Accounting: Journal Proper and Worked Out Example: Outstanding and Prepaid Expenses (For CBSE, ICSE, IAS, NET, NRA 2022)

Doorsteptutor material for competitive exams is prepared by world's top subject experts: get questions, notes, tests, video lectures and more- for all subjects of your exam.

Transactions which are not come under any book which are mentioned above will be recorded in Journal Proper. Basically these transactions do not occur frequently. Transactions such as

(i) Outstanding expenses – Salaries outstanding, Rent outstanding, etc.

(ii) Prepaid expenses – Prepaid Rent, Salaries paid in advance.

(iii) Income received in advance – Rent received in advance, interest received in advance, etc.

(iv) Accrued Incomes – Commission yet to be received, interest yet to be received.

(v) Interest on Capital

(vi) Depreciation

(vii) Credit Purchase and Credit Sale of fixed Assets – Machinery, Furniture.

(viii) Bad debts.

(ix) Goods taken by the proprietor for personal use.

Will be recorded in Journal Proper.

Worked Out Example

Enter the following transactions in the Journal of Shan India Ltd.

Table Supporting: Worked_out_Example
DateParticularsAmount (₹)
2011January 1Shan started business with cash50,000
January 3Goods purchased for cash30,000
January 3Furniture purchased for cash5,000
January 7Sold goods for cash10,000
January 9Sold goods to Naresh kumar8,000
January 12Goods purchased from Vinod5,000
January 16Goods sold to Raja and allowed him 10 % trade discount6000
January 22Cash received from Naresh Kumar in full settlement of his account7600
January 25Cash paid to Vinod and he allowed discount of ₹ 1001900
January 28Cash paid for purchase of Stationary250
January 31Paid office Rent800
January 31Goods returned to Vinod500

Journal of Shan India Ltd. For the month of January, 2011

Table Supporting: Worked_out_Example
DateParticularsL. FAmount (₹)
Dr.Cr.
2011

Jan 1

Cash A/c Dr.

To Capital A/c

(Started Business with cash)

5000050000
Jan 3Purchases A/c Dr.

Furniture A/c Dr.

To Cash A/c

(Goods and Furniture purchased for cash)

30,000

5,000

35,000
Jan 7Cash A/c Dr.

To Sales A/c

(For sale of goods on cash)

10,00010,000
Jan 9Naresh Kumar A/c Dr.

To Sales A/c

(Sale of goods to Naresh on credit)

8,0008,000
Jan 12Purchases A/c Dr.

To Vinod A/c

(Goods purchased from Vinod on Credit)

5,0005,000
Jan 16Raja՚s A/c Dr.

To Sales A/c

(Sale of goods to Raja on 10 % trade discount)

6,0006,000
Jan 22Cash A/c Dr.

Discount A/c Dr.

To Naresh Kumar A/c

(for receipt of sales amount)

7,600

4,00

8,000
Jan 25Vinod A/c Dr.

To Cash A/c

To Discount A/c

(for payment made to Vinod)

2,0001,900

1,00

Jan 28Stationary A/c Dr.

To Cash A/c

(for purchase of stationary)

250250
Jan 31Rent A/c Dr.

To Cash A/c

(for the payment of rent)

800800
Jan 31Vinod A/c Dr.

To Purchases Return A/c

(for the return of goods to Vinod)

500500

Developed by: