11 Name two transactions for which Journal Proper is used.
Answers
Answer:
Uses of Journal Proper
Transfer Entries: For transfer of any amount from one account to another. Credit purchase and sale of fixed assets. Rectification Entries: Entries needed to rectify errors in the books of accounts
ANSWER :
Journal proper is maintained when journals are sub-divided into special purpose books. It records only those transactions which are not recorded in any other subsidiary books.
Two transactions for which Journal Proper is used are :-
- [1] Opening Entry : Opening entry of a business is a transaction which is recorded in the journal proper. Opening entries are those entries which are made in the beginning. These entries may be passed at the time of beginning a new business or at the beginning of every new accounting year in case of a continuing business.
Example of Opening Entries :
- ↬ The proprietor started business with cash of Rs. 100000.
- ↬ The proprietor started business with the assets of Cash Rs. 20000, Furniture Rs. 30000, Machinery Rs. 50000 and the liabilities of Bank Loan Rs. 100000.
These entries are opening entries and will be recorded in the journal proper as these entries cannot be recorded in any other special purpose books.
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- [2] Adjustment Entry : Adjustment entries at the time of preparing final accounts is another transaction which is recorded in journal proper. At the time of preparation of final accounts, some entries are required to be passed to record certain unrecorded items such as closing stock, outstanding expenses, prepaid expenses, accrued income, depreciation on fixed assets etc. This entries are known as adjustment entries.
Example of Adjustment Entries :
- ↬ Outstanding Salary of Rs. 3000 and Outstanding wages of Rs. 1500.
- ↬ Depreciation on Machinery Rs. 6000
These entries are adjustment entries and will be recorded in the journal proper as these entries cannot be recorded in any other special purpose books.