Question

To which account, the following transactions will be debited and credited in the books of Dhaval?
i. Dhaval commenced business with introduction of capital of ` 50,000.
ii. Purchase furniture of ` 5,000.
iii. Bank account opened by depositing `3,000.
iv. Purchase goods of ` 10,000.
v. Goods of ` 5,000 sold to Nila for ` 8,000.
vi. Goods returned by Nila of ` 500
vii. ` 1,000 paid for insurance premium by cheque.​

Answer 1

The accounts following transactions will be debited and credited in the books of Dhaval as:

i. Dhaval commenced business with introduction of capital of ` 50,000.

• The journal for this is

Cash a/c Dr. 50,000

To Capital a/c 50,000

( Being the business started)

Here, the Cash a/c will be debited while the capital a/c will be credited.

ii. Purchase furniture of ` 5,000

Furniture a/c Dr. 5,000

To Cash a/c. 5,000

( Being furniture purchased)

Here, the Furniture a/c will be debited while the cash a/c will be credited.

iii. Bank account opened by depositing `3,000.

Bank a/c Dr. 3,000

To Cash a/c. 3,000

( Being bank a/c opened)

Here, the Bank a/c will be debited while the cash a/c will be credited.

iv. Purchase goods of ` 10,000.

Purchases a/c Dr. 10,000

To Cash a/c. 10,000

( Being goods purchased)

Here, the Purchases a/c will be debited while the cash a/c will be credited.

v. Goods of ` 5,000 sold to Nila for ` 8,000.

Nila a/c Dr. 8000

To Sales a/c. 8,000

( Being goods sold to Nila)

Here, the Nila a/c will be debited while the Sales a/c will be credited.

vi. Goods returned by Nila of ` 500

Sales Return a/c Dr. 500

To Nila a/c. 500

( Being goods returned by Nila)

Here, the Sales Return a/c will be debited while Nila a/c will be credited.

vii. ` 1,000 paid for insurance premium by cheque.

Insurance Premium a/c Dr. 10,000

To Bank a/c. 10,000

( Being insurance premium paid through cheque)

Here, the Insurance Premium a/c will be debited while the Bank a/c will be credited.