
6 Purchases A/c CP2/ 60,000
7 Furniture A/c CP3 5,000
Cash A/c CP3 5,000
10 Purchases A/c JV1 25,000
A/c Payable (Imran Trading) JV1 25,000
(Merchandise purchasedoncredit from ImranTrading)
JOURNALIZING

65
11 Cartage A/c CP4/ 2,000
Cash A/c CP4/ 2,000
15 Cash A/c CR2/ 50,000
Sale CR2/ 50,000
18 A/c Receivable(A.A.Enterprises) JV2/10 30,000
SalesA/c JV2/9 30,000
(Soldmerchandise oncredittoA.A.Ent.)
20 Bank A/c Cp5/ 10,000
CashA/c Cp5/ 10,000
Jan: 22 UtilitiesExpense CP6/ 1,500
Cash CP6/ 1,500
JOURNALIZING

66
Jan: 22 A/c Payable (ImranTrading) JV3/ 1,000
Purchase ReturnA/c JV3/ 1,000
(goodsreturnedtoImranStores)
Jan: 23 A/c Payable (ImranTrading) CP7/ 24,000
(Cashpaidto Imran Tradingagainstpurchases)
A/c Payable JV4/ 480
Purchase Discount JV4/ 480
(To recordPurchase discount)
Jan: 24 Cash A/c CR3/5 29,000
A/cReceivable (A.A.Enterprises) CR3/ 29,000
(CashreceivedfromA.A.Enterprises)
SalesDiscount JV5/ 500
A/cReceivable (A.A.Enterprises) JV5/ 500
(To recordsalesdiscount)
30 SalariesExpense A/c BP1/ 5,000
Bank A/c BP1/ 5,000
Jan: 31 SalesReturnA/c JV6/ 1,000
A/cReceivable (A.A.Enterprises) JV6/ 1,000
(UnsoldgoodsreturnedfromA.A.Enterprises)
JOURNALIZING

67
2 – CASH BOOK (CB)
Cash book is maintained to record date-wise all
accounting transactions relating to cash/bank receipts
and cash/bank payments.
The cash book has two sides “Receipts on debit side and
Payments on credit side” each side has same column as
to date, description, folio, cash and bank. Cash debit is
recorded in receipt side and credit on payment side.
It works as Journal and Ledger both and saves time of
posting journal entries and their posting to ledger in
Cash account and Bank account.
JOURNALIZING
DISCOUNT

68
The trade discount on sale or purchase is not recorded
as shown as deduction in invoice and purchaser or seller
record the net amount of the commodities.
The discount, allowed on the amount receivable from
the customer to collect the money at an early date or
some reasons, is recorded to ledger through journal
voucher.
Contra Entry:
Contra entry means no effect of transaction, or transfer
the amount from one place to another place or replace
the place of account as cash replace with bank marked
as “C”.
Banks;
In case of more than one bank, the column can be
added.
JOURNALIZING

69
JOURNALIZING
Illustration 1.1

70
Feb: 1, 2105: Issued cheque Rs.2000/= as Petty Cash
Fund.
RIZWAN TRADERS
Date 01/2/2015
VoucherNo. BP-3
Folio 4
DEBIT PETTY CASHFUND A/c
PAID TO Mr. Abdul Lateef
Rs. Ps.
Cheque No. 1125678 dated 1.2.2015 2000 00
Initial payment for petty cash expenses
TOTAL 2000 00
RUPEES TWO THOUSAND ONLY
JOURNALIZING

71
PAGE NO.4
GENERAL JOURNAL
DATE
2015
Feb: 01 PettyCashFund Bp3 2,000.-
Cash BP3 2,000.-
(Cashfor pettycash expenses)
3-PETTY CASH BOOK (PCB)
Petty cash book is the journal where small payments
like conveyance, cartage, postage, Entertainment,
Office supplies etc. etc. are recorded under separate
columns head wise and other columns corresponding to
the nature of transactions refer to page number or
account number of ledger.
It contains five columns namely; Receipt, Date,
Description, Voucher Number and payments
spreadable.
JOURNALIZING

