Question

Make journal entry from the following transaction
of Rahul furniture house
1. Started Business with Rs. 40000.
2. Furniture purchased Rs. 8000. at the @2.25%
trade discount.
3. Goods sold Rs900.
4. Salary paid by cheque.
​

Answer 1

Answer:

In the books of Rahul furniture house

Journal entries

1. Cash a/c Dr. 40000

To Capital a/c. 40000

(Being business commenced with Rs. 40000)

2. Furniture a/c Dr. 7820

To Cash a/c 7820

(Being furniture purchased worth of Rs. 8000 @ 2.25 trade discount)

3. Cash a/c Dr. 900

To Sales a/c. 900

(Being goods sold worth of Rs. 900)

4. Salary a/c Dr. --

To Bank a/c --

(Being salary paid by cheque)

Explanation:

As per the modern rules of journalism entries are made, & rules are as given below.

1. in case of personal accounts

Dr. the receiver and

Cr. the giver

2. in case of real accounts

Dr. what comes in and

Cr. what goes out

3. in case of nominal accounts

Dr. all expenses & losses

Cr. all Incomes & gains

Note:- trade discount wouldn't show in the books of accounts, it is directly calculated, deducted from the related item & will not record it.