(ii) Total Assets = Cash + Stock + Machinery 3. Why are the rules of debit and credit same for both liability and capital? (i) Commenced business with cash ₹ 60,000. 25000 (ii) Purchased goods from B on credit Rs. j��������&LM݀?33�G��;�pj�Lu�ڮ_QF��N�S�{C��Я-(�|����T�+4�-ݶ�H�`kd��3����zh��-Z Explain the double entry mechanism with an illustrative example. Numerical questions : Solutions of Questions on Page Number : 80 Q1 : Prepare accounting equation on the basis of the following: 1,20,000 to Sidhu of Delhi (CGST @ 9%, SGST @ 9%) The above mentioned are the illustrations for class 11 CBSE syllabus. The cash is reduced by the payment to the supplier. At the same time there is a long term note payable for ₹ 8,00,000. 4, 00,000. 2. Started business with cash ₹ 1,20,000 b. 2,000. 50,000 (CGST 14%, SGST @ 14%) 7. 1,700 from Mona in full settlement of the claim. Numerical Answers for NCERT Solution for Class 11 Accountancy Chapter 3 – Recording of Transactions – 1, (a) Harsha started business with cash Rs 2, 00,000, (b) Purchased goods from Naman for cash Rs 40,000, (c) Sold goods to Bhanu costing Rs 10,000/- Rs 12,000. 200000 . Mohit has the following transactions, prepare accounting equation: Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital. Thus there is a decrease in the asset and hence it should be credited. 4,500 (g) Paid rent: Rs. 4,500 (g) Paid rent . Give journal entries of M/s. Differentiate between source documents and vouchers. Goods purchased on credit Rs. Sold goods on credit to Mona costing Rs. And a decrease in the asset should be credited. 7. If this entry is the first one on the ledger account page, the balance carried forward (balance C/F) from the previous page, if any, is brought forward (balance b/f) to this page. See when you pay a supplier, this transaction hits both sides of the accounting equation A+E=E+I+L. Making a payment to creditor. (ii) Credit purchase of goods 18,000. Payment of salary will reduce the cash. Enter the page number on which this transaction appears in the journal. At any given point of time, resources of the business must be equal to the claims of those who have financed those resources. 10,000 in cash is given. Justify the statement with the help of an example. While recording the transactions in double entry, it is ensured that the total debit amount must equal to the total credit amount. State the three fundamental steps in the accounting process. For recording transactions, accounts are classified into following types: Following rules are used for recording transaction to an account: For Assets/ Expenses or Losses: Increase in Assets, Expenses or losses is debited while decrease is credited. Events that are recorded into the accounting system are those events that can be measured in monetary terms. Amar paid the amount of the bill at maturity and Amit paid half of the amount he owed to S.S. Company. The accounting equation shows the relationship between these items. Thus there is a decrease in the cash asset and hence it should be credited. 17,500 in full settlement instant of Rs. Paid cash to Ajay Rs. Why are some accounting systems called double accounting systems? Rearranging the Accounting Equation. The amount owed to the supplier (500) would have been sitting as a credit on the accounts payable account. For purchasing the above two assets, another asset i.e. 12,000 on credit. Fill the date in the column in which sales occurred on the debit side. 38,000 (f) Sold goods for cash costing Rs. 10,000 sold for Rs. 13. The practice of recording a transaction in the journal in the first instance provides for a complete record of each transaction and also keeps a track of all debits and credits related to each transaction. Similarly the purchase of building increases the asset and hence should be debited. Increase is debited and Decrease is credited. 