NCERT Solutions for Class 11 Accountancy Financial Accounting Part-1 Chapter 3

Recording of Transactions - I Class 11

Chapter 3 Recording of Transactions - I Exercise Solutions

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Short answers : Solutions of Questions on Page Number : 79

Q1 :  

State the three fundamental steps in the accounting process.


Answer :

The fundamental steps in the accounting process are diagrammatically presented below.

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Q2 :  

Why is the evidence provided by source documents important to accounting?


Answer :

The evidence provided by the source document is important in the following manners:

  1. It provides evidence that a transaction has actually occurred.

  2. It provides important and relevant information about date, amount, parties involved and other details of a particular transaction.

  3. It acts as a proof in the court of law.

  4. It helps in verifying transactions during the auditing process.

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Q3 :  

Should a transaction be first recorded in a journal or ledger? Why?


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Q4 :  

Are debits or credits listed first in journal entries? Are debits or credits indented?


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Q5 :  

Why are some accounting systems called double accounting systems?


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Q6 :  

Give a specimen of an account.


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Q7 :  

Why are the rules of debit and credit same for both liability and capital?


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Q8 :  

What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts?


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Q9 :  

What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner.


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Q10 :  

If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit?


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Numerical questions : Solutions of Questions on Page Number : 80

Q1 :  

Prepare accounting equation on the basis of the following:

(a) Harsha started business with cash Rs 2,00,000

(b) Purchased goods from Naman for cash Rs 40,000

(c) Sold goods to Bhanu costing Rs 10,000/- Rs 12,000

(d) Bought furniture on credit Rs 7,000


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Q2 :  

Prepare accounting equation from the following:

 

 

Rs

(a)

Kunal started business with cash

2,50,000

(b)

He purchased furniture for cash

35,000

(c)

He paid commission

 2,000

(d)

He purchases goods on credit

40,000

(e)

He sold goods (costing Rs 20,000) for cash

26,000

 

 


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Q3 :  

Mohit has the following transactions, prepare accounting equation:

 

 

 

Rs

(a)

Business started with cash

1,75,000

(b)

Purchased goods from Rohit

 50,000

(c)

Sales goods on credit to Manish (Costing Rs 17,500)

20,000

(d)

Purchased furniture for office use

10,000

(e)

Cash paid to Rohit in full settlement

48,500

(f)

Cash received from Manish

20,000

(g)

Rent paid

1,000

(h)

Cash withdrew for personal use

3,000

 

 


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Q4 :  

Rohit has the following transactions:

 

 

Rs

(a)

Commenced business with cash

1,50,000

(b)

Purchased machinery on credit

 40,000

(c)

Purchased goods for cash

 20,000

(d)

Purchased car for personal use

 80,000

(e)

Paid to creditors in full settlement

38,000

(f)

Sold goods for cash costing Rs 5,000

4,500

(g)

Paid rent

 1,000

(h)

Commission received in advance

2,000

 

Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.

 

 


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Q5 :  

Use accounting equation to show the effect of the following transactions of M/s Royal Traders:

 

 

Rs

(a)

Started business with cash

1,20,000

(b)

Purchased goods for cash

 10,000

(c)

Rent received

5,000

(d)

Salary outstanding

2,000

(e)

Prepaid Insurance

1,000

(f)

Received interest

 700

(g)

Sold goods for cash (costing Rs 5,000)

 7,000

(h)

Goods destroyed by fire

 500

 

 


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Q6 :  

Show the accounting equation on the basis of the following transaction:

 

 

 

(a)

Udit started business with:

Rs

 

(i)

Cash

5,00,000

 

(ii)

Goods

1,00,000

(b)

Purchased building for cash

2,00,000

(c)

Purchased goods from Himani

 50,000

(d)

Sold goods to Ashu (Cost Rs 25,000)

 36,000

(e)

Paid insurance premium

 3,000

(f)

Rent outstanding

 5,000

(g)

Depreciation on building

 8,000

(h)

Cash withdrawn for personal use

 20,000

(i)

Rent received in advance

 5,000

(j)

Cash paid to Himani on account

 20,000

(k)

Cash received from Ashu

 30,000

 

 


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Q7 :  

Show the effect of the following transactions on Assets, Liabilities and Capital through accounting equation:

 

 

Rs

(a)

Started business with cash

1,20,000

(b)

Rent received

10,000

(c)

