Journal

Meaning
Features
Functions
Advantage
Limitations
Format of journal
Steps in journalising
Rules of journalising
Meaning of goods
Illustration
Exercise

1. CAREER POINT UNIVERSITY School of commerce & Management

2. Acknowledgement I would like to express my special thanks of gratitude to my teacher (Pragya Bhargav Ma’am ( my mentor); Assistant professor ; school of commerce & management ) who gave me the golden opportunity to do this wonderful project on the topic (Cash-Flow Statement),which also helped me in doing a lot of Research and I came to know about so many new things I am really thankful to them. Secondly I would also like to thank my parents who helped me a lot in finalizing this project within the limited time frame.

3. journal

4. Content : Meaning Features Functions Advantage Limitations Format of journal Steps in journalising Rules of journalising Meaning of goods Illustration Exercise

5. Meaning : Journal is a book of original entry in which the transaction are recorded first of all, as and when they take place.

6. Features of journal : It is a book in which the transaction are recorded first of all, as and when they take place. It is daily accounting record. In journal, transaction are recorded in a chronological order i.e., in a date-wise order. Each entry in the journal is followed by a brief explanation of the transaction which is called “narration”. A journal is only a book of original entry.

7. Functions of Journal : To keep a chronological order(i.e. date-wise) record of all transaction. To analyse each transaction into debit or credit aspects by using double-entry system of book-keeping. To provide a basis for posting into ledger. To maintain a identity of each transaction by keeping a complete record of each transaction at one place on a permanent basis.

8. Advantage of a Journal : The possibility of omission of a transaction is minimised due to regular transaction entered. E asy to locate each transaction due to recording in chronological order. Easy to post into ledger. It is a permanent record of transaction.

9. Limitation of Journal : It is very bulky and voluminous in size due to huge transaction. It is very costly. Need a proper knowledge to record a transaction. It is very time consuming process.

10. Format of journal : Date Particulars Ledger Folio (L.F.) Amount Dr. ₹ Amount Cr. ₹

11. Steps in journalising : Before recording a journal entry, it is essential to analyse a transaction in order to determine the two accounts which are affected. It is not necessary to use word “A/c” after personal accounts. After every journal entry, a line should be drawn in particular column, so that each entry is separated from preceding one. At the end of each page, both Dr. & Cr. Columns totalled up in front of each other. The word “carried forward C/F” written at the end of each page and the word “brought forward B/F” written on the beginning of next page.

12. Rules of journalising :- Personal accounts – ‘Debit the receiver’ & ‘Credit the giver’. Real accounts – ‘Debit what comes in’ & ‘Credit what goes out’ . Nominal accounts – ‘Debit all expenses’ & ‘Credit all income’.

13. Meaning of Goods :- “Goods are those things which are purchased for resale.” Goods account is classified into five accounts for purpose of passing journal entries:- i). Purchase A/c – when goods are purchased, instead of written Goods A/c ‘purchase a/c’ debited. ii). Sales A/c – when goods are sold. iii). Purchases return A/c iv). Sales return A/c v). Stock A/c

14. Illustration

15. Q 1. From the following transactions prepare journal of Gopal Date 2016 Apr.3 Bought goods from Kanu ₹ 20,000 at a trade discount of 10% and cash discount of 5%. Paid 50% amount immediately. Apr.4 Sold goods to Y for ₹ 10,000 Apr.8 Cash deposited into bank ₹ 20,000 Apr. 20 Cash paid to Cham ₹ 6,000 Apr.25 Cash received from Y ₹ 9,500 in full settlement Apr. 28 Proprietor withdraw for private use ₹ 2,000 from office and ₹ 5,000 from bank Apr.30 Paid rent ₹ 2,000 and trade expenses ₹ 1,000 Assets on 1 st April 2016 – cash ₹ 8,000; bank ₹ 10,000; stock ₹ 50,000; building ₹ 90,000; debtors ₹ 6,000 (Pawan ₹ 4,000; Rahul ₹ 2,000) Liabilities on 1 st A pril 2016 – creditors ₹ 10,000 ( Cham ₹ 6,000; John ₹ 4,000); capital ₹ 2,00,000.