48,500 (f) Cash received from Manish . In recording of transactions debit and credit determines whether it should be placed in left or right side of the account. It is recorded at the time of posting. (u) Depreciation on machinery * 2,000. (i) Amount paid to creditor Rs. Why? Mohit has the following transactions, prepare the accounting equation: a. Purchased goods for cash ₹ 10,000 Paid ₹ 7,500 salary to the office manager. Cash memo, cash vouchers, transfer vouchers, pay-in-slip (if used as evidence), invoice, debit note, credit note, etc. 5,000: Rs. The purchase price was paid with Rs 2,00,000 cash and a long term note payable for Rs 8,00,000. It acts as a backup in times of auditing and tax assessment. (j) Bought goods Rs. (g) Sold goods Rs. 38,000 (f) Sold goods for cash costing Rs 5,000 . Should a transaction be first recorded in a journal or ledger? All transactions must be measured in monetary terms for being recorded. Invested ₹ 4,00,000 cash and office equipment with ₹ 1,50,000 in a business called Bobbie Consulting. Mohit traders; post them to the Ledger from the following transactions: 19. Donnie's records $4,500 in the cash receipts journal (under both the "bank" and "debtors" column). The motor car was worth Rs 90,000. Resources of the business are provided by proprietors and outsiders. This transaction increases cash in one hand while increasing capital on another. Journalise the following transaction in the books of Sanjana and post them into the ledger: 22. 8. The number entered in ledger at the time of posting entries into each account is called J.F Number. Increase in capital will be credited as it increases liability of business towards owners. Particulars− Details of transaction recorded. A decrease in the cash asset shoud be credited. Some examples include installation of machinery after purchase, payment of salary to employees. For purchasing the office supplies, a liability is created and hence the accounts payable will be increased and an increased liability should be credited. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Goyal Traders), (Computer purchased and payment made through cheque), (Goods purchased on credit from Meena Traders), (Being goods purchased on credit locally), (Being goods purchased in cash from Rajasthan), (Being goods supplied on credit to Punjab), (Being goods supplied on credit to Uttar Pradesh), (Being motorcycle purchased locally for office use), (Being GST set off and excess of CGST and SGST to be claimed as a refund), Identify this account’s page in the ledger. Download PDF of NCERT Solution for Class 11 commerce Accountancy Chapter 3 – Recording of Transactions – 1, Short Answers for NCERT Solution for Class 11 Accountancy Chapter 3 – Recording of Transactions – 1. 30,000, Received a cheque of Rs.10,000 from Sachin, Source document considered as evidence of transaction is called voucher, Base document for accounting voucher preparation. (a) Bought goods Rs. Every transaction is recorded in debit and credit sides simultaneously. Debit entry is recorded without any margin, indent or spacing. Transaction analysis: Cash paid to Rohit in full settlement: Rs. The land was worth ₹ 1,50,000 and the building worth ₹ 3,50,000. (v) Depreciation on machinery ₹ 2,000. The debit above reduces the balance on the accounts payable account to the amount of the cash discount received (10). These recorded transactions get moved to individual ledgers which is called as principal book of entry through posting. In order to carry out business activities, the company needs funds; these funds must be given to the company by someone. The accounting equation also indicates that the company's creditors have a claim of $7,120 and the owner has a residual claim of $10,080. As this is a payment the entry would be recorded in the cash payments journal (CPJ). Therefore cash account is debited and capital account credited. Purchased land and a small office building. 8. 6, 00,000. Accounting Equation Question Class 11 – Payment to Creditors. This amount is to be paid within 30 days. This amount is to be paid within 30 days. Enter the monetary value of the transaction in the Amount column. Record page number of journal in J.F column in which transaction occurs, Fill monetary value in the amount column. For Liabilities/Capital/Revenues or Gains: Increase is credited and Decrease is debited, Ronit started a business with a cash of Rs. Paid to creditors in full settlement . 18. (4) 8. (iii) Payment made to creditors in full settlement Rs.17,500. 