Invested in shares

50,000

(d)

Received dividend

5,000

(e)

Purchase goods on credit from Ragani

35,000

(f)

Paid cash for house hold Expenses

7,000

(g)

Sold goods for cash (costing Rs 10,000)

14,000

(h)

(i)

Cash paid to Ragani

Deposited into bank

35,000

20,000

 

 


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Q8 :  

Show the effect of following transaction on the accounting equation:

 

 

Rs

(a)

Manoj started business with

 

 

(i) Cash

2,30,000

 

(ii) Goods

1,00,000

 

(iii) Building

2,00,000

(b)

He purchased goods for cash

50,000

(c)

He sold goods(costing Rs 20,000)

35,000

(d)

He purchased goods from Rahul

55,000

(e)

He sold goods to Varun (Costing Rs 52,000)

60,000

(f)

He paid cash to Rahul in full settlement

53,000

(g)

Salary paid by him

20,000

(h)

Received cash from Varun in full settlement

59,000

(i)

Rent outstanding

3,000

(j)

Prepaid Insurance

2,000

(k)

Commission received by him

13,000

(l)

Amount withdrawn by him for personal use

20,000

(m)

Depreciation charge on building

10,000

(n)

Fresh capital invested

50,000

(o)

Purchased goods from Rakhi

6,000

 

 


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Q9 :  

Transactions of M/s. Vipin Traders are given below.

Show the effects on Assets, Liabilities and Capital with the help of accounting Equation.

 

 

Rs

(a)

Business started with cash

1,25,000

(b)

Purchased goods for cash

50,000

(c)

Purchase furniture from R.K. Furniture

10,000

(d)

Sold goods to Parul Traders (costing Rs 7,000 vide bill no. 5674)

9,000

(e)

Paid cartage

100

(f)

Cash Paid to R.K. furniture in full settlement

9,700

(g)

Cash sales (costing Rs 10,000)

12,000

(h)

Rent received

4,000

(i)

Cash withdrew for personal use

3,000

 

 


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Q10 :  

Bobby opened a consulting firm and completed these transactions during November, 2005:

(a)

Invested Rs 4,00,000 cash and office equipment with Rs 1,50,000 in a business called Bobbie Consulting.

(b)

Purchased land and a small office building. The land was worth Rs 1,50,000 and the building worth Rs 3,50,000. The purchase price was paid with Rs 2,00,000 cash and a long term note payable for Rs 8,00,000.

(c)

Purchased office supplies on credit for Rs 12,000.

(d)

Bobbie transferred title of motor car to the business. The motor car was worth Rs 90,000.

(e)

Purchased for Rs 30,000 additional office equipment on credit.

(f)

Paid Rs 75,00 salary to the office manager.

(g)

Provided services to a client and collected Rs 30,000

(h)

Paid Rs 4,000 for the month's utilities.

(i)

Paid supplier created in transaction (c).

(j)

Purchase new office equipment by paying Rs 93,000 cash and trading in old equipment with a recorded cost of Rs 7,000.

(k)

Completed services of a client for Rs 26,000. This amount is to be paid within 30 days.

(l)

Received Rs 19,000 payment from the client created in transaction (k).

(m)

Bobby withdrew Rs 20,000 from the business.

Analyse the above stated transactions and open the following T-accounts:

Cash, client, office supplies, motor car, building, land, long term payables, capital, withdrawals, salary, expense and utilities expense.

 

 


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Q11 :  

Journalise the following transactions in the books of Himanshu:

2005

 

Rs

Dec.01

Business started with cash

75,000

Dec.07

Purchased goods for cash

10,000

Dec.09

Sold goods to Swati

5,000

Dec.12

Purchased furniture

3,000

Dec.18

Cash received from Swati in full settlement

 4,000

Dec.25

Paid rent

1,000

Dec.30

Paid salary

1,500

 

 


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Q12 :  

Enter the following Transactions in the Journal of Mudit :

2006

 

Rs

Jan.01

Commenced business with cash

1,75,000

Jan.01

Building

1,00,000

Jan.02

Goods purchased for cash

75,000

Jan.03

Sold goods to Ramesh

30,000

Jan.04

Paid wages

500

Jan.06

Sold goods for cash

10,000

Jan.10

Paid for trade expenses

700

Jan.12

Cash received from Ramesh

29,500

 

