subodh public school, rambagh crossing chapter 10 ... · accounting for goods and service tax (gst)...

SUBODH PUBLIC SCHOOL, RAMBAGH CROSSING

Chapter 10:-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)

LEARNING OUTCOMES After studying this chapter, you should be able to understand:-

* Meaning of GST

*Taxes merged into GST

*GST rate structure

*Objectives or Advantages of GST

*Type of Taxes under GST(Tax structure under GST)

*Accounting Procedure

REFERENCES -1.N.C.E.R.T

2.Extramarks


Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)

MAY 18,2020

Go through content given in Chapter one Meaning and Objective of Accounting from

extramarks learning app if content is not available then please refer to the following for

detailed understanding.

SUBODH PUBLIC SCHOOL, RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)

GST Meaning – GST is Goods and Service Tax is an indirect tax which the Government of India is

planning to levy on all goods and services apart from those exempted by the GST law. The sole purpose

of GST is to put an end to multiple taxes like excise, CST, VAT, service tax which are levied on different

products, starting from the source of manufacturing, till reaching the end consumer.

It is a nation –wide tax seeking to unify several indirect taxes and is based on the principle of

“One Nation one Tax”.

GST Act was passed in the Parliament on 24 th March ,2017 and it came into effect from 1 st

July,2017.

Taxes merged into GST—

GST has replaced many indirect taxes levied by Central and state Governments.

The following erstwhile state and central taxes have been subsumed in GST.

Central Taxes:

Central Excise Duty

Service Tax

Duties of Excise (Medicinal and Toilet Preparations)

Additional Duties of Excise (Goods of Special Importance)

Additional Duties of Excise (Textiles and Textile Products)

Additional Duties of Customs (commonly known as CVD)

Special Additional Duty of Customs (SAD)

Central Surcharges and Cesses so far as they relate to supply of goods and services

State Taxes :

State VAT :

Central Sales Tax

Luxury Tax

Entry Tax (all forms)

Entertainment and Amusement Tax (except when levied by the local bodies)

Taxes on advertisements

Purchase (Entry) Tax

Taxes on lotteries, betting and gambling

State Surcharges and Cesses so far as they relate to supply of goods and services

Central, State and Local levies were subsumed under GST based on fact that

1. It should be primarily in the nature of indirect taxes, either on the supply of goods/services.


Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) 2. It should be part of the transaction chain which commences with import/manufacture/production of

goods and/or provision of services at one end and the consumption of goods and services at the other.

3. The subsumation should result in free flow of tax credit in intra and inter-State levels. The taxes,

levies and fees that are not specifically related to supply of goods & services should not be subsumed

under GST.

4. Revenue fairness for both the Union and the States individually would need to be attempted.

GST Rate Structure--

Goods and Services are divided into five slabs for collection of GST:--

Essential Items including food 0 %

Common Use Items 5 %

Standard Rate 12 %

Maximum Goods and all services Standard Rate 18%

Luxury Items and tobacco 28%

GST is paid on purchase of goods and services and it is collected from customers on sale of goods and

services .GST Paid (termed as Input GST)is set off against GST Collected(termed as Output GST)

As such, GST Paid on Purchase (Input GST) is not a Cost for the purchaser but is an Asset

since it can be set off against GST Collected on Sales (i.e., Output GST).Similarly ,GST Collected on Sales

(Output GST)is not an income of the seller but is a liability.

Characteristics of Goods and Service Tax(GST)---

1.GST is a Comprehensive Indirect Tax.

2.Uniform GST Rates

3.GST paid is not a Cost.

4.GST is a Value Added Tax.

Objectives or Advantages of GST ---

a. No cascading of taxes

b. Reduced compliance cost

c. Seamless flow of credit

d. Less wastage of time and effort to comply

e. Few number of taxes

f. Transparent and corruption free

g. Supportive to compete at Domestic and International Market

h. Buoyancy in tax collection both for Central and State/UT

i. Tax impact on inflation should be minimaL

SUBODH PUBLIC SCHOOL, RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)

MAY 19,2020 Go through content given in Chapter one Meaning and Objective of Accounting from

extramarks learning app if content is not available then please refer to the following for

detailed understanding.

SUBODH PUBLIC SCHOOL, RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) TYPES OF TAXES UNDER GST--

As per the newly implemented tax system, there are 4 different types of GST:

1.Integrated Goods and Services Tax (IGST)

2.State Goods and Services Tax (SGST)

3.Central Goods and Services Tax (CGST)

4.Union Territory Goods and Services Tax (UTGST)

Additionally, the government has fixed different taxation rates under each, which will be

applicable to the payment of tax for goods and/or services rendered.

1. Integrated Goods and Services Tax or IGST

The Integrated Goods and Services Tax or IGST is a tax under the GST regime that is applied on the

interstate (between 2 states) supply of goods and/or services as well as on imports and exports.

The IGST is governed by the IGST Act. Under IGST, the body responsible for collecting the taxes is

the Central Government. After the collection of taxes, it is further divided among the respective

states by the Central Government. For instance, if a trader from West Bengal has sold goods to a

customer in Karnataka worth Rs.5,000, then IGST will be applicable as the transaction is an

interstate transaction. If the rate of GST charged on the goods is 18%, the trader will charge

Rs.5,900 for the goods. The IGST collected is Rs.900, which will be going to the Central Government.

2. State Goods and Services Tax or SGST

The State Goods and Services Tax or SGST is a tax under the GST regime which is applicable on

intrastate (within the same state) transactions. In case of intrastate supply of goods and/or

services, both State GST and Central GST are levied. However, the State GST or SGST is levied by the

state on the goods and/or services that are purchased or sold within the state. It is governed by the

SGST Act. The revenue earned through SGST is solely claimed by the respective state government.

For instance, if a trader from West Bengal has sold goods to a customer in West Bengal worth

Rs.5,000, then the GST applicable on the transaction will be partly CGST and partly SGST. If the rate

of GST charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST. The total

amount to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned from

GST under the head of SGST, i.e. Rs.450, will go to the West Bengal state government in the form of

SGST.

3. Central Goods and Services Tax or CGST

SUBODH PUBLIC SCHOOL, RAMBAGH CROSSING Chapter 10:-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) Just like State GST, the Central Goods and Services Tax of CGST is a tax under the GST regime which

is applicable on intrastate (within the same state) transactions. The CGST is governed by the CGST

Act. The revenue earned from CGST is collected by the Central Government. As mentioned in the

above instance, if a trader from West Bengal has sold goods to a customer in West Bengal worth

Rs.5,000, then the GST applicable on the transaction will be partly CGST and partly SGST. If the rate

of GST charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST. The total

amount to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned from

GST under the head of CGST, i.e. Rs.450, will go to the Central Government in the form of CGST.

4. Union Territory Goods and Services Tax or UTGST

The Union Territory Goods and Services Tax or UTGST is the counterpart of State Goods and

Services Tax (SGST) which is levied on the supply of goods and/or services in the Union Territories

(UTs) of India. The UTGST is applicable on the supply of goods and/or services in Andaman and

Nicobar Islands, Chandigarh, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep. The UTGST is

governed by the UTGST Act. The revenue earned from UTGST is collected by the Union Territory

government. The UTGST is a replacement for the SGST in Union Territories. Thus, the UTGST will be

levied in addition to the CGST in Union Territories.

NOTE—If the GST rate is 12 %,it will comprise of 6 % CGST + 6% SGST ;in case of sales outside the

State, it will be called IGST 12 %.

Similarly ,If the GST rate is 18 % ,it will comprise of 9 % SGST ,in case of sales outside the state, it

will be called 18 % .And so on.

Reverse Charge—Certain purchases of goods and services are placed under reverse

charge.

Reverse charge means that GST is not charged by the seller but is paid by the purchaser to the

Government and claim it as Input GST. Goods and services placed under Reverse charge are:

Purchase of goods and services by Registered Dealer from Unregistered Person ,Payment of fee to

Lawyers ,Use of Copyright ,Transport of goods, Insurance Commission etc.

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)


extramarks learning app if content is not available then please refer to the following

for detailed understanding.

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) ACCOUNTING PROCEDURE--

* In case of Intra state supply of goods and services— 1.For purchase of goods—

Purchase A/c Dr.

Input CGST A/c. Dr.

Input SGST A/c Dr.

To Bank/Creditors A/c.

(Goods Purchased)

2.For Sale of goods---

Bank /Debtors A/c Dr.

To Sales A/c

To Output CGST A/c

To Output SGST A/c

(Goods Sold)

3.For Purchase Return---

Creditors A/c Dr.

To Purchase Return A/c

To Input CGST A/c

To Input SGSTA/c

(Purchase Return)

4.For Sales Return—

Sales Returns A/c Dr.

Output CGST A/c Dr.

Output SGST A/c Dr.

To Debtors A/c

(Sales Returns)

5.For Purchase of fixed Assets—

Fixed Assets A/c Dr.