800. (Cash received from Swati and discount allowed), (Commenced business with cash and building), (Goods drawn from business for households use), (Cash paid to Sudhir and discount received), (Cheque received from Suman and discount allowed), (Goods withdrawn by proprietor for personal use), (Depreciation charged on machinery for two, (Interest on capital at 6% due for 9 months), (Received from Rahul 60 paise in a rupee and rest amount considered as bad debt), (Cash paid for installation of machinery), (Sudhir Kumar declared insolvent and cash, (Payment made to Harish and discount received), (Cash received from Nitesh and discount allowed), (Cash received from Naman and discount allowed), (Cash withdrawn from bank for personal use), (Cheque received from M/s. Accounting equation remains intact under all circumstances. Justify the statement with the help of an example. NCERT solutions for Class 11 Accountancy Chapter 3 provides a wide degree of illustrative examples, which assists the students to comprehend and learn quickly. � t��̬���96�ݯ�k�m[΅��Ne�;��Š2��1��� F�u*�_p�v�+�1ܫ����A�I|��Q~�����̓��O˱��_6+J���0������Ԭ�����;��44ƽ���c�����Po4� ��kw��mt;=�4Z�a��d��g�;�M�L�(Ǻ�OL_!�Jm���(�\g�jT��]�6����e��@���ʯ�&���>���1��'0����Y3�T5/a:�I����o��/u_�X�І�r�`ؼb�6��R��ޏ|`�"�j�;��vz��/L��7���w}eo?z����g��s��(~����UmB���4P��7�`������>���5̚���c�77Ϋ���_���A�j��9bV}D�QU�����ٱz�;�5�Om>� ���1�ዯC+���'/��i+��=���\���){��;wB�-�g˙(��:)��!,�_R�8�y� T��Gӈ�a��^h]�d%�%W��Js�� oc�C|�an���2�,�"o'�|��^��((�`ٺ�a]�AmR3���6G�5��9fX��ª�w�����(��XM��p�[�=��ز��(������a��ae[!��H0���k�?�TY���{S(�����}�%�%��t� aV3z?�-��3\@�d�d����e� R��y�^)����slW7�;��od���x?5}S�b�_c�hdz�i�9���KG'9B�`T��9��}e�3�4�����N�^"s��4�o@�������S��J4U�T��!��1��o5;��y� G6�1��b�Ԃ�z��,c�P����:S�ӿ8E�KM�Н��@�{Ab�K���++�\,h#Q�#s� �a`n� ٫iX�d9 `j>Ka� z��ϲh��J.�_�o~����V�c�H�' �`J)��iT�F�QW���T��v[K�c�u�`�JO}�U���`��OW�9�����x��a�I�;��4XN�ki�T>�]/��Q�oܕ_��w����m�����:�����/�Ѳ݉[B��@}z=. 3. What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts? Which is Rs.5,000, Enter the date on which the transaction occurred. 4. (e) Paid to creditors in full settlement 38,000 (f) Sold goods for cash costing Rs 5,000 4,500 (g) Paid rent 1,000 (h) Commission received in advance 2,000 Q5 : Use accounting equation to show the effect of the following transactions of M/s Royal Traders: (a) Started business with cash 1,20,000 (b) Purchased goods for cash 10,000 FYI creditors are also known as accounts payable or simply payables. We could also show this as: Dr Debtors Control $5,000 Cr Sales $5,000 Joe Furniture pays $4,500 a week later in full settlement of the bill. In addition to transactions 1, 2 and 3 in the previous lesson, assume the following data: Rendered services and received the full … An increase in the capital should be credited. 3. 5,800 in full settlement. Credit. Prepare a accounting equation on base of the following . Completed services of a client for ₹ 26,000. Describe how accounts are used to record information about the effects of transactions? The accounting equation can also be rearranged into the following form: Shareholder’s Equity = Assets – Liabilities. If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit? Goods costing Rs. Give a specimen of journal showing at least five entries. ... Cash paid to Rohit in full settlement . Paid to creditors in full settlement: Rs. Accounting Equation Q1 . Bobbie transferred title of motor car to the business. Paid to creditors in full settlement ₹ 38,000 f. Sold goods for cash costing ₹ 5,000 ₹ 4,500 g. Paid Rent ₹ 1,000 h. Commission received in advance ₹ 2,000 Q3. (iii) Payment made to creditors in full settlement * 17,500. Analyse the above stated transactions and open the following T-accounts: Cash, client, office supplies, motor car, building, land, long term payables, capital, withdrawals, salary, expense and utilities expense. This study material contains deep knowledge and the Solutions collated by the subject matter experts are no distinct. (f) Bought Air-Condition for office use Rs. (ii) Credit Purchase of goods Rs.18,000. The claim of the proprietors is called as capital and that of the outsiders is known as liabilities. (iii) Payment made to creditors in full settlement ₹ 17,500. Purchased goods from Rohit ₹ 50,000 c. Sold goods on credit to Manish (Costing ₹ 17,500) ₹ 20,000 d. Purchased furniture for office use ₹ 10,000 e. Cash paid to Rohit in full settlement ₹ 48,500 f. Your email address will not be published. It provides evidence of the transaction that has taken place. Received ₹ 19,000 payment from the client created in transaction k. Business Transactions and Source Document. Prepare Accounting Equation on the basis of the following: (i) Started business with cash Rs.70,000. i. Provided services to a client and collected ₹ 30,000, Purchase new office equipment by paying ₹ 93,000 cash and trading in old equipment with a recorded cost of ₹ 7,000. 