From the following information, you are required to record the transactions in the appropriate ledgers and extract a trial balance:
Jan 2: Started business with capital $4000
Jan 4: Paid insurance by cheque $270
Jan 7: Bought goods on credit from Gabriel $200
Jan 8: Cash sales $2000
Jan 10: Paid carriage by cash $60
Jan 13: Received cheque from Bella $2010
Jan 15: Cash purchases $700
Jan 17: Bought fixtures by cheque $205
Jan 25: Cash taken for personal use
Jan 27: Sold goods on credit Louis $80; Freddy $162
Jan 30: We returned goods to Gabriel $30
Please answer correctly.
Please don't answer if you don't know it.
IT IS VERY URGENT
Answers
Answer:
Given"Purchased Goods for 60000 and paid 2000 for carriage "
This transaction affects 3 accounts... Purchases a/c (we are purchasing it) , cash a/c(We are paying) , carriage inward (carriage inward means transportation charges paid while Purchasing Goods)
Where Purchases and carriage inward are Nominal accounts (All expenses incomes gains losses come under it) and Cash is Real Accounts(all the assets and liabilities come under it)..
The Three golden rules of accounting are
Personal account - Debit the receiver, credit the giver
Real account- Debit what comes in , credit what goes out
Nominal account - Debit All expenses and losses,credit All incomes and gains..
As per the above rules , Purchases and carriage inward are expenses,they should be debited whereas cash is going out , should be credited to that extent....
The Journal Entry is
Purchases a/c Dr 60000
carriage inward a/c 2000
To Cash a/c 60000
(Being goods Purchased and carriage paid)