Input CGST A/c Dr.

Input SGST A/c Dr.

To Bank A/c

(Being Purchase of fixed assets)

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10- ACCOUNTING FOR GOODS AND SERVICE TAX (GST)




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) In case of sales returns, Output CGST A/c and Output SGST A/cs. are debited because at the

time of sale Output CGST A/c. and Output SGST A/cs. were credited.

6.For Expenses—

Expenses A/c Dr.

Input CGST A/c Dr.

Input SGST A/c Dr.

To Bank A/c

(Expenses incurred)

7.For Income—

Bank A/c Dr.

To Commission Received A/c

To Output CGST A/c

To Output SGST A/c

(Income received)

8.For goods withdrawn by the Proprietor for personal use –

Drawings A/c Dr.

To Purchases A/c

To Input CGST A/c

To Input SGST A/c

(Goods taken for personal use )

9. For goods given as free samples ,loss of goods by fire or goods stolen –

Advertisement A/c Dr.

Loss by Fire A/c Dr.

Loss by Theft A/c Dr.

To Purchases A/c

To Input CGST A/c

To Input SGST A/c

(Goods distributed as free samples ,goods stolen and goods destroyed by fire and Input

CGST and Input SGST reversed)

10.For setting off Input CGST against Output CGST :

Output CGST A/c Dr.

To Input CGST A/c

(Input CGST set off against Output CGST )

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) 11.For setting off Input SGST against Output SGST –

Output SGST A/c Dr.

To Input SGST A/c

(Input SGST set off against Output SGST )

12.For payment of GST –

Output CGST A/c Dr.

Output SGST A/c Dr.

To Bank A/c

(Balance amount of Output GST deposited with the Government )

GST NOT LEVIED –

1.Amount introduced into the business by proprietor as Capital.

2.Amount withdrawn by the proprietor for personal use.

3.Amount deposited into Bank.

4.Amount withdrawn from Bank.

5.Amount paid to Creditors and discount received.

6.Amount received from Debtors and discount allowed.

7.Bad-debts written off and bad –debts recovered.

8.Payment of wages and Salary.

9.Payment of Electricity and Water Bills.

10.Payment of Travelling Expenses.

* In case of Inter-state supply of goods and services (Sales from

one state to another state )

1.For purchase of Goods –

Purchases A/c Dr.

Input IGST A/c Dr.

To Bank /Creditors

2.For sale of Goods—

Bank /Debtors A/c Dr

To Sales A/c

To Output IGST A/c

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10 :-ACCOUNTING FOR GOODS AND SERVICE TAX (GST) 3.For Purchase of Assets—

Assets A/c Dr.

Input IGST A/c Dr.

To Bank A/c

4.For Expenses incurred Outside the state -

Expenses A/c Dr.

Input IGST A/c Dr.

To Bank A/c

5.For Income earned from outside the state –

Bank A/c Dr.

To Income A/c

To Output IGST A/c


MAY 22,2020




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING


Question 1:

Pass entries in the books of Mukerjee & Sons. assuming all transactions have taken place

within the state of Uttar Pradesh. Assume CGST @9% and SGST @ 9%.

2018

March 1 Purchased goods for Rs.5,00,000 from Mehta Bros.

March

10

Sold goods for Rs.8,00,000 to Munjal & Co.

March

15

Paid for advertisement Rs.40,000 by cheque.

March

18

Purchased furniture for office use Rs.50,000 and payment made

by cheque.

March

25 Paid for printing and stationery Rs.8,000.

March

31

Payment made of balance amount of GST.

ANSWER:

Journal

Date Particulars L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs.)

2018

Mar 04 Purchases A/c Dr. 5,00,000

Input CGST A/c Dr. 45,000

Input SGST A/c Dr. 45,000

To Mehta Bros. A/c 5,90,000

(Purchased from Mehta Bros.)

Mar 10 Munjal & Co. A/c Dr. 9,44,000

To Sales A/c 8,00,000

To Output CGST A/c 72,000

To Output SGST A/c 72,000

(Sold goods to Munjal & Co.)

Mar 15 Advertisement A/c Dr. 40,000



To Bank A/c 47,200

(Paid for advertisement)

Mar 18 Furniture A/c Dr. 50,000



To Bank A/c 59,000

(Purchased office furniture)

Mar 25 Printing & Stationery A/c Dr. 8,000

Input CGST A/c Dr. 720

Input SGST A/c Dr. 720

To Cash A/c 9,440

(Paid for printing and stationery)

Mar 31 Output CGST A/c Dr. 53,820

Output SGST A/c Dr. 53,820

To Input CGST A/c 53,820

To Input SGST A/c 53,820

(Input tax credit availed)


Output SGST A./c Dr. 18,180

To Bank A/c 36,360

(Balance tax paid to government)

17,93,640 17,93,640

Question 2:

Pass entries in the books of Devdhar & Bros. Odisha, assuming all transactions have been

entered within the state, charging CGST and SGST @ 9% each:

2018

March 4 Purchased goods for Rs.5,00,000 from Sunil Bros.

7 Goods returned to Sunil Bros. for Rs.20,000

10 Sold goods to Mehta & Co. for Rs.8,00,000

12 Goods returned by Mehta & Co. for Rs.30,000

20 Goods withdrawn by Proprietor for personal use Rs.10,000

25 Goods distributed as free samples Rs.5,000

26 Paid advertisement expenses by cheque Rs.20,000

31 Payment made of balance amount of GST.


MAY 23,2020






ANSWER:

Journal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018




To Sunil Bros. A/c 5,90,000

(Purchased from Sunil Bros.)

Mar 07 Sunil Bros. A/c Dr. 23,600

To Purchases Return A/c 20,000



(Goods returned to Sunil Bros.)

Mar 10 Mehta& Co. A/c Dr. 9,44,000




(Sold goods to Mehta& Co.)

Mar 12 Sales Return A/c Dr. 30,000

Output CGST A/c Dr. 2,700


To Mehta & Co. A/c 35,400

(Goods returned by Mehta & Co.)

Mar 20 Drawings A/c Dr. 11,800

To Purchases A/c 10,000

To Input CGST A/c 900

To Input SGST A/c 900

(Goods withdrawn for personal use)

Mar 25 Free Samples A/c Dr. 5,900

To Purchases A/c 5,000

To Input CGST A/c 450


(Goods distributed as free samples)

Mar 26 Advertisement A/c Dr. 20,000



To Bank A/c 23,600

(Paid for advertisement)







Output SGST A./c Dr. 25,650

To Bank A/c 51,300

(Balance tax paid to government)

17,72,900 17,72,900

Question 3:

Pass entries in the books of Ganguli & Sons. assuming all transactions have been entered

in the state of West Bengal:

(i) Purchased goods for Rs.2,00,000 and payment made by

cheque.

(ii) Sold goods for Rs.1,60,000 to Devki Nandan & Sons.

(iii) Purchased goods for Rs.50,000 on credit.

(iv) Paid for printing and stationery Rs.4,000.

(v) Received for commission Rs.5,000.

(vi) Output GST adjusted against Input GST.

Assume CGST @ 6% and SGST @ 6%.

ANSWER:

Journal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

Purchases A/c Dr. 2,00,000



To Cheque A/c 2,24,000

(Purchased goods and paid by cheque)

Devki Nandan & Sons A/c Dr. 1,79,200




(Sold goods toDevki Nandan & Sons)

Purchases A/c Dr. 50,000



To Creditor A/c 56,000

(Purchased goods on credit)

Printing & Stationery A/c Dr. 4,000



To Cash A/c 4,480

(Paid for printing and stationery)

Cash A/c Dr. 5,600

To Commission Received A/c 5,000

To Output CGST A/c 300

To Output SGST A/c 300

(Interest received)






4,89,080 4,89,080

Input CSGT (Balance) = Rs 5,340

Input SGST (Balance) = Rs 5,340

Question 4:

Pass entries for the following transactions in the books of M/s Karthikeyan & Co. of

Chennai:

2019

June 10 Purchased goods from Ravichandran of Madurai of the list price of

Rs.2,00,000 at 25% trade discount at 4% cash discount on purchase price of

goods. Paid CGST and SGST @ 9% each. Paid the entire amount by cheque

on the same date.

June 25 Sold goods to Ramalingam of Erode of the list price of Rs.3,75,000 at 20%

trade discount and 2% cash discount on sale price. Charged CGST and SGST

@ 9% each. Full amount was received by cheque on the same date.

Ignore adjustment and payment of GST.

ANSWER:

Journal

In the books of M/s Karthikeyan & Co.