72
Cash or cheque of specified amount or in lump sum as
Petty Cash Fund is issued from cash book to petty
cashier and petty cashier makes payments of petty cash
expenditure, records all these payments in petty cash
book in their respective columns and then submits to
the accountant who checks the values and statements
and then issues cheque or cash of the amount spent
against replenishment of petty cash funds.
Illustration 1.2
2.2.2015: Purchase Carbon paper, calculator, pen, pencil Rs.300.-
3.2.2015: Tea, Cold Drink, biscuits Rs.100.-
4.2.2015: Taxi fare of Mr. Rizwan Rs.100.-
5.2.2015: Paid for postage Rs. 50.-
6.2.2015: Paid charity Rs. 20.-
7.2.2015: Paid for office chair repaired Rs.300.-
10.2.2015: Purchase ink, marker etc Rs.100.-
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73
12.2.2015: Purchase tissue paper, mosquito spray Rs.200.-
15.2.2015: paid for tea, biscuits Rs. 50.-
16.2.2015: Paid taxi fare of Mr. Rizwan Rs.100.-
18.2.2015: paid for telephone expense Rs. 50.-
20.2.2015: Paid for letter pads Rs.100.-
22.2.2015: Paid for Stapler Rs. 50.-
25.2.2015: Paid advance to Kashif, S/Man Rs.400.-
Solution;
Petty Cash Voucher will be filled as specified below and attach support if
available. Cash memos for purchases of 2/2/2015, 10/2/2015, 12/2/2015,
22/2/2015 &22/2/15 shall be attachedwithpetty cash vouchers and remaining
singed by paying person or receiving person on voucher.
JOURNALIZING

74
Rizwan Traders
PETTY CASH VOUCHER
No.
Paid to
Rupees Rs.
on account of
JOURNALIZING

75
The petty cashier will submit to Accountant petty cash book along with all
vouchers for getting further funds who checks and verifies the values and
statement andthenissues acheque or cash further toreplenish petty cash fund
like before.
The Accountant will journalize petty cash expenses to ledger accounts as;
JOURNALIZING

76
RIZWAN TRADERS
JOURNAL VOUCHER
JV.No. JV-7 DATED : 31/1/2015
1 StationeryA/c 550
2 Entertainment A/c 150
3 Conveyance A/c 200
4 Postage A/c 50
5 CharityA/c 20
6 Furniture RepairA/c 300
7 Janitorial A/c 200
8 Telephone ChargesA/c 50
9 Advance to Staff 400
PettyCash Funds 1,920
TOTAL
NARRATION: TORECORD PETTY CASH EXPENSES.
JOURNALIZING

77
4-CASH RECEIPT JOURNAL (CRJ)
The cash receipt journal is used to record all transactions
involve the receipt of cash.
The sale of merchandise mostly involves the amount of
receivables or sometime discount on sale, the columns of
Sales (Cr.), account receivable (Cr.) and sales discount
(Dr.) are shown for the receipt relating to sale.
The columns “Other Accounts” is for all other types of
cash receiving transaction which do not involves sales or
accounts receivable.
Posting in account receivable column links to subsidiary
ledger account of customers to have an up to date record
of balancesof customers and a check mark ( _/) is marked
in Ref: column of accounts receivable as a proof of
posting in subsidiary ledger.
At the end of the period, the total of all debit and credit
columns is made as equal and the totalsare posted in their
respective accounts in ledger under reference crj.
JOURNALIZING

