Question

what will be journal entry for 1.sold goods worth 8000/- to Ms. Aaron and received 50% cash immediately off 5% C.D. 2.Paid office rent 1500/- & house rent 1800/- from business fund . 3. Purchased pens,pencils,ink,etc. for office use 1000/-

Answer 1

Given" what will be journal entry for 1.sold goods worth 8000/- to Ms. Aaron and received 50% cash immediately off 5% C.D. 2.Paid office rent 1500/- & house rent 1800/- from business fund . 3. Purchased pens,pencils,ink,etc. for office use 1000/-"

There are Three transactions in the question...

1)
This transaction affects four accounts.. sales account (Goods are sold) , Aaron account (sold to aaron) , Cash account (50% of the amount is paid in cash), cash Discount allowing (Discount being allowed)

2) This transaction affects three accounts... Office Rent account (office Rent paid out of business fund).. Drawings a/c (house rent is paid using business fund..This amounts to Personal use).. Cash account (mode of payment is cash)

3) This transaction affects two accounts.... Stationery account (pens pencils etc..are bought)... cash account (bought on cash)

Actual Price= 8000

out of 8000.. 50%is paid out in cash and rest on credit... 8000 × 50% = 4000

cash Discount= 5%

Cash Discount amount= 4000 × 5% = 200

Actual cash receivable = 4000

But since cash Discount is allowed d.. actual cash will be 4000-200 =3800

The Three golden rules of accounting are

Personal account - Debit the receiver credit the giver

Nominal account - Debit All expenses and losses credit All incomes and gains

Real Account - Debit what comes in ,credit what goes out

segregating accounts: -

Real accounts..all assets and Liabilities come under it

Nominal accounts...all incomes gains losses expenses come under it

Personal account..as the Name suggests..

So in contention with the above rules..The Journal entries will be....

1)

Cash is an asset and its coming in .it should be debited.

cash Discount allowed is a loss..it should be debited ..

sales is an income it should be credited.

Aaron is the receiver..he should be debited.


Aaron a/c Dr 4000

Cash a/c Dr 3800

Discount recieved Dr a/c 200

To Sales a/c 8000

(Being Goods Sold on credit to aaron)



2)Office Rent and Drawings are expenses to the business so it should be debited...Cash is Going out..so it should be credited..


Office Rent a/c Dr 1500

Drawings a/c Dr 1800

To cash a/c. 3300

(Being office Rent and house rent paid from office)



3) Stationery expenses are expenses to the business so it should be debited...Cash is Going out..so it should be credited..

Stationery expenses a/c Dr 1000

To cash. 1000

(Being Stationery bought)