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2019

June 10 Purchases A/c Dr. 1,50,000



To Bank A/c 1,71,000

To Discount received A/c 6,000

(purchases from Ravichandaran @25% T.D. &

4% cash discount)

June 25 Bank A/c Dr. 3,48,000

Discount Allowed A/c Dr. 6,000




(goods sold to Ramalingam @20% T.D. & 2%

cash discount)

TOTAL 5,31,000 5,31,000

Working Note:

(1) Calculation of the amount paid on purchases

List price of goods purchased 2,00,000

Less: trade discount @ 25% (50,000)

1,50,000

Add: Input CGST @ 9% 13,500

Output SGST @ 9% 13,500 27,000

1,77,000

Less: Cash discount @ 4% (6,000)

Amount payable 1,71,000

(2) Calculation of the amount received on sales

List price of goods sold 3,75,000

Less: trade discount @ 20% (75,000)

3,00,000

Add: Input CGST @ 9% 27,000

Output SGST @ 9% 27,000 54,000

3,54,000

Less: Cash discount @ 2% (6,000)

Amount payable 3,48,000


MAY 24,2020

HOLIDAY

Eid ul fitr

* Revise the previous topics


MAY 25,2020

HOLIDAY

MAHARANA PRATAP JAYANTI

* Revise the previous topics

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 10:-ACCOUNTING FOR GOODS AND SERVICE TAX (GST)

MAY 26,2020






Question 5:

Record the following transactions in the books of Sahdev & Sons assuming all transactions

have been entered within the state of Bihar, Charging CGST and SGST @ 9% each.

(i) Bought goods from Nanak Bros. for Rs.4,00,000 at 10% trade

discount and 3% cash discount on purchase price. 25% of the

amount paid at the time of purchase.

(ii) Sold goods to Kumar & Sons. for Rs.2,00,000 at 20% trade

discount and 5% cash discount on sale price. 60% of the

amount received by Cheque.

(iii) Received from Gopi Chand Rs.38,000 by Cheque after

deducting 5% cash discount.

(iv) Paid Rs.20,000 for rent by Cheque.

(v) Paid Rs.50,000 for salaries by Cheque.

(vi) Goods worth Rs.10,000 distributed as free samples.

(vii) Rs.5,000 due from Chanderkant are bad-debts.

(viii) Sold household furniture for Rs.15,000 and the proceeds were

invested into business.

ANSWER:

Journal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)




To Cash A/c 1,03,014

To Nanak Bros. A/c 3,18,600

To Discount Received A/c 3,186

(Purchased goods)

Kumar & Sons A/c Dr. 75,520

Bank A/c 1,07,616

Discount Allowed A/c 5,664




(Sold goods)

Bank A/c Dr. 38,000

Discount Allowed A/c Dr. 2,000

To Gopi Chand A/c 40,000

(Received from Gopi Chand in full settlement)

Rent A/c Dr. 20,000



To Bank A/c 23,600

(Paid for rent)

Salaries A/c Dr. 50,000

To Bank A/c 50,000

(Paid salaries)

Advertisement A/c Dr. 11,800

To Purchases A/c Dr. 10,000

To Input CGST A/c Dr. 900


(Goods distributed as free samples)

Bad Debts A/c Dr. 5,000

To Chanderkant A/c 5,000

(Debtor proved bad)

Cash A/c Dr. 15,000

To Capital A/c 15,000

(Invested money into business)

7,59,000 7,59,000

Question 6:Pass entries in the books of Mr. Roopani of Gujarat assuming CGST @ 9% and SGST@ 9%.

(i) Purchased goods for Rs.2,00,000 from Suryakant of Jaipur

(Rajasthan) on Credit.

(ii) Sold goods for Rs.1,50,000 to Mr. Pawar of Mumbai

(Maharashtra) and the cheque received was sent to bank.

(iii) Sold goods for Rs.2,50,000 within the state on credit.

(iv) Paid insurance premium of 20,000 by cheque.

(v) Purchased furniture for office for Rs.60,000 by cheque.

(vi) Payment made of balance amount of GST.

ANSWER:

Journal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

(i) Purchases A/c Dr. 2,00,000

Input IGST A/c 36,000

To Suryakant’s A/c 2,36,000


(ii) Bank A/c Dr. 1,77,000


To Output IGST A/c 27,000

(Sold goods and received cheque)

(iii) Debtors A/c Dr. 2,95,000




(Goods sold on credit)

(iv) Insurance Premium A/c Dr. 20,000



To Bank A/c 23,600

(Paid for insurance premium)

(v) Office Furniture A/c Dr. 60,000



To Bank A/c 70,800

(Purchased office furniture)

(vi) Output IGST A/c Dr. 27,000

To Input IGST A/c 27,000

(Input Tax credit up to Rs.27,000 availed and

balance to be adjusted against Output CGST)

(vii) Output CGST A/c Dr. 22,500



To Bank A/c 6,300

(Input tax credit availed and balance paid)

(viii) Output SGST A/c Dr. 22,500


To Bank A/c 15,300

(Input tax credit availed and balance paid)

Total 8,74,400 8,74,400

Working Note: GST Common Set Off Procedure:

Output

IGST

(Rs.)

Output

CGST

(Rs.)

Output SGST

(Rs.)

27000 22500 22500

Input IGST –27,000

(36000-

9000)

–9000 –

Input CGST – –7,200

(1800 + 5400)

–

Input SGST – – –7,200

(1800 + 5400)

Payable Nil 6,300 15,300

Question 7:

Pass entries in the books of Sh. Jagdish Mishra of Lucknow (U.P.) assuming CGST @ 6%

and SGST @ 6%:

2018

March 5 Purchased goods for Rs.2,50,000 from Virender Yadav of Patna

(Bihar).

March

12

Sold goods costing Rs.60,000 at 50% profit to Partap Sinha of

Ranchi (Jharkhand).

March

14

Purchased goods for Rs.70,000 from Ram Nath of Kanpur (U.P.)

against cheque.

March

18

Sold goods at Varanasi (U.P.) Costing Rs.2,25,000

at 3313%3313% profit less trade discount 10% against cheque

which was deposited into bank.

March

20 Paid rent Rs.25,000 by cheque.

March

31

Payment made of balance amount of GST.

ANSWER:

Journal

Date Particulars L.F. Debit Credit

Amount

(Rs.)

Amount

(Rs.)


Input IGST A/c 30,000 .

To Virender Yadav A/c 2,80,000


Mar 12 Partap Sinha A/c Dr. 1,00,800

To Sales A/c 90,000


(Sold goods on credit)

Mar 14 Purchases A/c Dr. 70,000



To Bank A/c 78,400

(Purchased goods against cheque)

Mar 18 Bank A/c Dr. 3,02,400




(Sold goods against cheque)

Mar 20 Rent A/c Dr. 25,000



To Bank A/c 28,000

(Paid rent by cheque)

Mar 31 Output IGST A/c Dr. 10,800







Mar 31 Output SGST A/c Dr. 16,200



To Bank A/c 1,800

8,32,800 8,32,800


MAY 27,2020






Question 8:

Pass entries in the books of Krishnan of Bengaluru (Karnataka) in the following cases:

I Purchased goods from Karunakaran of Chennai for Rs.1,00,000.

(IGST @18%)

II Sold goods to Ganeshan of Bengaluru for Rs.1,50,000.

(CGST @ 6% and SGST @ 6%)

III Sold goods to S. Nair of Kerala for Rs.2,60,000.

(IGST @18%)

IV Purchased a Machinery for Rs.80,000 from Surya Ltd. against cheque.


V Paid rent Rs.30,000 by cheque.


VI Purchased goods from Ram Mohan Rai of Bengaluru for Rs.2,00,000.


VII Paid insurance premium Rs.10,000 by cheque.


VIII Received commission Rs.20,000 by cheque which is deposited into bank.


IX Payment made of balance amount of GST.

ANSWER:

Journal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)



To Karunakaran A/c 1,18,000


Ganeshan A/c Dr. 1,68,000





S. Nair A/c Dr. 3,06,800

To Sales A/c Dr. 2,60,000



Machinery A/c Dr. 80,000

Input CGST A/c 7,200

Input SGST A/c 7,200

To Bank A/c 94,400

(Purchased Motor bike against cheque)

Rent A/c Dr. 30,000



To Bank A/c 33,600

(Paid rent by cheque)




To Ram Mohan Rai A/c 2,24,000


Insurance Premium A/c Dr. 10,000



To Bank A/c 11,800

(Paid insurance premium by cheque)

Bank A/c Dr. 23,600

To Commission A/c 20,000



(Received commission and deposited in bank)

Output IGST A/c Dr. 18,000








Output IGST A/c Dr. 28,800



To Bank A/c 6,600

10,48,600 10,48,600

Question 9:

Pass entries in the books of all parties in the following cases assuming CGST @ 6% and

SGST @ 6%:

2018

March 1 Mahesh Chandra of Bihar purchased goods for Rs.1,00,000 from

Sunil Soren of Jharkhand and sold the same to Deepak Patnaik of

Odisha for Rs.1,50,000.

March 5 Deepak Patnaik sold goods to Suresh Yadav of Odisha for

Rs.1,80,000.

March

10

Suresh Yadav sold goods to Ravi Chakravarti of West Bengal for

Rs.2,50,000.

