1. Analyse the following transactions according to the Traditional Approach (i) Mahesh started his business with cash. (ii) Purchased Furniture. (iii) Purchased goods for cash. (iv) Purchased goods from Ram on credit. (v) Sold goods for cash, (vi) Sold goods to Satyam on credit. (vii) Deposited into Bank. (viii) Paid rent by cheque. (ix) Paid interest on loan. (x) Interest allowed on Bank deposit.
Answers
ANSWER :
❒ The given transactions are analysed according to Traditional Approach as under :-
(i)
- ✠ Transaction :-
★ Mahesh started business with cash.
- ✠ Affected Accounts :-
(1) Cash A/C
(2) Capital A/C
- ✠ Kinds of Accounts :-
(1) Cash A/C ➺ Real Account
(2) Capital A/C ➺ Personal Account
- ✠ Accounts Debited and Credited :-
(1) Cash A/C ➺ Debited
(2) Capital A/C ➺ Credited
___________________________________________________________
(ii)
- ✠ Transactions :-
★ Purchased Furniture.
- ✠ Affected Accounts :-
(1) Furniture A/C
(2) Cash A/C
- ✠ Kinds of Accounts :-
(1) Furniture A/C ➺ Real Account
(2) Cash A/C ➺ Real Account
- ✠ Accounts Debited and Credited :-
(1) Furniture A/C ➺ Debited
(2) Cash A/C ➺ Credited
___________________________________________________________
(iii)
- ✠ Transaction :-
★ Purchased goods for cash.
- ✠ Affected Accounts :-
(1) Purchase A/C
(2) Cash A/C
- ✠ Kinds of Accounts :-
(1) Purchase A/C ➺ Nominal Account
(2) Cash A/C ➺ Real Account
- ✠ Accounts Debited and Credited :-
(1) Purchase A/C ➺ Debited
(2) Cash A/C ➺ Credited
___________________________________________________________
(iv)
- ✠ Transaction :-
★ Purchased goods from Ram on credit.
- ✠ Affected Accounts :-
(1) Purchase A/C
(2) Ram A/C
- ✠ Kinds of Accounts :-
(1) Purchase A/C ➺ Nominal Account
(2) Ram A/C ➺ Personal Account
- ✠ Accounts Debited and Credited :-
(1) Purchase A/C ➺ Debited
(2) Ram A/C ➺ Credited
___________________________________________________________
(v)
- ✠ Transaction :-
★ Sold goods for cash.
- ✠ Affected Accounts :-
(1) Cash A/C
(2) Sales A/C
- ✠ Kinds of Accounts :-
(1) Cash A/C ➺ Real Account
(2) Sales A/C ➺ Nominal Account
- ✠ Accounts Debited and Credited :-
(1) Cash A/C ➺ Debited
(2) Sales A/C ➺ Credited
___________________________________________________________
(vi)
- ✠ Transaction :-
★ Sold goods to Satyam on credit.
- ✠ Affected Accounts :-
(1) Satyam A/C
(2) Sales A/C
- ✠ Kinds of Accounts :-
(1) Satyam A/C ➺ Personal Account
(2) Sales A/C ➺ Nominal Account
- ✠ Accounts Debited and Credited :-
(1) Satyam A/C ➺ Debited
(2) Sales A/C ➺ Credited
___________________________________________________________
(vii)
- ✠ Transaction :-
★ Deposited into Bank.
- ✠ Affected Accounts :-
(1) Bank A/C
(2) Cash A/C
- ✠ Kinds of Accounts :-
(1) Bank A/C ➺ Personal Account
(2) Cash A/C ➺ Real Account
- ✠ Accounts Debited and Credited :-
(1) Bank A/C ➺ Debited
(2) Cash A/C ➺ Credited
___________________________________________________________
(viii)
- ✠ Transaction :-
★ Paid rent by cheque.
- ✠ Affected Accounts :-
(1) Rent A/C
(2) Bank A/C
- ✠ Kinds of Accounts :-
(1) Rent A/C ➺ Nominal Account
(2) Bank A/C ➺ Personal Account
- ✠ Accounts Debited and Credited :-
(1) Rent A/C ➺ Debited
(2) Bank A/C ➺ Credited
___________________________________________________________
(ix)
- ✠ Transaction :-
★ Paid interest on loan.
- ✠ Affected Accounts :-
(1) Interest on Loan A/C
(2) Cash A/C
- ✠ Kinds of Accounts :-
(1) Interest on Loan A/C ➺ Nominal Account
(2) Cash A/C ➺ Real Account
- ✠ Accounts Debited and Credited :-
(1) Interest on Loan A/C ➺ Debited
(2) Cash A/C ➺ Credited
___________________________________________________________
(x)
- ✠ Transaction :-
★ Interest allowed on Bank deposit.
- ✠ Affected Accounts :-
(1) Bank A/C
(2) Interest A/C
- ✠ Kinds of Accounts :-
(1) Bank A/C ➺ Personal Account
(2) Interest A/C ➺ Nominal Account
- ✠ Accounts Debited and Credited :-
(1) Bank A/C ➺ Debited
(2) Interest A/C ➺ Credited