Journal Entries.

Sir journal entries for following transactions:
a) collection from cash sales
b) borrowed from bank

asked Jul 6, 2015 in Journal Entries by Faizan (28 points) 5,695 views

1 Answer

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Journal entries with reasons as per Rules of Debit and Credit based on Accounting Equation (Assets = Liabilities + Capital)

Collection from Cash Sales:

Cash A/c            Dr.    (When assets increase they are debited.  Cash being an asset is increasing, hence debited).

  To Sales A/c             (All Incomes and Revenues are credited.  Sales is a revenue account, hence credited).

Borrowed from Bank:

Bank A/c           Dr.     (With borrowings Bank A/c increases.  Bank A/c is an asset so when asset increases, it is debited).

  To Bank Loan A/c   (Rule for liabilities is Credit when liabilities increase.   Bank Loan being a liability is increasing, hence credited).
answered Jul 6, 2015 by jbsclasses (3,971 points)
Identify the following accounts..
a prepaid salary a/c
b wages outstanding
c unexpired insurance a/c
d bad debts
e depreciation
f drawings
The following accounts are classified as Assets, Liabilities, Expenses/losses, Revenue and Capital Accounts.

a. Prepaid Salary A/c - Asset because salary has been paid in advance.

b. Wages Outstanding A/c - Liability because having utilised the services of employees, wages have not been paid.

c. Unexpired Insurance A/c - Asset because till the Inssurance contract expires, we are insured.

d. Bad Debts A/c - Loss because this account represents money not paid by debtors, hence a loss.

e. Depreciation A/c - Expenses because this represents  cost incurred on account of usage etc. of fixed assets.

f. Drawings A/c - Capital Account because this represents money or goods withdrawn by proprietor from the business.
Sir in the above question i want to know which is a personal, ,real and nominal account??
1. Prepaid Salary A/c : This is a  Representative Personal Account.  This means this account represents salary paid in advance to some of the employees.  So, this account represent all those employees whom salary has been paid in advance.

2. Wages Outstanding A/c: This is also a Representative Personal Account.  This account collectively represents those employees who have rendered service but who have not been paid as yet.

3. Unexpired Insurance A/c: It is a Real Account.  Because this is the amount paid by us against which we still have to receive service.

4. Bad Debts A/c: It is a Nominal Account (expense).

5. Depreciation A/c: It is a Nominal Account (expense).

6. Drawings A/c: It is a Peersonal A/c.  This account represents money or goods withdrawn by proprietor from the business.
Journal entry :rent due landlord
Journal entry for rent due to Landlord is given below.  We have to analyse two aspects of this transactions.  First aspect is that we have to record rent which is an expense, hence Rent A/c will be debited.  Second aspect is that rent is still unpaid and it is due to landlord.  Outstanding Rent is a liability hence will be credited.  

Rent A/c     Dr.

  To Rent Outstanding A/c
Journal entry:
a) withdrew goods for private use
b)paid salary to Mr sevakram an employee
c)paid rent to Mr estate,landlord
Journal entries:

a) Withdrew goods for private use:

Drawings A/c    Dr. (Since proprietor has withdrawn goods for his personal use, it will be debited to Drawings A/c

  To Purchase A/c  (Due to withdrawal of goods by proprietor for personal use, goods available to business for sale have reduced, hence we need to reduce the amount of purchases in the books.)

b) Paid salary to Mr. Sevakram, an employee.

Salary A/c   Dr.

 To Cash A/c ( (salary is paid after the employee his given his services, hence it is an expense and will be debited to salary a/c and not to the personal account of the employee.).

c) Paid rent to Mr. Estate, Landlord.

Rent A/c   Dr.

  To Cash A/c    (Rent is being paid for using the premises of Mr. Estate, hence it is an expense and will be debited to Rent a/c and not to the personal account of the landlord).