March

14

Ravi Chakravarti sold goods costing Rs.2,50,000 to Sanjay

Diwedi of West Bengal at a profit of 40% on cost.

ANSWER:

(a)

Journal of Mahesh Chand, Bihar


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018



To Sunil Soren 1,12,000

(Purchased goods plus 12% IGST)

Mar 01 Deepak Patnaik Dr. 1,68,000



(Sold goods plus 12% IGST)

Total 2,80,000 2,80,000

(b)

Journal of Sunil Soren, Jharkhand


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018

Mar 01 Mahesh Chand Dr. 1,12,000




Total 1,12,000 1,12,000

(c)

Journal of Deepak Patnaik, Odisha


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018



To Mahesh Chand 1,68,000


Mar 05 Suresh Yadav Dr. 2,01,600




(Sold goods plus 6% CGST and SGST each)

Total 3,69,600 3,69,600

(d)

Journal of Suresh Yadav, Odisha


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018




To Deepak Patnaik 2,01,600


Mar 10 Ravi Chakravarti Dr. 2,80,000




Total 4,81,600 4,81,600

(e)

Journal of Ravi Chakravarti, West Bengal


Debit

Amount

(Rs.)

Credit

Amount

(Rs.)

2018



To Suresh Yadav 2,80,000


Mar 14 Sanjay Diwedi Dr. 3,92,000




(Sold goods costing ₹. 2,50,000 at 40%

Profit plus 6% CGST and SGST each)

Total 6,72,000 6,72,000



PRACTICE WORKSHEET -- 1

Short Answer Question

Question 1

What is GST?

Answer: Goods and services tax (GST) is a tax imposed indirectly on the goods and services supply.

Question 2

Name the two central taxes that have merged into GST.

Answer: The two central taxes that have merged into GST are excise duty and customs duty.

Question 3

Name the two-state taxes that have merged into GST.

Answer: The two-state taxes that have merged into GST are purchase tax and VAT.

Question 4

Give two advantages of GST.

Answer: The two advantages of GST are a) decreases the cost of goods and b) reduces tax invasion.

Question 5

What is the full form of CGST?

Answer: The full form of CGST is Central Goods and Services Tax.

Question 6

What is the full form of SGST?

Answer: The full form of SGST is State Goods and Services Tax.

Question 7

What is the full form of IGST?

Answer: The full form of IGST is Integrated Goods and Services Tax.

Question 8

What is CGST?

Answer: CGST is a tax imposed on supplies of goods and services within the state-imposed by the central government and administered by the CGST Act.

Question 9

What is IGST?

Answer: IGST is a tax imposed on all Inter-state supplies of both import and export of goods and services and is supervised by the IGST Act.

---------------------------------------------------------------------------------

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11—Books of Original Entry-Cash Book

LEARNING OUTCOMES After studying this chapter, you should be able to understand:-

*Special purpose subsidiary books and their advantages

*Meaning of Cash Book

*Distinction between Cash Account and Cash Book

*Types of Cash Book-

--- Single Column Cash Book

---Double Column Cash Book

--- Petty Cash Book

*Recording of entries in Cash Book

REFERENCES -1.N.C.E.R.T

2.Extramarks

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book

MAY 28,2020





Meaning of Cash Book- The cash book is used to record receipts and payments of cash. It

works as a book of original entry as well as a ledger account. The entries related to receipt and

payment of cash are first recorded in the cash book and then posted to the relevant ledger

accounts. Moreover, a cash book is a substitute for cash account in the ledger. A company that

properly maintains a cash book does not need to open a cash account in its ledger.

The book in which all cash transactions (either cash is received or paid) are primarily

recorded according to dates, is called 'Cash Book'.

Features:

A Cash Book has the following features:

1. It plays a dual role. It is both a book of original entry as well as a book of final

entry. All cash transactions are primarily recorded in it as soon as they take place;

so it is a journal (a book of original entry). On the other hand, the cash aspect of all

cash transactions is finally recorded in the Cash Book (no posting in Ledger); so a

Cash Book is also a Ledger (a book of final entry).

2. Only one aspect of cash transaction is posted to the ledger account. The other aspect

( i.e. cash aspect) needs no posting in Cash A/c. Since the Cash Book is the

substitute for Cash A/c, no Cash A/c is opened in the ledger.

3. It has two identical sides-left hand side, the debit side and right hand side, the credit

side.

4. All the items of cash receipts are recorded on the left hand side and all items of cash

payments on the right hand side in order of date.

5. The difference between the total of two sides shows cash in hand.

6. Its balance is verified by counting actual cash in the cash box.

7. It always shows debit balance. It can never show credit balance.

Advantages:

Generally cash transactions are numerous. What is credit transaction today, will be cash

transactions tomorrow. In other words, all credit transactions are finally settled by cash. If

like all other transactions cash transactions are also recorded primarily in Journal, the cash

aspect of the transactions will be required to be posted to Cash A/C, in the Ledger

separately. This involves much time and labour. This is why, cash transactions are recorded

in a separate book named Cash Book. It saves much time and labour. Besides this the Cash Book renders the following benefits:

1. Daily cash receipts and cash payments are easily ascertained.

2. Cash in hand at any time can easily be ascertained through Cash Book balance.

3. Any mistake in the book can be easily detected at the time of verification of cash.

4. Any defalcation of money can be detected while verifying cash. 5. Since cash is verified daily, Cash Book is always kept up-to-date.


Is Cash Book a Journal or a Ledger?

From the above discussion it appears that the Cash Book is the substitute for the Cash

Account. In fact, no separate Cash Account is opened in the Ledger, Cash Book serves the

purpose of the Cash Account. The entries in Cash Book are regarded as one aspect of the

Double Entry System - the other aspect is posted to the Ledger in the concerned account.

L.C. Cropper remarked "Every entry in the Cash Book makes one half of a double entry; the

other half of the double entry appears on the opposite side of some account in the Ledger. "From this angle, 'Cash Book is a Ledger'.

On the other hand, all cash transactions are primarily recorded in the Cash Book in order of

date and thereafter posted to the concerned ledger accounts. Judging from this angle, 'Cash

Book is a Journal'. Thus we see that a Cash Book is the 'mixture of Journal and Ledger'.

According to Spicer & Pegler, "the Cash Book is actually a ledger account, but owing to the

large number of entries made therein, it is kept in a separate book, called a Cash Book,

which is used also as a book of prime entry."

Specimen/format of Simple Cash Book:

Date Particular V. No. L. F. Amount$ Date Particulars V. No. L. F. Amount$

The Columns of the Cash Book are Explained Below:

1. Date:

The date of transaction is written in this column in two lines—in the first line, the year and

in the second line, the name of the month followed by the actual date.

2. Particulars:

In this column the name of the opposite account is written (the second aspect of cash

transaction). Below this is written the narration of the transaction.

3. L.F. (Ledger Folio):

The page number of the Ledger where the concerned (opposite ) account has been opened,

is written in this column. This will help to locate the account from the Ledger. It may be

noted that in a Ledger account J.F. is written as reference, while in a Cash Book L.F. is written. It is so, because cash transactions are not recorded in any Journal.


4. Amount:

The amount of the transaction is recorded in this column. The amount of cash received is

recorded on the debit side in amount column and the amount of cash paid is recorded on the credit side in amount column.

5. V. NO. (Voucher Number):

The voucher number of each item of receipt and payment is also written. A voucher is

necessary for each item of receipt and payment. Generally, a voucher has a serial number

and this number-is written in this column (V. No).

When cash is received from a debtor or customer, generally a receipt or 'cash memo' is

issued to the debtor which is called Receipt Voucher. Again, when money is paid to a

creditor or supplier a receipt is obtained from him which is called 'Payment Voucher, Cash

transactions are recorded in the Cash Book on the basis of Receipt Voucher and Payment

Voucher.

Thus, a document evidencing cash receipts and payments and forming the basis for making

entries in the Cash Book is called Cash Voucher.

Distinction Between a Cash Book and a Cash Account:

In fact, Cash Book is a substitute for a Cash Account. Yet there are some differences

between the two, which are given below:

Cash Book Cash Account

1. It is a separate book in which cash

transactions are directly recorded.

1. It is an account in a Ledger in which

posting is made from journal.

2. It serves the purpose of both journal and

ledger and hence cash transactions need

not be primarily recorded in Journal.

2. It serves the purpose of a Ledger only.

If Cash A/C is opened in the Ledger, all

cash transactions are first recorded in

journal.

3. Narration is required. 3. Narration is not required.

4. A column for Ledger Folio is provided. 4. A column for Journal Folio is provided.


MAY 29,2020





Types of cash book There are four major types of cash book that companies usually maintain to account for their cash

flows. These are given below:

1.A single column cash book to record only cash transactions.

2.A double/two column cash book to record cash as well as bank transactions.

3.A triple/three column cash book to record cash, bank and purchase discount and sales discount.