16. Sol…. Journal of Gopal Date Particulars L.F. Dr. Amount ₹ Cr. Amount ₹ 2016 Apr.1 Cash A/c Dr. Bank A/c Dr. Building A/c Dr. Stock A/c Dr. Debtors A/c Dr. Goodwill A/c To Capital A/c To Creditors A/c (assets and liabilities brought forward) 8,000 10,000 90,000 50,000 6,000 46,000 2,00,000 10,000 Apr.3 Purchases A/c Dr. To Kanu To discount received A/c To cash A/c (goods purchased and discount received) 18,000 9,000 900 8,100 C/F 2,28,000 2,28,000

17. Continue…. B/F 2,28,000 2,28,000 Apr.4 Y’s A/c Dr. To sales A/c (goods sold to Y) 10,000 10,000 Apr.8 Bank A/c Dr. To cash A/c (cash deposited into bank) 20,000 20,000 Apr.20 Cham’s A/c Dr. To cash A/c (cash paid to Cham ) 6,000 6,000 Apr.25 Cash A/c Discount A/c To Y’s A/c (cash received from Y) 9,500 500 10,000 C/F 2,74,000 2,74,000

18. Continue….. B/F 2,74,000 2,74,000 Apr.28 Drawings A/c Dr. To cash A/c To bank A/c (withdrew cash) 7,000 2,000 5,000 Apr.30 Rent A/c Dr. Trade expenses A/c Dr. To cash A/c (expenses paid) 2,000 1,000 3,000 Total 2,84,000 2,84,000

19. Q 2. P ass journal entries for the following :- Received ₹ 20,000 from Subhash, which were written off as bad-debts in the previous year. Salaries due to clerks ₹ 50,000. Out of the rent paid this year, ₹ 10,000 is related to next year. Provide 10% depreciation on furniture costing ₹ 50,000. Provide 12% interest on capital amounting to ₹ 10,00,000.

20. Sol... Journal Date Particulars L.F. Dr. Amount ₹ Cr. Amount ₹ Cash A/c Dr. To bad-debts recovered A/c (cash received from Subhash, previously written off as bad-debts) 20,000 20,000 Salaries A/c Dr. To Outstanding salaries A/c (salaries due to clerks ) 50,000 50,000 Prepaid rent A/c Dr. To Rent A/c (rent paid in advance) 10,000 10,000 Depreciation A/c Dr. To Furniture A/c (depreciation on furniture) 5,000 5,000 Interest on capital A/c Dr. To capital A/c (interest provided on capital) 1,20,000 1,20,000

21. Exercise

22. Journalise the following transactions (Or) Record the following transactions in a Journal Ibrahim a sole proprietor Commenced business with a capital of 2,00,000 . Bought Furniture for cash 20,000 . Paid Rent to the shop owner Mr. Murugan 5,000 Paid cash into bank 1,50,000 Bought Goods for cash 10,000 from Shamir Jain Sold goods for cash 12,000 to Mr. Narayan Tiwari Bought Machinery from M/s Boolani Machinery and paid by cheque 25,000 Received commission from M/s Orion Traders for giving a trade lead 500.

23. Q 2. M ake journal :- 1.Business started with cash 8,000 and plant & machinery 3,000. 2. Stock purchase for sale (cash purchase)= 3,000, credit purchase = 5,000 3 . Wages paid 120,000(including 20,000 of future year). 4 . Salary paid 200,000 but due 110,000. 5 . Sale made for cash 600,000 & on credit 800,000. 6 . Depreciation 10 percent on plant & machinery. 7 . Goods costing 20,000 destroyed by fire. 8 . Payment made to creditor of 200,000 at 10 % discount.

24. THANK YOU

25. Presented by :- Yamini Kahaliya BBA (Honors’)