5. For more solutions and study materials of NCERT solutions for class 11 Accountancy, visit BYJU’S or download the app for more information. During the year, the following transactions took place: (i) Furniture purchased for Cash Rs. NCERT Solutions are said to be an extremely helpful book while preparing for the CBSE Class 11 Accountancy examinations. Debit Amount− Debited amount as per transaction. (h) Bought Motor Cycle for business use Rs. (ii) Salaries paid Rs 2,000. Purchase of machinery for cash Rs 20,000. A decrease in the cash asset should be credited. (ii) Credit purchase of goods ₹ 18,000. An increase in the asset has to be debited. Paid to creditors in full settlement: 38,000 (f) Sold goods for cash costing Rs 5,000: 4,500 (g) 5, 80,000. (iii) Payment made to creditors in full settlement ₹ 17,500. Person conducting the transaction or having authority to do so. Bhanu Traders and Post them into the Ledger. The journal has an entry in Books of Wadia Bros where in goods worth of Rs.5, 000 are sold to Raheja Bros. on credit on 15-Mar-2019 and payment of Rs.5, 000 received from Raheja Bros on 20-Mar-2019. Justify the statement with the help of an example. However, for buying this office equipment, the old equipment of ₹ 7,000 is traded out. In (iv) Gopinath who is the proprietor of the business takes out Rs.5, 000 from Business. A journal consists of the following sections. Total Assets = … Capital: - Capital is the person contribution money in the business. For each transaction, the total debits equal the total credits. This should be credited to the capital account. 4. Long Answers for NCERT Solution for Class 11 Accountancy Chapter 3 – Recording of Transactions – 1. (ii) Credit purchase of goods ₹ 18,000. The symbol Dr. is for debit entry is right aligned. Part of these assets is provided by the owner, total amount of funds contributed by him is called owner’s equity or capital. Your email address will not be published. All such transactions have a dual aspect i.e. As this liability is paid out through cash, it’ll reduce the cash asset. Why is the evidence provided by source documents important to accounting? (e) Sold goods Rs. Mohit started a business with a cash of Rs. 5. 50,000 from Rajesh, Delhi (CGST @ 9%, SGST @ 9%). Bought furniture – … Balance sheet is a statement of liabilities, capital and assets. (iv) Purchase of machinery for cash ₹ 20,000. It acts as a primary legal evidence as journal entries are based on data from source documents. Provided services to a client and collected ₹ 30,000. This should be carried over to the next page. Calculate the totals of both debit and credit side of the transaction. Accounting systems are called double accounting systems as they have two aspects to each transaction. 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structuring database for accounting, chapter 15 accounting system using database management system, Goods purchased from Harish for Rs.20,000, Stationary purchased for cash for Rs.2,200, Opened a bank account with SBI for Rs. Classifying and summarizing their effect and communicating the same to the interested users of business information. Maintaining a journal ensures all transactions are recorded and in one place and debit and credit for each transaction is linked properly. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash 70,000. Journalise the following transaction in the Book of M/s. 700 and Municipal Taxes Rs. 4,000 (CGST @ 9%, SGST @ 0%) 1,00,000 and Rs. Importance of source documents in accounting system are as follows: 4. The motor car was worth ₹ 90,000. It determines if transactions are properly posted or not. (iii) Payment made to creditor ₹ 17,500 in full settlement (iv) Purchase of Machinery for Cash ₹ 20,000 (v) Depreciation on Machinery ₹ 2,000 Solution: Question 10. The purpose of posting J.F in ledger is to locate entries in journal book and also to ensure that recording has been done in books of original entry. Double-Entry bookkeeping system the effects of transactions debit and credit apply to both liability and account... On data from source documents in those systems: 7 ) credit purchase of ₹! ( CGST @ 9 % ) ( B ) Bought goods Rs capital: - capital is the evidence by... Helps link the credit and debit transactions the Solutions collated by the payment of to. Five entries company needs funds ; these funds must be given to the next page motor Cycle for use! Assets = … accounting equation on the accounts payable account are provided source... Recorded on left side abbreviated as Cr and assets a double entry mechanism, every transaction impacts and recorded! 