4.A petty cash book to record small day to day cash expenditures.

Question 1:

Enter the following transactions in a Single Column Cash Book∶−

2016 (Rs.)

May 1 Commenced business with Cash 25,000

3 Bought goods for Cash 10,000 3 Paid Carriage 200 4 Sold goods for Cash 6,000

10 Received from Ram 1,000 12 Paid to Shiv Kumar 2,600 15 Cash Sales 8,400 18 Purchased furniture for cash for office 5,000 20 Paid for Advertisement 500 20 Purchased goods from Mahesh on credit 6,000 24 Paid to Mahesh 4,000 25 Paid Wages 400 27 Received for Commission 1,500 28 Withdrew for personal use 2,200 31 Paid salary 700

ANSWER:

Cash Book

Dr. Cr.

Date Particulars L.F. Cash (Rs) Date Particulars L.F. Cash (Rs)

2016 2016

May

01

Capital A/c 25,000 May 03

Purchases A/c 10,000

May Sales A/c 6,000 May 03 Carriage A/c 200

04

May

10 Ram

1,000 May 12

Shiv Kumar 2,600

May

15 Sales A/c

8,400 May 18

Furniture A/c 5,000

May

27 Commission A/c

1,500 May 20

Advertisement A/c 500

May 24 Mahesh 4,000

May 25 Wages A/c 400

May 28 Drawings A/c 2,200

May 31 Salary A/c 700

May 31 Balance c/d 16,300

41,900 41,900

June

01 Balance b/d

16,300

Note: Transaction dated May 20, 2016, will not be recorded in Cash Book

because credit transactions do not affect the cash balance.

Question 2:

Enter the following transactions in M/s Mukerjee & Bros. Single Column Cash Book:

2017 (Rs.)

April 1 Balance of Cash in hand 50,000

3 Purchased goods for cash 22,000

7 Purchased goods 15,000

10 Purchased goods from Gopi 30,000

13 Purchased goods from Gopi for cash 10,000

15 Sold goods 20,000

18 Sold goods to Vishwakarma 45,000

20 Sold goods to Raghunandan for cash 18,000

25 Received commission 5,000

30 Paid Rent 10,000


MAY 30,2020





ANSWER:

Cash Book Dr. Cr.

Date Particulars L.F. Cash (Rs)


2017

2017

April

01 Balance b/d 50,000 April

03 Purchases

A/c

22,000

April

15 Sales A/c

20,000 April

07

Purchases

A/c

15,000

April

20 Sales A/c

18,000 April

13 Purchases

A/c

10,000

April

25 Commission A/c

5,000 April

30

Rent A/c 10,000

April

30

Balance c/d 36,000

93,000 93,000

May

01 Balance b/d

36,000

Question 3:

Enter the following transactions in a Single Column Cash Book∶

2017 (Rs.)

Feb. 1 Mr. Vipin commenced business with Cash 2,00,000

3 Opened a Bank Account and deposited 75,000

5 Purchased goods for Cash 30,000

7 Purchased goods 15,000

10 Purchased goods from Surya Kant 40,000

12 Paid to Surya Kant 38,800

Discount received 1,200

15 Paid Wages in Cash 22,500

16 Paid to casual labour 1,500

20 Sold goods to Dev Raj for Cash 80,000

25 Paid electricity bill in Cash 12,000

26 Withdrew Cash from Bank 40,000

27 Received for Cash sales 5,000

27 Paid for miscellaneous expenses 500

ANSWER:

Cash Book Dr. Cr.



2017

2017

Feb.01 Capital A/c 2,00,000 Feb.03 Bank A/c 75,000 Feb.20 Sales A/c 80,000 Feb.05 Purchases A/c 30,000

Feb.26 Bank A/c 40,000 Feb.07 Purchases A/c 15,000 Feb.27 Sales A/c 5,000 Feb.12 Surya Kant 38,800

Feb.15 Wages A/c 22,500 Feb.16 Wages A/c 1,500

Feb.25 Electricity Charges

A/c

12,000

Feb.27 Miscellaneous

Expenses A/c

500

Feb.28 Balance c/d 1,29,700

3,25,000 3,25,000

Mar.01 Balance b/d 1,29,700


JUNE 01,2020





Question 4:

Enter the following transactions in a Single Column Cash Book:-

2016 Rs.

Dec. 1 Cash-in-hand 25,000

2 Cash Sales (CGST 6%, SGST 6%) 40,000

4 Received from X on behalf of Y 4,000

9 Paid to Som Pal 4,900

Discount Received 100

12 Received from Vijay Kumar 7,800

and discount allowed 200

20 Bought goods for Cash (CGST 6%, SGST 6%) 20,000

21 Paid Cartage (CGST 6%, SGST 6%) 1,000

23 Remitted to Dharamvir 1,880

and discount allowed by him 120

25 Received M.O. from Mohan 500

27 Borrowed from Mahabir 7,500

29 Received from Bhushan 3,900

discount allowed 100

31 Paid to Lalit Rs.2,700 in full settlement of his account of Rs.3,000

ANSWER: Cash Book

Dr. Cr.

Date Particulars L.F. Cash (Rs.) Date Particulars L.F. Cash (Rs.)

2016 2016

Dec. 01 Balance

b/d

25,000 Dec. 09

Som Pal 4,900

Dec. 02 Sales A/c 40,000 Dec. 20 Purchases A/c 20,000

Dec. 02 Output

CGST A/c

2,400 Dec. 20


Dec. 02 Output

SGST A/c

2,400 Dec. 20


Dec. 04 Y 4,000 Dec.21 Cartage 1,000

Dec. 12 Vijay

Kumar

7,800 Dec. 21

Input CGST A/c 60

Dec. 25 Mohan 500 Dec. 21 Input SGST A/c 60

Dec. 27 Mahabir’s

Loan A/c

7,500 Dec. 23

Dharamvir 1,880

Dec. 29 Bhushan 3,900 Dec. 31 Lalit 2,700

Dec. 31 Balance c/d 60,500

93,,500 93,500

2017

Jan.01 Balance

b/d

60,500

Question 5:Enter the following transactions in a Single Column Cash Book of M/s Suchitra Sen & Co. :

2017 (Rs.)

March 1 Cash in Hand 1,20,000

2 Bought machinery for Rs.60,000 and paid carriage 2,000

4 Bought goods for Rs.25,000 and paid carriage 1,000

5 Bought goods from Ravi Das 15,000

6 Cash received from sale of Motor bike 5,000

8 Sold goods for cash less 5% cash discount 20,000

10 Sold goods 40,000

12 Paid to Ravi Das on account 10,000

15 Bought goods from Suresh for cash less 4% cash discount 30,000

20 Paid to Ravi Das 4,500

Discount received 500

25 Cash collected from Ashok (Debtor) 10,000

28 Purchased postal stamps 500

28 Salary paid to accountant 15,000

ANSWER:

Cash Book Dr. Cr.



2017

2017

Mar.01 Balance b/d 1,20,000 Mar.02 Machinery A/c

(60,000 + 2,000)

62,000

Mar.06 Motor Bike A/c 5,000 Mar.04 Purchases A/c 25,000 Mar.08 Sales A/c 19,000 Mar.04 Carriage A/c 1,000 Mar.10 Sales A/c 40,000 Mar.12 Ravi Das 10,000

Mar.25 Ashok 10,000 Mar.15 Suresh 28,800 Mar.20 Ravi Das 4,500 Mar.28 Postal Stamps 500 Mar.28 Salary A/c 15,000 Mar.31 Balance c/d 47,200

1,94,000 1,94,000

Apr.01 Balance b/d 47,200


JUNE 02,2020





CONTRA ENTRY--

Contra entry refers to transactions involving cash and bank account. In other words, any entry which

affects both cash and bank accounts is called a contra entry. Contra in Latin means the opposite. It is more

popularly known as contra voucher.

To make the definition further simpler, any transactions involving a transfer of cash between one cash a/c

to another or one cash a/c to another bank a/c or one bank account to another is called as a contra entry.

To record contra entries, traditionally a cash book with cash and bank columns is prepared where both the

aspects of the transaction will be entered in the same book which is Contra Book.

In the debit side of the contra book, ‘To Cash A/c’ will be entered under the particulars column and the

amount will be entered in the bank column.

In the credit side of the contra book ‘By Bank A/c’ will be entered under the particulars column and the

amount will be entered in the cash column.

And all such contra entries are denoted by writing the letter ‘C’ in the L.F. column, on both sides of the

cash book. They represent that no posting in respect this is necessary in the ledger.

With automation of accounting using accounting software, these transactions are auto-posted into the

relevant ledger and there is less relevance of cash book format discussed above.

Question 6:

Write up Cash Book of Bhanu Partap with Cash and Bank Columns from the following

transactions:−

2017 (Rs.)