78

79
JOURNALIZING
5- CASH PAYMENT JOURNAL (CPJ)
Like cash receipt journal, the cash payment journal is
used to control all cash payments and payments to
creditors for purchases.
The cash payment journal involves columns date,
description and voucher number
Date, description and voucher number is used commonly,
other accounts like shop rent, office supplies, office
equipment besides purchases shown in other account
column.
Posting in account payable column links to subsidiary
ledger account of suppliers to have an up to date record of
balances of supplies and a check mark ( _/) is marked in
Ref: column of accounts payable as a proof of posting in
subsidiary ledger.
At the end of the period, the total of all debit and credit
columns is made as equal and the totalsare posted in their
respective accounts in ledger under reference cpj.
JOURNALIZING

80
6- PURCHASE JOURNAL (PJ)
Purchase journal relates to transactions of credit
purchases of merchandise only.
Purchase journal consists on columns date, invoice
number, name of supplier, post reference and amount.
JOURNALIZING
JOURNALIZING

81
Purchase journal links to controlling ledger of Purchases
Account and Account Payable and account payable links
to subsidiary ledger of suppliers and subsidiary ledger
links to accounts payable schedule or list of account
payable balances of suppliers.
A check mark (_/) is marked in Ref: column of purchase
journal as a proof of posting in subsidiary ledger of
account payable.
Illustration 1.3
Rizwan Traders purchased merchandise on account
during March 2015 as below;
100 radio set @ 100/= for Rs.8000/- Bilal Store vide
Invoice No.305 dated 1.3.2015.
10 T.V. set @ 1500/= for Rs.15000/= from Asim Traders
vide Invoice No. 1005 dated 10.3.2015.
25 VCR @ 500/= for Rs.12500 from Khan & Co. Vide
Invoice NO. 203 dated 15.3.2015.
JOURNALIZING
JOURNALIZING

82
50 radio set @ 100/= amountingto Rs.5000/= from Imran
Traders under Invoice No.400 dated 20.3.2015.
25 cameras @ 100 each amounting to Rs.2500/= from
Sumair Enterprises under Invoice NO.506 dated
28.3.2015.
PURCHSASE JOURNAL
Page No.01
DATE
NOVICE NO. NAME OF SUPPLIER
POST
AMOUNT
2015 Ref.
Jan' 10 102 Imran TradingCo. _/ 25,000
Mar’01 305 Bilal Store _/ 8,000
Mar’10 1005 AsimTraders _/ 15,000
Mar’15 203 Khan & Co. _/ 12,500
Mar’20 400 Imran Traders _/ 5,000
Mar’28 506 SumairEnterprises _/ 2,500
TOTAL 68,000
Purchases 11205 68,000
AccountsPayable 22101
JOURNALIZING

83
7-PURCHASE RETURN AND ALLOWANCES JOURNAL (PR&AJ)
Purchase Return and Allowances journal relates to credit
notes issued by supplier, who credited the account of
purchaser, against debit note of goods returned and debit
to supplier is recorded.
Purchase Return & Allowances Journal consists on
columns date, credit memorandum, Name of supplier,
post reference and amount.
Purchase Return and Allowances journal links to
controlling ledger of Accounts Payable of supplier (Dr.)
and Purchase Return and Allowances account (Cr.) and
Purchase Return and Allowances effects to subsidiary
ledger of suppliers.
A check mark (_/) is marked in Post Ref: column of sale
return and allowances journal as a proof of posting in
subsidiary of account payable.

84
JOURNALIZING
Illustration 1.4
Merchandise returned to following suppliers;
01 VCR @ 500/= for Rs.500 to Khan & Co. received
credit memo No.1023 dated 20.3.2015 against debit
memo No.102.
2 radio set @ 100/= Rs.200/= to Imran Traders under
received memo No.203 dated 25.3.2015 against debit
memo No.103.
1 cameras @ 100 for Rs.100/= to Sumair Enterprises
issued debit memo No. 104 and received credit memo No.
1036 dated 30.3.2015.

85
JOURNALIZING
PURCHASE RETURNS AND ALLOWANCES JOURNAL
Page No.01
DATE
CREDIT MEMO NO. NAME OF SUPPLIER
POST
AMOUNT
2015 Ref.
Jan' 22 201 Imran TradingCo. _/ 1,000
Mar’20 1023 Khan & Co. _/ 500
Mar’25 203 Imran Traders _/ 200
Mar’30 1036 SumairEnterprises _/ 100
TOTAL 1,800
AccountPayable 22101 1,800
PurchaseReturn & Allowances 11108
JOURNALIZING

86
8-SALES JOURNAL (SJ)
Sales journal relates to record the credit sale of
merchandise.
Sales journal consists on columns date, invoice number,
name of customers, post reference and amount.
Sales journal links to controlling ledger of Sales Account
and Account Receivable and account Receivable links to
subsidiary ledger of customer and subsidiary ledger links
to accounts receivable schedule; a list of account payable
balances of customers.
A check mark (_/) is marked in Ref: column of Sales
journal as a proof of posting in subsidiary ledger of
account receivable.
JOURNALIZING

87
Illustration 1.5
Rizwan Traders sold merchandise on account during
April 2015 as below;
100 radio set @ 200/= for Rs.16000/- to Umair Electric
vide Invoice No.2255 dated 1.4.2015.
10 T.V. set @ 1600/= for Rs.16000/= to Ali Imran & Co.
vide Invoice No. 506 dated 8.4.2015.
25 VCR @ 600/= for Rs.15000 to Murad Electronics
Vide Invoice NO. 5206 dated 15.4.2015.
50 radio set @ 200/= amounting to Rs.10000/= to Talpur
& Co. under Invoice No.1005 dated 20.4.2015.
25 cameras @ 200 each amounting to Rs.5000/=to Moon
Electronics under Invoice NO.605 dated 30.4.2015.
JOURNALIZING

88
SALES JOURNAL
Page No.01
DATE
ACCOUNT DEBITED INVOICE NO.
POST
AMOUNT
2015 Ref.
Jan'18 A.A.Enterprises 2 _/ 30,000
Apr’01 Umair Electric 2255 16,000
Apri’08 Ali Imran& Co. 506 16,000
Apr’15 Murad Electronic 5206 15,000
Apr’20 Talpur & Co. 1005 10,000
Apr’30 Moon Electronic 605 5,000
TOTAL 92,000
AccountReceivable 11203 92,000
Sales 40002
JOURNALIZING

89
1- SALES RETURN AND ALLOWANCES JOURNAL (SR&AJ)
Sales Return and Allowances journal relates to credit
notes of goods returned by customer and credit to
customer account under account receivable is recorded.
Sales Return & Allowances Journal consists on columns
date, debit memorandum, Name of customer, post
reference and amount.
Sales Return and Allowances journal links to controlling
ledger of Accounts Receivable of Customer (Cr.) and
Sales Return and Allowances account (Dr.) and Sales
Return and Allowances effects to subsidiary ledger of
customer.
A check mark (_/) is marked in Post Ref: column of sale
return and allowances journal as a proof of posting in
subsidiary of account receivable.
JOURNALIZING

90
Illustration 1.6
Sold Merchandise returned from following suppliers;
1 T.V. set for Rs.1600/=from Ali Imran & Co. and issued
a credit memo No. 2 dated 10.4.2015
1 VCR for Rs.600 from Murad Electronics and issued a
credit memo No. 3 dated 20.4.2015.
SALES RETURNS AND ALLOWANCES JOURNAL
Page No.01
DATE
ACCOUNT CREDITED
CREDIT POST
AMOUNT
2015 MEMO Ref.
Jan' 31 A.A.Enterprises 1 _/ 1,000
Apr’10 Ali Imran& Co. 2 _/ 1,600
Apr”20 Murad Electronics 3 _/ 600
TOTAL 3,200
SalesReturn& Allowances 41001 3,200
Accounts Receivable 11203
JOURNALIZING

