Practice Sheet-3 - Debit and Credit Ledger Account selection with Journal Entry

Practice Sheet - 3 of 12 (Transactions for the month of June' 2021) 

Students/learners can get benefit and complete knowledge on this Practical Project after completion of all the 12 Practice Sheets with a proper sequence.

Let's Practice the below mentioned transactions of a Business Unit to be more confident on Decision making for Debiting and Crediting of Ledger Accounts with Journal Entries. This practice sheet is prepared in such a way that one can gain complete knowledge about the procedure of Financial Accounting from Journal Entry to Final Accounts.

TRIMURTHY TRADERS

(Prop : Mr. Surya Krishnamurthy) 

Financial Year : 2021-22(April' 2021 to March' 2022)

Assessment Year : 2022-23(April' 2022 to March' 2023)

Date :01/06/2021 (Transaction No. 35)

Amount withdrawn by Proprietor towards his personal expenses for ₹6,000/-.

Debit Ledger : Drawings A/c

  • In Traditional Approach - Drawings A/c is under type Personal Account - Receiver. 

    (Note : Drawings Account is considered as Personal Account because in Proprietorship Firm Accounting 'Drawings Account' is a sub-ledger of Capital Account).

  • In Modern Approach - Drawings A/c is under type Capital Account - decreases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for Cash withdrawal by the Proprietor towards personal expenses

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Date : 01/06/2021 (Transaction No. 36)

Amount paid towards salary for ₹10,000/- for the month of May’ 2021

Debit Ledger : Salary A/c

  • In Traditional Approach - Salary A/c is under type Nominal Account - Expense.

  • In Modern Approach - Salary A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Salary Expense

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Date : 01/06/2021 (Transaction No. 37)

₹4,000/- paid to Mr. Rakesh Das towards Rent for the month of May’ 2021.

Debit Ledger : Rent A/c

  • In Traditional Approach - Rent A/c is under type Nominal Account - Expense.

  • In Modern Approach - Rent A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Rent Expenses

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Date : 01/06/2021 (Transaction No. 38)

₹485/- paid to CESU towards electricity charges for the month of May’ 2021.

Debit Ledger : Electricity Charges A/c

  • In Traditional Approach - Electricity Charges A/c is under type Nominal Account - Expense.

  • In Modern Approach - Electricity Charges A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards electricity charges

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Date : 01/06/2021 (Transaction No. 39)

Amount paid towards purchase of incense stick for ₹141/-.

Debit Ledger : Miscellaneous Expenses A/c

  • In Traditional Approach - Miscellaneous Expenses A/c is under type Nominal Account - Expense.

  • In Modern Approach - Miscellaneous Expenses A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Miscellaneous Expenses

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Date : 01/06/2021 (Transaction No. 40)

Amount paid towards staff food expenses for ₹4,600/-.

Debit Ledger : Staff Food Expenses A/c

  • In Traditional Approach - Staff Food Expenses A/c is under type Nominal Account - Expense.

  • In Modern Approach - Staff Food Expenses A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases. 

Journal Entry

Journal Entry for payment towards staff food expenses

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Date : 01/06/2021 (Transaction No. 41)

₹230/- paid towards petrol for vehicle.

Debit Ledger : Vehicle Maintenance A/c

  • In Traditional Approach - Vehicle Maintenance A/c is under type Nominal Account - Expense.

  • In Modern Approach - Vehicle Maintenance A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Vehicle Maintenance Expenses

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Date : 02/06/2021 (Transaction No. 42)

Amount paid to Krishna Variety Store for ₹356/- towards office stationery as per CM No-810.

Debit Ledger : Printing & Stationery A/c

  • In Traditional Approach - Printing & Stationery A/c is under type Nominal Account - Expense.

  • In Modern Approach - Printing & Stationery A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Printing & Stationery Expenses

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Date : 02/06/2021 (Transaction No. 43)

₹670/- paid to BSNL towards telephone bill for the month of May’ 2021 as per MR No-1000024112

Debit Ledger : Telephone Expenses A/c

  • In Traditional Approach - Telephone Expenses A/c is under type Nominal Account - Expense.

  • In Modern Approach - Telephone Expenses A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for Payment towards Telephone Expenses

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Date : 02/06/2021 (Transaction No. 44)

Amount paid towards petrol for vehicle for ₹190/-.

Debit Ledger : Vehicle Maintenance A/c

  • In Traditional Approach - Vehicle Maintenance A/c is under type Nominal Account - Expense.

  • In Modern Approach - Vehicle Maintenance A/c is under type Expense Account - Increases.

Credit Ledger : Cash A/c

  • In Traditional Approach - Cash A/c is under Real Account - Goes Out.

  • In Modern Approach - Cash A/c is under Asset Account - decreases.

Journal Entry

Journal Entry for payment towards Vehicle Maintenance Expenses

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Date : 02/06/2021 (Transaction No. 45)

Purchased goods from Krishna Enterprises, Odisha for ₹4,03,721.88 as per Invoice No-1047.

Item/Product/Taxable Value ₹3,43,446/-, CGST ₹30,137.94- and SGST ₹30,137.94

Total Invoice Value is ₹4,03,721.88(i.e Taxable Value ₹3,43,446 + CGST ₹30,137.94 + SGST ₹30,137.94).

See the Invoice details below.

Project Practice Sheet 3 - Krishna Enterprises - Inv. No.1047

Debit Ledgers are :

  1. Purchases A/c

  2. CGST A/c

  3. SGST A/c

  • In Traditional Approach :

Purchases A/c is under type Nominal Account - Expense.

CGST A/c is under type Personal Account - Receiver.

SGST A/c is under type Personal Account - Receiver.

  • In Modern Approach :

Purchases A/c is under type Asset Account - Increase.

CGST A/c is under type Asset Account - Increase.

SGST A/c is under type Asset Account - Increase.

Credit Ledger : Krishna Enterprises A/c

  • In Traditional Approach - Krishna Enterprises A/c is under Personal Account - Giver.

  • In Modern Approach - Krishna Enterprises A/c is under Liability Account - Increases. 

Journal Entry

Journal Entry for Credit purchase of Trading Goods

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Date : 02/06/2021 (Transaction No. 46)

Amount paid to ABC Roadways vide Chq No-700104 of Axis Bank Current Account for ₹3419/-

Debit Ledger : Carriage & Freight A/c

  • In Traditional Approach - Carriage & Freight A/c is under type Nominal Account - Expense.

  • In Modern Approach - Carriage & Freight A/c is under type Expense Account - Increases.

Credit Ledger : Axis Bank Current A/c

  • In Traditional Approach - Axis Bank Current A/c is under Real Account - Goes Out.

  • In Modern Approach - Axis Bank Current A/c is under Asset Account - decreases.

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