March 1 Cash-in-hand 2,710

Cash at Bank 27,500

3 Received from Subhash 3,500

4 Sold goods for cash 10,000

7 Paid Rent by Cheque 800

8 Paid Sohan by cheque 3,000

10 Bought goods for cash 15,000

12 Paid cash for stationery 200

Drew from Bank for office use 8,000

15 Received cheque from Surendra and sent it to Bank 6,600

16 Paid for advertisement 750

18 Issued cheque in favour of Nath Brothers 4,300

https://tallysolutions.com/accounting/contra-account

https://tallysolutions.com/business-guides/accounting-software-india

https://tallysolutions.com/accounting/general-ledger-definition-format-process-and-example

19 Cash Sales 13,000

Paid into Bank 16,000

20 Received cheque from Vinod and sent it to Bank 2,400

22 Bought Scooter and paid for the same by cheque 18,000

25 Bank returned Surendra's cheque dishonoured

28 Paid salary by cheque 7,200

Paid Trade expenses 2,000

29 Cash sales 9,500

30 Paid into Bank 10,000

ANSWER:

Cash Book

Dr. Cr.

Date Particulars L.F. Cash (Rs) Bank (Rs) Date Particulars L.F. Cash (Rs) Bank (Rs)

2017 2017

Mar. 01 Balance

b/d

2,710 27,500 Mar. 07

Rent A/c 800

Mar. 03 Subhash 3,500 Mar. 08 Sohan 3,000

Mar. 04 Sales A/c 10,000 Mar. 10 Purchases A/c 15,000

Mar. 12 Bank A/c C 8,000 Mar. 12 Stationery A/c 200

Mar. 15 Surendra 6,600 Mar. 12 Cash A/c C 8,000

Mar. 19 Sales A/c 13,000

Mar. 16 Advertisement

A/c

750

Mar. 19 Cash A/c C 16,000 Mar. 18 Nath Brothers 4,300

Mar. 20 Vinod 2,400 Mar. 19 Bank A/c C 16,000

Mar. 29 Sales A/c 9,500 Mar. 22 Vehicle A/c 18,000

Mar. 30 Cash A/c C 10,000 Mar. 26 Surendra 6,600

Mar. 28 Salary A/c 7,200

Mar. 28 Trade

Expenses A/c

2,000

Mar. 30 Bank A/c C 10,000

Mar. 31 Balance c/d 2,760 14,600

46,710 62,500 46,710 62,500

Apr. 01 Balance

b/d

2,760 14,600


JUNE 03,2020





Question 7-

Enter the following transactions in two Column cash book and find out the cash and bank

balance∶

2017

(Rs.)

Jan. 1 Started business with cash 20,000

Jan. 2 Opened a current account with the S.B.I. 8,000

Jan. 3 Bought goods by cheque 150

Jan. 4 Received cheque from Ram 200

Jan. 5 Sold goods for cash 40

Jan. 7 Paid into bank:

(i) Cash Rs.30

(ii) Cheque Rs.200 230

Jan. 8 Paid Shyam by cheque 345

Jan. 8 Paid carriage by cheque 180

Jan. 10 Drew cash from bank for office use 200

Jan. 30 Paid wages by cheque 60

ANSWER:

Cash Book

Dr. Cr.

Date Particulars L.F. Cash (Rs) Bank (Rs) Date Particulars L.F. Cash (Rs) Bank (Rs)

2017 2017

Jan. 01 Capital A/c 20,000

Jan.

02 Bank A/c

C 8,000

Jan. 02 Cash A/c C

8,000 Jan.

03 Purchases A/c

150

Jan. 05 Sales A/c 40

Jan.

07 Bank A/c

C 30

Jan. 07 Cheques-in-

Hand A/c

200

Jan.

08 Shyam

345

Jan. 07 Cash A/c C

30 Jan.

08 Carriage A/c

180

Jan. 10 Bank A/c C 200

Jan.

10 Cash A/c

C 200

Jan.

30 Wages A/c

60

Jan.

31 Balance c/d

12,210 7,295

20,240 8,230 20,240 8,230

Feb.01 Balance b/d 12,210 7,295

Working Note: Journal Proper

Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs)

2017

Jan. 04 Cheques-in-Hand A/c Dr. 200

To Ram 200

(Cheque received from Ram)

PETTY CASH BOOK-

Besides maintaining a main or general cash book, many companies also maintain a small cash book known as petty cash book to record small day to day expenditures of the business.

Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor etc. These small expenditures are usually paid using coins and currency notes rather than checks. The person responsible for spending petty cash and recording it in a petty cash book is known as petty cashier.

The chief cashier (also known as head or main cashier) bears the heavy responsibility of maintaining company’s general cash book in which receipts and payments amounting to hundreds or even thousands of dollars are recorded by him every day. He, therefore, usually delegates the responsibility for handling small day to day cash transactions to a bookkeeper, receptionist or some other reliable staff member. Like a general cash book, a petty cash book has a debit and a credit side. All receipts are recorded on the debit side and all payments are recorded on the credit side of petty cash book by the petty cashier.

https://www.accountingformanagement.org/what-is-a-cash-book/


JUNE 04,2020





Petty cash systems

The cash allocated for petty expenditures for a specific period is entered on the credit side of general cash book and on the debit side of petty cash book.

The cash is given to the petty cashier either on ordinary system or imprest system which are briefly explained below:

1. Ordinary system

Under ordinary system, a lump sum amount of cash is given to the petty cashier. When the whole amount is spent, the petty cashier submits the details of petty expenditures recorded in the petty cash book to the head or chief cashier for review.

2. Imprest system

Under imprest system, a fixed amount of money known as float is given to the petty cashier to meet petty expenditures for an agreed period which usually consists of a week or month. At the end of agreed period, the petty cashier submits the details of all expenditures incurred by him to the chief cashier. The total cash spent by the petty cashier during the period is reimbursed to him and the total cash available to spend at the start of the next period becomes equal to the original sum (i.e., float). At any time, the total of petty cash balance and all expenditures that have not been reimbursed to the petty cashier is equal to the agreed float.

Advantages of imprest system:The imprest system of petty cash is used by most of the companies because of the following advantages:

The imprest system reduces the chances of misuse of cash because the float can be immediately reduced if it is found to be more than adequate for the agreed period.

Under this system, the chief cashier periodically checks the record of petty cash. If an error is committed by petty cashier, it can be detected and rectified soon.

It saves the time of the firm’s chief cashier who is usually a busy person with heavy responsibilities of handling large receipts and payments by cash and checks.

The imprest system enables significant saving to be effected to post small items to accounts in the ledger since it uses an analysis system that collects small items together into weekly or monthly totals.

This system trains young staff members in handling cash with responsibility.*

There are little to no chance of misappropriation of cash by the person in charge because the imprested sum is usually very small.


JUNE 05,2020





Format of petty cash book

A simple format of petty cash book is given below:

Example

The petty cashier of John and James Company paid cash for the following expenditures during March 2018.

March 01: Balance brought forward; petty cash $50.

March 01: The amount of petty expenditures for previous moth reimbursed by chief cashier $200.

March 05: Bought some liquid material for cleaning purpose $25.

March 10: Paid $20 for van wash.

March 13: Bought pens and pencils $15.

March 17: Paid for fuel $35.

March 20: Paid $55 for casual labor.

March 22: Donated $10 to SBA – a charitable institution.

March 30: Bought a broom for office $5

Required: Record the above transactions in a petty cash book assuming a petty cash imprest system is used by the John and James company.

https://www.accountingformanagement.org/wp-content/uploads/2018/02/petty-cash-book-img1.png


JUNE 06,2020




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book Question-8

Record the following transactions in a Petty Cash Book drawn with suitable columns and

then balance the same:

2017 (Rs.)

Jan. 1 Petty cashier is given a monthly imprest amount of Rs.10,000. He

spent last month Rs.9,200 and got the balance from the head cashier

today.

Jan. 2 Paid for Wages 600

Jan. 3 Paid for sundry expenses 100

Jan. 5 Paid for stationery 700

Jan. 9 Paid for courier charges 200

Jan. 12 Stamps purchased 750

Jan. 14 Paid wages to casual labour 500

Jan. 16 Stationery purchased 400

Jan. 19 Paid for general expenses 610

Jan. 20 Paid for cartage 800

Jan. 22 Paid for advertising 900

Jan. 24 Paid for postage 400

Jan. 25 Paid for Taxi Fare 840

Jan. 27 Paid for entertainment 600

Jan. 29 Paid for carriage 500

Jan. 31 Paid for petty repairs 700

ANSWER:

Amount

Received (Rs)

C.B.

Folio Date

V.

No. Particulars

Total

Amount

(Rs)

Conveyanc

e

Printing &

Stationery

Postag

e Wages Cartage

Miscellaneous

Expenses

2017

800 Jan.

01

Balance b/d

9,200 Jan.

01

Cash A/c

Jan.

02

Wages A/c 600 600

Jan.

03

Sundry

Expenses

A/c

100 100

Jan. Stationery 700 700

05 A/c

Jan.

