E T B Best PGDM Institute in Delhi PGDM Course in Delhi MBA AGU Best PGDM College in Delhi NCR Best MBA Colleges in Bangalore

Journalising and posting.

In ledger should i prepare one account for purchase and purchase retuns or two accounts? Similarly one or two accounts in case of sales and sales rerurns?????

asked Jul 17, 2015 in Journal Entries by Faizan (28 points) 1,154 views

1 Answer

0 votes
Actually your question should have been that while journalising  'should I credit Purchase A/c or Purchase Return A/c on returning back of goods purchased to the seller'.  I am saying so because while doing posting you debit or credit only those accounts which have been mentioned in the journal entry.  Let us now understand it:

     Whenever goods are bought, they are debited to Purchase A/c and whenever any goods are returned to the selled 'Purchase Return A/c is credited and not Purchase A/c'.  The reason for this is that for management purposes and for easy settlement of accounts of creditors, it is better to keep two separate accounts for Purchase of goods and Return of goods.  So if you while journalising maintain separate accounts for purchases and purchase returns, obviously while posting you will post it two different accounts.

     Same applies to Sales and Sales Return A/c.
answered Jul 17, 2015 by jbsclasses (3,971 points)
Sir not in journal but in ledger

I read your question very carefully and replied, now you read my answer carefully. Read my reply 2-3 times, if you don't get my point, then we will discuss further.  You must notice I said 'your question should have been'.

I am saying so because while doing posting you debit or credit only those accounts which have been mentioned in the journal entry. So, if you have credited Purchase Return A/c or Purchase A/c in journal, then you have to credit those accounts only while posting.

Plz help me journalising assets- 20000 stockd Rs 45000 anil brother Rs 15600 Gopal Rs 22000 machinery Rs 60000
Liabilities -mohan 4000
January 3 sold goods for cash 5000 and on credit Rs 8000 to anil brothers
5th anil bro returnes giids for cash
7th purchased giods from mohan list price of Rs 6000 valued of Rs5400
8th bought goods of the list  price of Rs 20000  from raghu less 15% trade discount and 5% cash discount and paid 60% pprice immediately
15th paid to mohna Rs 8150 in full settlement of his account
20th received from anil 20000
28th paid Rs 800 for the life insurance premium of the proprietor
31st paid for rent Rs 2000
31st received for commission Rs 600
First we have to make the opening entry.  Actually this is the balance sheet items of last period.  While starting the current year's books you have to bring all the assets and liabilities in the current year's books.  Opening entry is:

1.  Stock A/c            Dr. 45000

      Anil Bros.           Dr. 15600

      Gopal                  Dr. 22000

      Machinery A/c   Dr. 60000

         To Mohan                                    4000

         To Capital A/c                         138600    (This is the balancing figure.  First total all assets and then subtract liabilities from that total)

2.  Cash A/c              Dr.   5000

      Anil Bros.A/c       Dr.   8000

        To Sales A/c                                13000

3.  Sales Return  A/cDr.   5000

        To Cash A/c                                    5000

4.  Purchase A/c       Dr.   5400

        To Mohan                                        5400

5@. Purchase A/c       Dr.  17000

       To Cash A/c                                     9690

       To Discount Recd. A/c                      510

        To Raghu                                         6800

6.  Mohan A/c          Dr.      8400

         To Discount Recd. A/c                    250

         To Cash A/c                                    8150

7.  Cash A/c             Dr.    20000

        To Anil A/c                                     20000

8.  Drawings A/c     Dr.         800

        To Cash A/c                                       800  

(Since it is personal insurance of proprietor, it is not a business expense, hence debited to drawings account)

9.  Rent A/c              Dr.       2000

       To Cash A/c                                      2000

10. Cash A/c           Dr.          600

       To Commission Received A/c         600

@  Trade Discount = 20000 x 15% 3000.  This will not enter in books.  Net cash paid will be treated as Purchases.  Cash discount is available on 60% cash payment (Rs.17000 x 60% = Rs.10200).  Discount will be Rs.10200 x 5% = R510.  Net cash payment will be (Rs.10200 - 510) = Rs9690
Plz help me journalising assets- 20000 stockd Rs 45000 anil brother Rs 15600 Gopal Rs 22000 machinery Rs 60000
Liabilities -mohan 4000
January 3 sold goods for cash 5000 and on credit Rs 8000 to anil brothers
5th anil bro returnes giids for cash
7th purchased giods from mohan list price of Rs 6000 valued of Rs5400
8th bought goods of the list  price of Rs 20000  from raghu less 15% trade discount and 5% cash discount and paid 60% pprice immediately
15th paid to mohna Rs 9150 in full settlement of his account
20th received from anil 20000
28th paid Rs 800 for the life insurance premium of the proprietor
31st paid for rent Rs 2000
31st received for commission Rs 600
Pass journal entries for the abovr transaction, post them into ledger,balance the accounts and prepare a trail balance....plz help me
I am giving below the link of my youtube video on LEDGER POSTING, BALANCING and TRIAL BALANCE.  You watch this video, you can easily learn from that video.  If you have any doubts after that, you are most welcome to clear your doubts.

...