Journal Entries

Question 1

Cash contribution from owner

Answer 1

Dr. Cash in Hand

Cr. Capital

Question 2

Borrow money from bank

Answer 2

Dr. Cash at Bank

Cr. Long-term borrowing

Question 3

Cash Purchase of goods

Answer 3

Dr. Inventory

Cr. Cash in hand/ Cash at bank

Question 4

Credit Purchase of goods

Answer 4

Dr. Inventory

Cr. Trade payable

Question 5

Purchase return of goods bought on credit previously

Answer 5

Dr. Trade payable ( liability decrease)

Cr. Inventory ( asset decrease )

Question 6

Purchase return of goods bought by cash/cheque previously

Answer 6

Dr. Cash in hand/Cash at bank (asset increase)

Cr. Inventory ( asset decrease)

Question 7

Payment to trade payable

Answer 7

Dr. Trade payable

Cr. Cash in hand

Question 8

Cash Sale of goods

Answer 8

Dr. Cash in hand / Cash at bank
Cr. Sales Revenue
( to record income at selling price)

Dr. Cost in Sales ( expense )
Cr . Inventory
( to recognise the cost of the sales at cost price)

Question 9

Sales returns of goods sold on credit previously

Answer 9

Dr. Sales Returns ( contra-income )
Cr. Trade receivables ( asset decrease )
( at selling price )

        Dr.   Inventory ( asset increase )
           Cr.   Cost of Sales  ( expense decrease )
                  ( at cost price )

Question 10

Sales return of goods sold by cash/cheque previously

Answer 10

Dr. Sales Returns ( contra-income )
Cr. Cash in hand/Cash at bank (asset
decrease)
( at selling price )

        Dr.    Inventory ( asset increase )
           Cr.   Cost of Sales  ( expense decrease )
                ( at cost price )

Question 11

Collection on Trade Receivables

Answer 11

Dr. Cash in hand

Cr. Trade Receivable

Question 12

Cash drawings by owner ( for personal use)

Answer 12

Dr. Drawings

Cr. Cash in hand / Cash at bank

Question 13

Withdrawal of Stocks/ Inventory by owner

Answer 13

Dr. Drawings

Cr. Inventory

Question 14

Withdrawal of Inventory to be used as samples for customers

Answer 14

Dr. Advertising Expense

Cr. Inventory

Question 15

Cash Purchase of non- current assets

eg. Motor vehicles

Answer 15

Dr. Motor Vehicles

Cr. Cash in hand

Question 16

Credit Purchase of non-current assets

eg. Motor vehicles

Answer 16

Dr. Motor Vehicles

Cr. Other Payable - XXX Co.

Question 17

Credit Purchase of non-current assets

eg. Motor vehicles

Answer 17

Dr. Motor Vehicles

Cr. Other Payable - XXX Co.

Question 18

Payment for expenses eg. Rent

Answer 18

Dr. Rent Expense

Cr. Cash in hand

Question 19

Received income eg. Commission income

Answer 19

Dr. Cash in hand

Cr. Commission Income

Question 20

Repayment of borrowing of loan by cash

Answer 20

Dr. Long Term Borrowing

Cr. Cash in hand

Question 21

Creating allowance for impairment of Trade Receivables

Answer 21

Dr. Impairment loss on TR

Cr. Allowance for impairment of TR

Question 22

Depreciation of NCA

Answer 22

Dr. Depreciation

Cr. Accumulated Depreciation