09

Courier

charges A/c

200 200

Jan.

12

Stamps A/c 750 750

Jan.

14

Wages A/c 500 500

Jan.

16

Stationery

A/c

400 400

Jan.

19

General

Expenses

A/c

610 610

Jan.

20

Cartage A/c 800 800

Jan.

22

Advt. A/c 900 900

Jan.

24

Postage A/c 400 400

Jan.

25

Taxi Fare

A/c

840 840

Jan.

27

Entertainm

ent A/c

600 600

Jan.

29

Carriage

A/c

500 500

Jan.

31

Repair A/c 700 700

8,600 840 1,100 1,350 1,100 1,300 2,910

Jan.

31

Balance c/d 1,400

10,000 10,000

1,400 Feb.

01

Balance b/d

8,600 Feb.

01

Cash A/c


JUNE 07,2020

SUNDAY

HOLIDAY * REVISE THE FOLLOWING TOPICS-


PRACTICE WORKSHEET-2 Q.1.What is a Cash Book?

Q.2.Is cash book a journal or a Ledger ?

Q.3.What are special Purpose subsidiary Books?

Q.4.Define Bank Overdraft.

Q.5.What are contra entries ?

Q.6.What is a Petty Cash Book ?

Q.7.Why a Cash Book always shows a debit balance ?

Q.8.Give one advantages of maintaining a Cash Book.

Q.9.Why Cash Book is called a book of Original entry ?

Q.10.Write one difference between Cash Account and Cash Book .

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JUNE 08,2020





PRACTICE WORKSHEET-3 Q.1. Enter the following particulars in the Cash Book with Cash and Bank columns:−

2016

April 1 Balance of cash in hand Rs.2,000 and at Bank Rs.12,000.

3 Received cash from Madhav Rs.1,800.

5 Cash Sales Rs.1,000

6 Purchases by cheque Rs.745.

9 Paid into Bank Rs.1,850.

10 Paid cash for freight Rs.54.

12 Drew from Bank for office use Rs.600.

13 Issued a cheque in favour of M/s Arun & Sons for Rs.985.

16 Paid into Bank Rs.715.

17 Drew Cash for his son’s birthday party Rs.175.

19 Received a cheque from Navin for Rs.380 and deposited it into bank on the same day.

20 Cash Sales Rs.200.

25 Drew from Bank for office use Rs.200.

26 Purchased furniture for Rs.1,000 and payment made by cheque.

27 Navin’s cheque dishonoured, Bank charges Rs.5.

29 Purchased business premises, payment made by cheque Rs.12,000.

30 Received cheque for Rs.675 from Harish.

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book Q.2.Enter the following transactions in a Two Column Cash Book :−

(i) Commenced business with cash Rs.50,000

(ii) Deposited in Bank 40,000

(iii) Received cash from Mohan Rs.950 in full settlement of a debt of Rs.1,000

(iv) Bought goods for cash Rs.10,000

(v) Bought goods by cheque Rs.15,000

(vi) Sold goods for a cheque for Rs.20,000 and deposited in Bank on the same day

(vii) Paid to Arun by cheque Rs.1,900 in full settlement of his account of Rs.2,000

(viii) Drew from Bank for office use Rs.1,000.

Q.3. Write the following transactions in a Two Column Cash Book and balance the Cash Book:−

2013 (Rs.)

Jan. 1 Cash in hand 6,000

Bank Balance (Cr) 3,000

3 Deposited into Bank 2,000

5 Received from Mohan 400

Discount allowed 10

7 Received a cheque from Hari and sent it to the bank 600

9 Received a cheque from Prem Mohan 1,600

Discount allowed 25

12 Withdrew from bank for office use 300

13 Bought goods for cash 600

14 Sold goods for cash 1,200

16 Paid to Ganesh by cheque 494

Discount received 6

18 Prem Mohan’s cheque deposited in the bank

20 Sold goods to Gopal for Rs.1,500 for which he gave cash Rs.800 and a cheque of Rs.700.

22 Deposited into bank (including Gopal’s cheque) 900

24 Paid rent by cheque 150

25 Withdrew from bank for personal use 200

28 Bank notifies that Prem Mohan’s cheque was dishonoured

30 Received from Anil Rs.270 in cash and Rs.540 by cheque.

Discount Allowed Rs.90.

The cheque was deposited into bank.

31 Bank charges as shown in Pass Book 5

Paid Salary 500

Q.4. Enter the following transactions in the Two Column Cash Book of Mr. Mohan:-

2018 Rs.

Jan.

1

Cash in Hand 2,200

Cash at Bank 50,000

3 Purchased goods for Rs.75,000; Trade Discount 20%; CGST 6%, SGST 6%; Payment

made by Cheque

4 Sold goods for Rs.40,000; Trade Discount 15%; IGST 12%; Payment received by Cheque

5 Received a cheque from Naresh 1,000

8 Cheque received from Naresh endorsed to Suresh in full settlement of his account of

Rs.1,050

10 Paid Life Insurance premium of Mr. Mohan 100

13 Received a cheque from Pawan in full settlement of his account of Rs.750. 700

16 Pawan’s cheque returned dishonoured by bank –

20 Deposited into Bank, balance of Cash in excess of Rs.250

Q.5. Enter the following transactions in a Two Column Cash Book:-

2016 Rs.

Dec.

1

Started business with cash 50,000

2 Pays into Bank 29,000

3 Received cheque from Raja & Co. 800

Discount allowed 20

5 Withdrew cash from bank for private use 240

10 Purchased goods for Rs.1,00,000; IGST 18%; Payment made by Cheque

12 Sold goods for Rs.1,50,000; Trade Discount 20%; IGST 18%; Payment received by

Cheque

14 Received cheque from Kamla 395

Discount allowed 15

16 Kamla’s cheque endorsed to Bala in full settlement of her account of Rs.425

29 Paid rent by cheque 1,000

30 Deposited into bank, balance of cash in excess of 450


JUNE 09,2020




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book Q.6. Enter the following transactions in the Cash Book with Cash and Bank Columns∶−

2016

June

1

Balance of Cash in Hand Rs.12,000; Overdraft at Bank Rs.1,500.

2 Deposited into Bank Rs.10,000.

Sold goods for Cash Rs.28,000 and paid half the proceeds into Bank.

3 Purchased goods for Rs.7,000 from Manoj & Co. on Credit.

5 Received a Money Order from Suresh Rs.500.

8 Received Rs.2,800 from Govind. Paid Rs.1,000 into Bank.

10 Received a cheque for Rs.7,600 from Subhash in full settlement of Rs.8,000 due from him.

12 Settled the account of Manoj & Co. by payment of Rs.6,600

half Cash and half by cheque.

13 Cheque received from Subhash deposited into Bank.

15 Paid for purchase of Machinery by cheque Rs.20,000.

16 Paid wages for the erection of above Machinery Rs.1,000.

17 Cheque issued for Rs.6,000 in favour of Sachdeva & Co. for purchase of furniture.

20 Purchased goods from Kalpna Garments for Rs.10,500 on credit.

Received a Bank Draft for Rs.4,800 from Damodar & Co. in full settlement of Rs.5,000 due from

them. Sent the draft to bank.

24 Bank issued a draft for Rs.10,000 in favour of Kalpna Garments on our request. Bank charged Rs.25

for issuing the draft. Account of Kalana Garments was fully settled.

26 Drew from bank for petty cash Rs.100.

28 Paid salary by cheque Rs.6,000.

30 Bank Charges Rs.50 and Interest Rs.1,620 charged by bank.

Deposited into bank the entire balance after retaining Rs.4,000 at office

Q.7. Prepare a Cash Book with Cash and Bank Columns from the following transactions:−

2017

March 1 Cash in hand Rs.1,800 and at Bank Rs.11,000.

5 Received a cheque for commission Rs.3,960. Cheque was immediately deposited into bank.

7 Bought goods for cheque Rs.7,000.

8 Bought goods for cash Rs.500.

10 Purchased a Computer and payment made by cheque of Rs.5,000.

14 Paid Trade Expenses Rs.105.

16 Paid into Bank Rs.1,000.

18 Ramesh who owed us Rs.500 became bankrupt and paid us 50 paise in a ₹.

20 Received Rs.400 from Manohar and allowed him discount Rs.10.

23 Withdrew from Bank Rs.400.

23 Paid Rs.300 to Ghanshyam Dass & Co. They allowed us discount Rs.10.

24 Received Rs.2,000 from Hari Ram and deposited the same into Bank.

25 Withdrew from Bank for private expenses Rs.300.

27 Sold goods for cash Rs.200.

28 Received cheque for goods sold Rs.9,000.

29 Received repayment of a loan of Rs.5,000 and deposited Rs.3,000 out of it into Bank.

30 Bank charges as per Book Rs.5.


JUNE 10,2020




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book Q.8. Compile a Two Column Cash Book from the following transactions of Kavita Garments∶−

2017

Feb.

