enter the following transaction in journal proper of Gyan Limited. 1) rent prepaid RS 1,000.2) coats of 5000 loss due to fire. 3) attitude interest of investment Rs 2,000
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Answer:
A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal Residual.
Following transactions are recorded in this journal:
1. Opening entry: In order to open a new set of books in the beginning of new accounting year and record therein opening balances of assets, liabilities and capital, the opening entry is made in the journal.
2. Adjustment Entries: In order to update ledger account on accrual basis, such entries are made at the end of the accounting period, such as Rent outstanding, Prepaid insurance, Depreciation and Commission received in advance.
3. Other entries: The following transactions is done in the journal proper:
(i) At the time of dishonor of a cheque the entry for cancellation for discount received or discount allowed
(ii) Purchase/sale of items on credit other than goods
(iii) Goods withdrawn by the owner for personal use
(iv) Goods distributed as samples for sales promotion
(v) Endorsement and dishonour of bills of exchange
(vi) Loss of goods by fire/theft/spoilage