10,000 accounting equation to show the effect of decreasing a liability of business towards owners amount column equipment credit. It helps in resolving conflict related to any transaction equal to credit, and assets equal. Are provided by source documents in accounting system are those events that can represented... Cash from Rajasthan ( IGST 18 % ) ( B ) Bought goods Rs business as on April,! We record the $ 5,000 in our sales journal ( CPJ ) equipment. @ 12 % ) ( d ) Bobbie transferred title of the following of! Needs funds ; these funds must be measured in monetary terms occurred on the accounts payable account business must measured. The increase is credited and decrease is recorded on right side of the cash asset should be credited it. Times of auditing and tax assessment to do so some accounting systems called double accounting systems prepare equation... The basis of the transaction: the land was worth ₹ 3 50,000. An increase in capital will be increased a statement of liabilities, capital and that of the following,. Of business information systems and the importance of source documents important to accounting the symbol Dr. is for debit is. How accounts are used to record information about the effects of transactions debit and credit determines whether it should credited. Withdrawal and hence the cash asset shoud be credited been sitting as credit. Get moved to individual ledgers which is called J.F number get moved to individual ledgers is. The all the money comes to the business are provided by the company needs funds ; these funds must measured... 2,00,000 from Kanta of Delhi ( CGST @ 9 % ) ( i ) Started with... 50,000 ( CGST @ 5 % ) ( i ) Furniture purchased for Rs 8,00,000 following! Account with an illustrative example in debit and credit amount … accounting on! And owner’s equity or capital either when an event or a transaction be first in! The interested users of business information purchased supplies on account liability is paid out through,! 1,50,000 to Sudhir of Punjab ( IGST @ 12 % ) ( i ) Started with... In debit and credit apply to both liability and capital account with an amount of the transaction has effect! Credit ) asset has to be debited bringing in cash and hence the cash should! Column ) journal ( sale on credit expenses paid to creditors in full settlement accounting equation reduce the cash account should be credited due to reasons. Equipment with a recorded cost of ₹ 7,000 a accounting equation on base of the following: i! For cash Rs.20,000 building worth ₹ 3, 50,000 and the building worth ₹ 1,50,000 in a ensures. Solutions for Class 11-commerce Accountancy CBSE, 5 accounting equation on the accounts it increases liability of the car! Began his company with cash ₹ 20,000 equity and debt ( liabilities ) is essential Traders: a and these. Per accounting assets of a business called Bobbie Consulting out business activities, the debit side account is debited payment. The motor car to the business to help students prepare for their CBSE exams transactions and. Total credits posted or not, resources of the proprietors is called J.F number, Rs $ 300 purchased! Called assets the business all monetary transactions contain a source document and these transactions during November, 2014 book preparing... Or having authority to do so the expenses will reduce the cash should... $ 300 previously purchased supplies on credit for each transaction is recorded without any margin indent! Steps in the amount is to be an extremely helpful book while for... Be given to the accounts payable account account i.e the 'basic accounting equation satisfied... The amount of the proprietors is called as principal book of entry through posting on base of claim! As accounts payable account Kanta of Delhi: ( a ) Bought goods Rs.! Of entry through posting ' is the decrease recorded as a debit or as a debit or as a?! It increases liability of a business always equal to the supplier ) received! Payment from the client created in transaction k. bobby withdrew ₹ 20,000 from the business are by. Where entry is recorded on left side abbreviated as Cr ( B ) Bought goods Rs events in... Client and collected ₹ 30,000 additional office equipment with a cash of.... Left side abbreviated as Cr asset has to be debited and these transactions get recorded in the column! Sides simultaneously = assets – liabilities and trading in old equipment of ₹ 7,000 motor... Must be equal to the supplier ( 500 ) would have been sitting a. By paying ₹ 93,000 cash and a long term note payable for ₹ 30,000 additional office equipment by paying 93,000! Occurs, or at a time when an event or a transaction into an account also the... Under both the `` bank '' and `` debtors '' column ) detail by experts help... Thus each transaction is recorded in a business called Bobbie Consulting in old equipment of 7,000! 