1

Cash in hand Rs.7,500; Cash at bank Rs.8,000.

3 Received a cheque of Rs.5,880 for cash sales. Cheque was immediately deposited into bank.

5 Received two cheques from Kalpna each of Rs.10,000.

6 First cheque received from Kalpna is endorsed to Sunita in full settlement of Rs.10,200.

Second cheque is sent to bank for collection.

8 Second cheque received from Kalpna is returned as dishonoured by the bank.

The bank has debited our account with Rs.20 as bank charges on this cheque.

10 Received cheque from sale of old furniture Rs.1,950. Next day, the cheque is endorsed to a creditor

Ramesh in full settlement of Rs.2,000 due to him.

12 Purchased goods from Mohan on Credit for Rs.8,000.

15 Settled Mohan’s account by giving a cheque for Rs.4,000 and Cash Rs.3,900.

16 Goods sold to Pawan for Rs.6,000. He paid the amount in cash immediately after deducting 212%

cash discount.

20 Paid salary by cheque Rs.5,000.

25 Cash sale to date Rs.50,000 of which Rs.40,000 banked.

26 Paid electric bill of Rs.2,000 for January by cheque. Paid Rent for January Rs.1,500.

27 Cash purchases Rs.5,000, issued a cheque.

28 Deposited into bank cash retaining Rs.7,500.

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 11 :- Books of Original Entry-Cash Book Q.9. Prepare a Petty Cash Book on the Imprest System from the following:

2017

April 1 Received Rs.10,000 for Petty Cash.

3 Paid Cartage Rs.800.

4 Paid Bus Fare Rs.400; Speed Post Rs.200.

6 Paid for Stationery Rs.700.

7 Paid for Courier Services Rs.300.

9 Paid for Taxi fare Rs.800; Wages Rs.300.

10 Paid for Wages Rs.400; Charity Rs.500

11 Paid for Newspaper bill Rs.600.

12 Paid for soap Rs.320; Speed post charges Rs.300.

13 Paid for Postage Rs.780.

14 Paid for Repairs of Chairs Rs.500.

15 Paid for Refreshment to customers Rs.900.

Q.10. Record the following transactions in a Petty Cash Book with suitable columns. The book is kept on

imprest system, amount of imprest being Rs.4,000.

2017

April 1 Petty cash in hand Rs.540, Received cash to make-up the imprest.

Paid for office cleaning Rs.100.

April 4 Paid railway fare Rs.320, bus fare Rs.280, wages Rs.150.

April 5 Bought shorthand notebooks for office Rs.370.

April 7 Paid carriage on parcels Rs.150, paid for wages Rs.220.

April 10 Bought stamps for Rs.300, envelopes for Rs.450 and an accounts register for Rs.400.

April 12 Paid for repairs Rs.200, gave tips to office peon Rs.150.

April 13 Gave charity Rs.100, served tea to customers Rs.250.

April 15 Paid for wages Rs.160, rewards to servant Rs.100.

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SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 12-Introduction to Computers

JUNE 11,2020





Meaning of Computer--

A computer is a machine that accepts data as input, processes

that data using programs, and outputs the processed data as

information. Many computers can store and retrieve

information using hard drives. Computers can be connected

together to form networks, allowing connected computers to

communicate with each other.

Basic Concepts of Computer This is supposed to be a flash animation. You'll need the flash plugin and a browser that supports it

to view it.

Computer is an electronic device which is used to store the data, as per given instructions it gives

results quickly and accurately.

Data : Data is a raw material of information.

Information : Proper collection of the data is called information.

Characteristics of Computer

SPEED : In general, no human being can compete to solving the complex computation, faster than

computer.

ACCURACY : Since Computer is programmed, so what ever input we give it gives result with

accuratly.

STORAGE : Computer can store mass storage of data with appropriate formate.

DILIGENCE : Computer can work for hours without any break and creating error.

VERSATILITY : We can use computer to perform completely different type of work at the same

time.

POWER OF REMEMBERING : It can remember data for us.

NO IQ : Computer does not work without instruction.

NO FEELING : Computer does not have emotions, knowledge, experience, feeling


JUNE 12,2020





Computer and its components

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to view it.


to view it.


to view it.

Computer : Computer itself a combination of different type of

separate electronic device. i.e. Computer only will be computer if it

has INPUT DEVICE, PROCESS UNIT, and OUTPUT DEVICE.

Central Processing Unit (CPU) : It is heart and mind of the

computer without this unit computer unable to process.

Keyboard : This is an input device which is used to input the data

into the computer.

Mouse : This is also an input device which is used to input the data

into the computer.

Monitor : This is an output device which is used to show the result

of the instructions.


JUNE 13,2020




SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 12-Introduction to Computers Limitations of Computers

Limitations are the drawbacks of the computer system in which humans outperform them.

1.Lack of common-sense

This is one of the major limitations of computer systems. No matter how efficient, fast and reliable

computer systems might be but yet do not have any common sense because no full-proof algorithm

has been designed to programme logic into them. As computers function based on the stored

programme(s), they simply lack common sense.

2.Zero IQ

Another of the limitations of computer systems is that they have zero Intelligence Quotient (IQ).

They are unable to see and think the actions to perform in a particular situation unless that

situation is already programmed into them. Computers are programmable to complete each and

every task, however small it may be.

3.Lack of Decision-making

Decision-making is a complicated process involving information, knowledge, intelligence, wisdom,

and ability to judge. The computer system does not have the ability to make decisions on their own

because they do not possess all the essentials of decision-making.

They can be programmed to take such decisions, which are purely procedure-oriented. If a

computer has not been programmed for a particular decision situation, it will not take a decision

due to lack of wisdom and evaluation faculties. Human beings, on the other hand, possess this great

power of decision-making.

4.Computers can’t Decide

Computers are incapable of decision making as they do not possess the essential elements

necessary to take a decision i.e. knowledge, information, wisdom, intelligence and the ability to

judge.

5.Computers can’t Express their Ideas

In any type of research ideas plays a vital role. In this context, computers can’t express their ideas.

6.Computers can’t Implement

Though computers are helpful in storage of data and can contain the contents of encyclopedias

even, but only humans can decide and implement the policies.


Elements of a Computer System: A computer system is a set of six elements viz.:

(i) Hardware,

(ii) Software,

(iii) People,

(iv) Procedures,

(v) Data and

(vi) Connectivity.

(i) Hardware:

The physical components of a computer constitute its Hardware. These include keyboard, mouse,

monitor and processor. Hardware consists of input devices and output devices that make a

complete computer system.

Examples of input devices are keyboard, optical scanner, mouse and joystick which are used to feed

data into the computer. Output devices such as monitor and printer are media to get the output

from the computer.

(ii) Software:

A set of programs that form an interface between the hardware and the user of a computer system

are referred to as Software.

They are of six types:

(a) System software:

A set of programs to control the internal operations such as reading data from input devices, giving

results to output devices and ensuring proper functioning of components is called system software.

(b) Application software:

Programs designed by the user to perform a specific function, such as accounting software, payroll

software etc.

(c) Operating system:

A set of tools and programs to manage the overall working of a computer using a defined set of

hardware components is called an operating system. It is the interface between the user and the

computer system.

SUBODH PUBLIC SCHOOL,RAMBAGH CROSSING Chapter 12-Introduction to Computers Certain special purpose programs that are designed to perform a specialized task, such as functions

to copy, cut or paste files in a computer, formatting a disk etc.

(e) Language processors:

Special software to accept data and interpret it in the form of Machine /Assembly language

understandable by a computer. It also ensures the correctness of language syntax and errors.

(f) Connectivity software:

A set of programs and instructions to connect the computer with the main server to enable sharing

of resources and information with the server and other connected computers.

(iii) People: The most important element of a computer system is its users. They are also called live-ware of the

computer system.

The following types of people interact with a computer system:

(a) System Analysts:

People who design the operation and processing of the system.

(b) System Programmers:

People who write codes and programs to implement the working of the system

(c) System Operators:

People who operate the system and use it for different purposes. Also called the end users.

(iv) Procedures:

Procedure is a step by step series of instructions to perform a specific function and achieve desired

output.


In a computer system, there are three types of procedures:

(a) Hardware oriented procedure:

It defines the working of a hardware component.

(b) Software oriented procedure:

It is a set of detailed instructions for using the software.

(c) Internal procedure:

It maintains the overall internal working of each part of a computer system by directing the flow of

information.

(v) Data:

The facts and figures that are fed into a computer for further processing are called data. Data is raw

until the computer system interprets it using machine language, stores it in memory, classifies it for

processing and produces results in conformance with the instructions given to it. Processed and

useful data is called information which is used for decision making.

(vi) Connectivity:

When two or more computers are connected to each other, they can share information and

resources such as sharing of files (data/music etc.), sharing of printer, sharing of facilities like the

internet etc. This sharing is possible using wires, cables, satellite, infra-red, Bluetooth, microwave

transmission etc.

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