91
Illustration 2
Apr: 1, Arshad started business with a cash of
Rs100000/= in the name of Arshad Enterprises.
2, Purchased merchandise on cash Rs.20, 000/=.
3, Paid shop deposit Rs.5000/=.
5, Purchase Furniture on cash Rs.5000/=.
6, Paid for transporting expenses Rs.1000/=.
7, Purchase merchandise on cash Rs.5000/=.
8, Merchandise purchased on credit from Yousuf
Brothers Rs.10, 000/=.
9, Sold merchandise on cash Rs.25, 000/=.
10, Sold merchandise on credit to Ameen & sons
Rs.10, 000/=.
11, Paid Electricity bill for Rs. 2000/=.
12, Paid petty cash funds Rs.3000/=.
13, Paid cash to M/s. 5,000/= to Yousuf & Brothers.
14, Goods returned to Yousuf & Brothers Rs.500/=.
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92
15, Cheque Rs.5000 received from Ameen & sons and
deposited into bank account.
16, Paid for advertising expense Rs.2000/=.
20, Sold goods returned from M/s. Ameen & sons
Rs.2000/=.
21, Merchandise purchased on credit from Ghaffar & Co.
Rs.15, 000/=.
22, Merchandise purchased on cash for Rs.5000/=
23, Merchandise sold on cash Rs. 5000/=.
24, Sold merchandise on cash Rs.2000/=.
25, Sold merchandise on account to Malik Brothers Rs.
5000/=.
28, Cash deposited into bank account Rs. 8000/=.
JOURNALIZING

93
30, paid salary to employee for the month Rs.3000/=.
30, Paid rent for the month Rs.3000/=.
30, Paid by cheque 2,000/= to Yousuf Brothers and got
5% discount over it.
30, Cash Rs.5000/= received from Ameen & Sons and
allowed Rs.200 discount.
Required: GENERAL JOURNAL

94
JOURNALIZING
GENERAL JOURNAL
Page # 1
DATE
2015
April: 1 Cash 100,000
Capital 100,000
(Arshadinvestedcashforbusiness)
2 Purchases 20,000
Cash 20,000
(Merchandise purchasefor business in cash)
3 Shopdeposit 5,000
Cash 5,000
(Paidcashfor shopdeposit)
5 Furniture &Fixtures 5,000
Cash 5,000
(Purchase furniture incash)
6 Cartage 1,000
Cash 1,000
(Paid cartage for merchandise)
7 Purchases 5,000
Cash 5,000
(Merchandise purchasedfor business incash)
8 Purchases 10,000
A/c Payable (Yusuf Bros.) 10,000
(Merchandise purchasedfromYusuf Bros.)
9 Cash 25,000
Sale 25,000
(Soldmerchandise oncash)
C/o 171,000 171,000

95
JOURNALIZING
GENERAL JOURNAL
Page # 2
DATE
2015
Apr: 9 B/f 171,000 171,000
10 A/c Receivable(Ameen&Sons) 10,000
Sale 10,000
(soldmerchandise oncredittoAmeen&Sons)
11 UtilityExpenses 2,000
Cash 2,000
(PaidElectricitybill)
12 PettyCashFunds 3,000
Cash 3,000
(PaidpettycashFundsto pettycashier)
13 A/c Payable (Yusuf Bros) 5,000
Cash 5,000
(cashpaid to Yusuf Brothers)
14 AccountPayable (Yusuf Bros.) 500
Purchase Return 500
(Goods returnedto Yusuf& Bros.)
15 Bank 5,000
A/c Receivable (Ameen&Sons) 5,000
(Cheque received form Ameen & sons & deposited)
C/o 196,500 196,500