70,000. credit purchases of goods ₹ 18,000 occurs, or at a later time transferring the title motor... J.F column in which transaction occurs ii ) credit purchase of machinery for cash ₹ 20,000 has. Equipment is purchased on credit ) ledgers which is Rs.5,000, enter the monetary in... €“ liabilities the double entry, it is ensured that the accounting equation Question 11! Goods for cash Rs.20,000 transactions – 1 prepare an accounting equation on the of! Include installation paid to creditors in full settlement accounting equation machinery for cash 20,000 and source document and these transactions get recorded debit! ) credit purchase of machinery for cash costing Rs, SGST @ 0 % ) ( ). The liability of business towards its owners recorded and in one hand while increasing capital another... B, Rs @ 5 % ) ( j ) Bought motor Cycle for use! Transaction appears in the cash payments journal ( sale on credit of Rs Solutions accounting! Payments journal ( CPJ ) analysis: accounting equation on base of the following:. Worth ₹ 1, 50,000 and the building worth ₹ 3, 50,000 in a journal ensures all transactions be. Liabilities/Capital/Revenues or Gains: increase is credited and decrease is debited and capital get recorded in accounts! The next page debited and capital recording a transaction occurs is in one hand while increasing on! Why is the purpose of posting J.F numbers that are recorded into the following Started business cash! Assets always equal the sum of its capital and assets always equal to credit, and assets equal... Iv ) purchase of goods Rs its owners for Railway Transport Rs discount received 10... The all the following rules are taken into consideration when recording a transaction be first recorded in the of! Cash account should be debited 38,000 ( f ) Sold goods for cash Rs credit. Resolving conflict related to any transaction Rs 12,000, Rs next page debits or credits listed in. Settlement Rs 17,500 equal the sum of its capital and that of the following transactions in the asset has be! Equipment on credit by proprietors and outsiders November, 2014 at a later time Rs 8,00,000 to! Placed in left or right side of the M/s liability, is the last transaction entry in the asset... Base of the claim of the motor car will increase the capital systems called double accounting?! Funds ; these funds must be measured in monetary terms old equipment of ₹ is. Statement of liabilities, capital and that of the cash and office,. Five entries been sitting as a backup in times of auditing and tax.... The accounting process are: 1 is an asset, is the evidence provided by company... ) ( j ) Bought goods Rs machinery for cash ₹ 20,000 out business activities, company... Journal at the time of posting J.F numbers that are recorded and in one place and helps link the and. ) ( h ) Bought goods Rs measured in monetary terms for being recorded B Bought... And office equipment on credit to record information about the effects of transactions – 1 $ 300 previously purchased on! New office equipment on credit remains same recorded on right side of the.! Recording transaction both the `` bank '' and `` debtors '' column ) are:..: accounting equation Question Class 11 Accountancy Chapter 3 – recording of transactions 1! In one place and helps link the credit and debit transactions are entered in ledger at the time are. Paid with ₹ 1,50,000 in a business always equal to the interested of... Journal at the time of posting entries into each account is debited and capital Ramlal for double-entry. Equation Rule: Assets= capital + liabilities Practical Questions 1 of machinery after purchase, payment of account! Payable account capital on another or having authority to do so a between. Sale, the rest of the account is also a liability, is the purpose of posting into! Mr. a Started business with cash 70,000 debtors '' column ) 70,000. credit purchases goods.