2. Accountancy is the process of communicating fina
ncial information about a business entity to users
such as shareholders and managers. Inputs into ac
counting include journal entries, the bookkeeping
process, and the general ledger..
5. The double entry system of accounting or bo
okkeeping means that every business transa
ction will involve two accounts (or more).
For example, when a company bor
rows money from its bank, the company's C
ash account will increase and its liability acco
unt Loans Payable will increase.
7. Journal is the prime or original book of entry in which all transactions are recor
ded in the form of entries. Journalising is an act of recording or entering transa
ctions in a Journal in the order of date.
Date Particulars LF Debit
Amount
Credit Amou
nt
8. Jan 1, 1981 Prakash Started a business Rs. 15,000/-
Date Particulars LF Debit
Amount
Credit Am
ount
1981
Jan 1
Cash a/c Dr.
To Prakash’s Capital a
/c
(Being cash invetsed to
business)
15,000
15,000
9. Ledger is a book which contains all
accounts of the business enterprise
whether personal, real or normal.
The ledger is the chief book of accounts ,
and it is the book that include all accounts.
10. Trial balance is the list of all debit and credit
balance,taken out of from ledger.
It includes the balances of cash and bank
taken from cash book.
Trial balance is a statement, prepared with
the debit and credit balances of ledger
account to test the arithmatical accuracy of
the books.
11. Enter the following transactions in journal and post them into
the ledger and also prepare a trial balance.
2005
Jan. 1 Mr. X started business with cash $80,000 and furniture
$20,000.
Jan. 2 Purchased goods on credit worth $30,000 from Y.
Jan. 3 Sold goods for cash $16,000.
Jan. 4 Sold goods on credit to S for $10,000.
Jan. 8 Cash received from S $9,800 in full settlement of his
account.
12. Date
2005
Particulars L.F DR.
Amount ($)
Cr.
Amount ($)
Jan. 1 Cash A/C 5 80,000
Furniture A/C 7 20,000
Capital A/C 9 1,00,000
(Owner invested cash and furniture)
Jan. 2 Purchases Account 11 30,000
Y 13 30,000
(Bought goods on credit)
Jan. 3 Cash A/C 5 16,000
Sales A/C 15 16,000
(Sold goods for cash)
Jan. 4 S A/C 17 10,000
Sales A/C 15 10,000
(Sold goods on credit)
Jan. 8 Cash A/C 5 9,800
Discount A/C 19 200
S A/C 17 10,000
(Cash received and discount allowed)
Journal
13. Date references J.R Debit Credit Balance
2005 Dr. Cr.
Jan. 1 Capital A/C 5 80,000 80,000
Jan. 3 Sales A/C 5 16,000 96,000
Jan. 8 S A/C 5 9,800 105,800
Date references J.R Debit Credit Balance
2005 Dr. Cr.
Jan. 1 Capital A/C 5 20,000 20,000
Date references J.R Debit Credit Balance
2005 Dr. Cr.
Jan. 1 Cash A/C 5 80,000 80,000
Jan. 1 Furniture A/C 5 20,000 1,00,000
Ledger
Cash Account (No.5)
Capital Account (No.7)
Furnitura Account (No.9)
14. Date references J.R Debit Credit Balance
2005 Dr. Cr.
Jan. 2 Y A/C 5 30,000 30,000
Date references J.R Debit Credit Balance
2005 Dr. Cr.
Jan. 2 Purchases A/C 5 30,000 30,000
Y Account (No.13)
Date references J
.
R
Debit Credit Balance
2005 Dr. Cr.
Jan. 3 Cash A/C 5 16,000 16,000
Jan. 4 S A/C 5 10,000 26,000
Purchases Account (no.11)
Sales account (no.15)