J I T H I N K T H O M A S

Journalising

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Recording Transactions

Journal

Journalising

Proforma

Date Particulars LF Debit Credit

Rules of Debit and Credit

1. Persons

2. Properties and assets

3. Income and expenses

Personal

1. Natural

2. Artificial

3. Representative

Debit the Receiver

Credit the giver

Real

Tangible

Intangible

Debit what comes in

Credit what goes out

Nominal

Expenses and loses

Incomes and Gains

Debit all expenses & losses

Credit all gains & income

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Accounts

Personal

Natural

Artificial

Representative

Real

Tangible

Intangible

Nominal

Expenses & Losses

Incomes & Gains

Examples

Rent Paid Salaries paid Interest received Dividends received Furniture purchased for cash Machinery sold Outstanding for salaries Telephone charges paid Paid to Suresh Received from owner Lighting

Transactions A/c involved Nature of A/c Debit/Credit

Rent paid Rent A/c Nominal A/c Debit

Cash A/c Real A/c Credit

Problems

John Starts business with a capital of Rs.200,00/-on January 1, 2012

Date Particulars LF Debit Credit

01/01/2012 Cash Account DrTo Capital Account

(Being commencement of business)

20,00020,000

Classification of goods Account

1. Purchase account

2. Sales account

3. Purchased Returns account

4. Sales return account

Compound Journal Entry

Payment to Gautham Rs.1000/- after receiving a cash discount of Rs.50/-

Cash received form Praveen after allowing a cash discount of Rs.50/-

A running business was purchased by Vijith with the following assets and liabilities:

Cash Rs.2000/-, land Rs.4000/- ,Furniture Rs.1000/-, stock Rs.2000/- Creditors Rs.1000/- bank Overdraft Rs.2000/-

Sub Divisions of Journal

Convenience

Division of labor

Classified information

Sub Divisions of Journal

Journal

General Journal

Special Journal

Cash Journal

Cash Receipts journal

Cash Payments

journal

Goods Journal

Purchases Journal

Sales Journal

Purchases Returns

Sales returns

Bills Journal

Bills Receivable

Jr

Bills Payable Jr

General Journal

Opening entries

Closing entries

Adjustment entries

Transfer entries

Rectification entries

Purchase of fixed assets

Cash journal

Importance of Cash Book

Number of transaction

Changes of fraud

Nerve center of business

Types of cash Book

1. Simple cash book

2. Two columnar Cash book

3. Three columnar cash book

4. Cash receipts book

5. Cash payments book

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Contra entry

Receipt of Cheques

Endorsement of cheques received

Dishonore of cheques

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Petty Cash book

Purchases Journal

Purchases return Journal

Sales Journal

Sales Returns Journal

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