96
JOURNALIZING
GENERAL JOURNAL
Page # 3
DATE
2015
Apr: 15 B/f 196,500 196,500
16 AdvertisingExpense 2,000
Cash 2,000
(Cashpaidfor advertising)
20 SalesReturn 2,000
A/cReceivable (Ameen&sons) 2,000
(SoldgoodsreturnfromAmeen&sons)
21 Purchases 5,000
A/cPayable (Ghaffar&Co.) 15,000
(Merchandise PurchasedfromGhaffar&Co.)
22 Purchases 5 ,000
Cash 5,000
23 Cash 5,000
Sale 5,000
24 Cash 2,000
Sales 2,000
(Sold merchandise oncash)
C/o 227,500 227,500

97
JOURNALIZING
GENERAL JOURNAL
Page # 4
DATE
2015
Apr: 24 B/f 227,500 227,500
25 A/c Receivable(MalikBros.) 5,000
Sales 5,000
(SoldMerchandise onaccountto MalikBros.)
28 Bank 8,000
Cash 8,000
(CashdepositedintoBankaccount)
30 SalariesExpenses 3,000
Cash 3,000
(Paidsalaryto employee)
RentExpenses 3,000
30 Cash 3,000
(Cashpaidfor Rent)
30 A/c Payable (Yusuf Bros.) 2,100
Bank 2,000
Purchase Discount 100
(paidto Yusuf Bros.& got5% discount)
30 Cash 5000
Sales Discount 200
A/c Receivable (Ameen & Sons) 5,200
(cash& discount receivedfrom Ameen& Sons)
TOTAL 253,800 253,800

98
JOURNALIZING
Illustration 3
The following selectedtransactions are taken from M/s.
Iqbal Traders;
2015;
July 01, Purchased merchandise from Aslam Brothers
Rs. 10,000/= vide Invoice No.320.
July 05, Purchased merchandise from Half Moon
Enterprises Rs.5000/= vide Invoice No. 430.
July 06, Purchase merchandise from General Traders of
Rs.6000/= under Invoice No.1002.
July 07, Purchase merchandise from Ismail Bros of
Rs.15, 000/= under Invoice No.502.
July 10, Received an Invoice # 600 against purchase of
merchandise of Rs.20, 000/= from A.R. Traders.
July 20, Purchase goods for Rs.10, 000/= from Shakir
Traders under Invoice No.10020.

99
JOURNALIZING
July 25, ReceivedBill No. 800 for Rs.5000/= from Akram
Electronics against purchase of goods.
July 30, Merchandise purchase on credit fromM/s. Azad
Store for Rs.20, 000/= under Invoice No. 108.
Prepare;
Purchase Journal
PURCHSASE JOURNAL
Page No.01
DATE
NOVICE NO. NAME OF SUPPLIER
POST
AMOUNT
2015 Ref.
Jul’1 320 Aslam Brothers _/ 10,000
5 430 HalfMoonEnterprises _/ 5,000
6 1002 General Traders _/ 6,000
7 502 IsmailBrothers _/ 15,000
10 600 A.R. Traders _/ 20,000
20 10020 Shakir Traders _/ 10,000
25 800 Akram Electronics _/ 5,000
30 108 Azad Store _/ 20,000
TOTAL 91,000
Purchases 11205 91,000
AccountsPayable 22101 91,000

100
JOURNALIZING
Illustration 3.1
July 10, Merchandise returned to Aslam Brothers
Rs.1000/= credit memorandum NO.3005.
July 12, Merchandise returned to Half Moon
Enterprises Rs.500/= under credit memo # 2501.
July 15, Debit Note issued to M/s. General Traders for
Rs.300/=of damaged goods returns, and received credit
note No. 1102.
July 20, merchandise return to M/s. A.R. Traders for
Rs.500/= vide credit memo No.300.
Prepare;
Purchase Return & Allowances Journal

101
JOURNALIZING
PURCHASE RETURNS AND ALLOWANCES JOURNAL
Page No.01
DATE
CREDIT MEMO NO. NAME OF SUPPLIER
POST
AMOUNT
2015 Ref.
Jul” 10 3005 Aslam Brothers _/ 1,000
12 2501 Half Moon Enterprises _/ 500
15 1102 General Traders _/ 300
20 300 A.R. Traders _/ 500
TOTAL 2,300
Account Payable 22101 2,300
Purchase Return & Allowances 11108 2,300