Discount allowed

500

Jan.14

Goods purchased for Sudhir

27,000

Jan.18

Cartage paid

1,000

Jan.20

Drew cash for personal use

5,000

Jan.22

Goods use for house hold

2,000

Jan.25

Cash paid to Sudhir

26,700

 

Discount allowed

300

 

 


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Q13 :  

Journalise the following transactions:

2005

 

Rs

Dec. 01

Hema started business with cash

1,00,000

Dec. 02

Open a bank account with SBI

30,000

Dec. 04

Purchased goods from Ashu

20,000

Dec.06

Sold goods to Rahul for cash

15,000

Dec.10

Bought goods from Tara for cash

40,000

Dec.13

Sold goods to Suman

20,000

Dec.16

Received cheque from Suman

19,500

 

Discount allowed

500

Dec.20

Cheque given to Ashu on account

10,000

Dec.22

Rent paid by cheque

2,000

Dec.23

Deposited into bank

16,000

Dec.25

Machine purchased from Parigya

10,000

Dec.26

Trade expenses

2,000

Dec.28

Cheque issued to Parigya

10,000

Dec.29

Paid telephone expenses by cheque

 1,200

Dec.31

Paid salary

4,500

 

 


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Q14 :  

Jouranlise the following transactions in the books of Harpreet Bros.:

(a)

Rs 1,000 due from Rohit are now bad debts.

(b)

Goods worth Rs 2,000 were used by the proprietor.

(c)

Charge depreciation @ 10% p.a for two month on machine costing Rs 30,000.

(d)

Provide interest on capital of Rs 1,50,000 at 6% p.a. for 9 months.

(e)

Rahul become insolvent, who owed is Rs 2,000 a final dividend of 60 paise in a rupee is received from his estate.

 


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Q15 :  

Prepare Journal from the transactions given below :

 

 

Rs

(a)

Cash paid for installation of machine

500

(b)

Goods given as charity

2,000

(c)

Interest charge on capital @ 7% p.a. when total capital were

70,000

(d)

Received Rs 1,200 of a bad debts written-off last year.

 

(e)

Goods destroyed by fire

2,000

(f)

Rent outstanding

1,000

(g)

Interest on drawings

900

(h)

Sudhir Kumar who owed me Rs 3,000 has failed to pay the amount. He pays me a compensation of 45 paise in a rupee.

 

(i)

Commission received in advance

7,000

 

 


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Q16 :  

Journalise the following transactions, post to the ledger:

2005

 

Rs

Nov. 01

Business started with

(i) Cash

1,50,000

 

 

(ii) Goods

50,000

Nov. 03

Purchased goods from Harish

30,000

Nov. 05

Sold goods for cash

12,000

Nov. 08

Purchase furniture for cash

5,000

Nov. 10

Cash paid to Harish on account

15,000

Nov. 13

Paid sundry expenses

200

Nov. 15

Cash sales

15,000

Nov. 18

Deposited into bank

5,000

Nov. 20

Drew cash for personal use

1,000

Nov. 22

Cash paid to Harish in full settlement of account

14,700

Nov. 25

Good sold to Nitesh

7,000

Nov. 26

Cartage paid

200

Nov. 27

Rent paid

1,500

Nov. 29

Received cash from Nitesh

6,800

 

Discount allowed

200

Nov. 30

Salary paid 3,000

 

 

 


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Q17 :  

Journalise the following transactions is the journal of M/s. Goel Brothers and post them to the ledger.

2006

 

Rs

Jan. 01

Started business with cash

1,65,000

Jan. 02

Opened bank account in PNB

80,000

Jan. 04

Goods purchased from Tara

22,000

Jan.05

Goods purchased for cash

30,000

Jan.08

Goods sold to Naman

12,000

Jan.10

Cash paid to Tara

22,000

Jan.15

Cash received from Naman

11,700

 

Discount allowed

300

Jan. 16

Paid wages

200

Jan. 18

Furniture purchased for office use

5,000

Jan. 20

Withdrawn from bank for personal use

4,000

Jan. 22

Issued cheque for rent

3,000

Jan. 23

Goods issued for house hold purpose

2,000

Jan. 24

Drawn cash from bank for office use

6,000

Jan. 26

Commission received

1,000

Jan. 27

Bank charges

200

Jan. 28

Cheque given for insurance premium

3,000

Jan. 29

Paid salary

7,000

Jan. 30

Cash sales

10,000

 

 


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Q18 :  

Give journal entries of M/s. Mohit traders; post them to the Ledger from the following transactions:

 

August, 2005

 

Rs

1

Commenced business with cash

1,10,000

2

Opened bank account with H.D.F.C.

50,000

3

Purchased furniture

20,000

7

Bought goods for cash from M/s. Rupa Traders

30,000

8

Purchased good from M/s. Hema Traders

42,000

10

Sold goods for cash

30,000

14

Sold goods on credit to M/s. Gupta Traders

12,000

16

Rent paid

4,000

18

Paid trade expenses

1,000

20

Received cash from Gupta Traders

12,000

22

Goods return to Hema Traders

2,000

23

Cash paid to Hema Traders

40,000

25

Bought postage stamps

100

30

Paid salary to Rishabh

4,000

 

 


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Q19 :  

Journalise the following transaction in the Books of the M/s. Bhanu Traders and Post them into the Ledger.

 

December, 2005

 

Rs

1

Started business with cash

92,000

2

Deposited into bank

60,000

4

Bought goods on credit from Himani

40,000

6

Purchased goods from cash

20,000

8

Returned goods to Himani

4,000

10

Sold goods for cash

20,000

14

Cheque given to Himani

36,000

17

Goods sold to M/s. Goyal TradeRs

3,50,000

19

Drew cash from bank for personal use

2,000

21

Goyal traders returned goods

3,500

22

Cash deposited into bank

20,000

26

Cheque received from Goyal Traders

31,500

28

Goods given as charity

2,000

29

Rent paid

3,000

30

Salary paid

7,000

31

Office machine purchased for cash

3,000

 

 


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Q20 :  

Journalise the following transaction in the Book of M/s. Beauti tradeRs Also post them in the ledger.

 

Dec. 2005

 

Rs

1

Started business with cash

2,00,000

2

Bought office furniture

30,000

3

Paid into bank to open an current account

1,00,000

5

Purchased a computer and paid by cheque

2,50,000

6

Bought goods on credit from Ritika

60,000

8

Cash sales

30,000

9

Sold goods to Karishna on credit

25,000

12

Cash paid to Mansi on account

30,000

14

Goods returned to Ritika

2,000

15

Stationery purchased for cash

3,000

16

Paid wages

1,000

18

Goods returned by Karishna

2,000

20

Cheque given to Ritika

28,000

22

Cash received from Karishna on account

15,000

24

Insurance premium paid by cheque

4,000

26

Cheque received from Karishna

8,000

28

Rent paid by cheque

3,000

29

Purchased goods on credit from Meena Traders

20,000

30

Cash sales

14,000

 

 


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Q21 :  

Journalise the following transaction in the books of Sanjana and post them into the ledger:

 

January, 2006

 

Rs

1

Cash in hand

6,000

 

Cash at bank

55,000

 

Stock of goods

40,000

 

Due to Rohan

6,000

 

Due from Tarun

10,000

3

Sold goods to Karuna

15,000

4

Cash sales

10,000

6

Goods sold to Heena

 5,000

8

Purchased goods from Rupali

30,000

10

Goods returned from Karuna

2,000

14

Cash received from Karuna

13,000

15

Cheque given to Rohan

6,000

16

Cash received from Heena

3,000

20

Cheque received from Tarun

10,000

22

Cheque received from to Heena

2,000

25

Cash given to Rupali

18,000

26

Paid cartage

1,000

27

Paid salary

8,000

28

Cash sale

7,000

29

Cheque given to Rupali

12,000

30

Sanjana took goods for Personal use

4,000

31

Paid General expense

500

 

 


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Long answers : Solutions of Questions on Page Number : 80

Q1 :  

Describe the events recorded in accounting systems and the importance of source documents in those systems?


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Q2 :  

Describe how debits and credits are used to analyse transactions.


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Q3 :  

Describe how accounts are used to record information about the effects of transactions?


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Q4 :  

What is a journal? Give a specimen of journal showing at least five entries.


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Q5 :  

Differentiate between source documents and vouchers.


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Q6 :  

Accounting equation remains intact under all circumstances. Justify the statement with the help of an example.


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Q7 :  

Explain the double entry mechanism with an illustrative example.


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<< Previous Chapter 2 : Theory Base of Accounting Next Chapter 4 : Recording of Transactions - II >>

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