102
JOURNALIZING
Illustration 3.2
July 1, Sold merchandise to Hakim & Co. Rs.15, 000/= vide Invoice
No.005.
July 2, Sold merchandise to Rahim & Karim Traders Rs.5, 000/= vide
Invoice No. 006.
July 6, issued an Invoice No.007 for Rs.15, 000/= on account of
merchandise sold to M/s. Mushtaq & Co.
July 10, Sold merchandise on account to M/s. Khan Khan Traders for Rs.
10,000/= vide Invoice NO. 008.
July 15, Merchandise consigned to Ashraf Brothers for Rs.10, 000/=
under Invoice NO.009.
July 20, Merchandise sold to Imran Sons for Rs.5, 000/= under Invoice
No. 010.
July 25, Merchandise sold to Kamran & Brothers for Rs.6, 000/= vide
Invoice No. 011.
July 30, Goods on account to M/s. Nadeem & Co. for Rs.10, 000/= vide
invoice No. 012.
Prepare;
Sales Journal

103
JOURNALIZING
SALES JOURNAL
Page No.01
DATE
ACCOUNT DEBITED INVOICE NO.
POST
AMOUNT
2015 Ref.
Jul’01 Hakim & Co. 005 _/ 15,000.-
2 Rahim & Karim Traders 006 _/ 5,000.-
6 Mushtaq& Co. 007 _/ 15,000.-
10 Khan Khan Traders 008 _/ 10,000.-
15 Ashraf Brothers 009 _/ 10,000.-
20 Imran Sons 010 _/ 5,000.-
25 Kamran & Brothers 011 _/ 6,000.-
30 Nadeem & Co. 012 _/ 10,000.-
TOTAL 76,000
Account Receivable 11203 76,000
Sales 40002 76,000

104
JOURNALIZING
Illustration 3.3
July 5, Merchandise return from Hakim & Co. Rs.500/=
and issued them a credit memo No. 101.
July 6. Received merchandise as return from M/s.
Rahim & Karim Traders Rs.500, issued credit memo No.
102.
July 12, damaged goods return from Khan Khan Traders
Rs.500/= credit memo No. 103.
July 20, Goods return fromAshraf Brothers Rs.1000/=as
damaged during transportation credit memo No. 104.
July 30, Merchandise return from;
Kamran & Brothers Rs.200/= credit note # 105.
Nadeem & Co. Rs. 500/= credit note # 106.

105
JOURNALIZING
SALES RETURNS AND ALLOWANCES JOURNAL
Page No.01
DATE
ACCOUNT CREDITED
CREDIT POST
AMOUNT
2015 MEMO Ref.
Jul’5 Hakim & Co. 101 _/ 500.-
6 Rahim& KarimTraders 102 _/ 500.-
12 Khan KhanTraders 103 _/ 500.-
20 Ashraf Brothers 104 _/ 1,000.-
30 Kamran Brothers 105 _/ 200.-
30 Nadeem& Co. 106 _/ 500.-
TOTAL 3,200.-
SalesReturn& Allowances 41001 3,200.-
AccountsReceivable 11203 3,200.-

106
JOURNALIZING
Something about journalizing;
The journalizing is the art of recording business transactions in
journals like general journal, cash book, petty cash book, cash receipt
journal, cash payment journal, purchase journal, purchase return and
allowances journal, sales journal, sales return and allowances journal
and many other creations in journals according to the nature or
volume of business designed to make easy book keeping.
All journals require source document means evidence of transaction
which supports to voucher and voucher helps recording in journals.
The example of journalizing we take from a diary maintains to
memorize day to day events either in personal life or in business
operation.
In connection with journalizing I must say only that the journal is the
structure of accounting that supports to whole accounting strategies
and crystallizes the system of accounting.
Writer’s view

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