Topic: 4. Journal

By Mr. Srinivas M.

Chapter Objectives: After completion of this chapter you should be

conversant with: Sources of documents Meaning and Importance of Journal Utility of journal. Specimen of Journal How to journalize the transactions Exercises

Sources of documents Introduction Different sources of documents:

1) Cash Memo2) Invoice or Bill3) Receipt4) Pay in slip5) Cheque6) Debit or Credit Note

What do you know about Journal ?

Meaning of Journal The word ‘Journal’ derived from French word

‘Jour’ which means a day. Therefore Journal means a ‘daily record’ Journal is a book of original entry or first entry

or primary entry.

Definition of Journal Definition: “ A journal is a book, employed to

classify or sort out transactions in a convenient for their subsequent entry in the ledger” – L C Cropper.

Specimen of JournalDate

Particulars Ledger

Folio (L.F.)

Debit Amount in Rs.

Credit Amount in Rs.

Name of the account to be debited Dr. To name of the account to be credited(Narration:_________________________)

Journalizing The process of recording of transaction in a

Journal is called 'Journalizing’ The record of a business transaction in a

journal is known as a ‘Journal entry’ Steps for journalizing:

Importance of Journal and Utility of Journali. It eliminates the need for a reliance on memoryii. It provides a chronological recordiii. It provides the information of debit and credit of a

transaction.iv. It reduces the possibility of error.v. Journal provides information relating to the

following aspects:a) Credit sales, purchases of fixed assets, investments,

goods or anything else not dealt in by the firm.b) Receipt of issue of bills of exchange, promissory notes,

hundies, cheques and other financial instruments.c) Income earned but not received in cash and expenses

incurred but not paid.

1) Journalize the following transactions in the books of Shri. Krishna2015 April 1

Krishna started business with cash of Rs. 25,00,000

2 Purchased goods for cash from Akash of Rs. 5,00,0002 Deposited cash into bank of Rs. 10,00,0005 Purchased goods from Raj enterprises Rs. 3,00,0006 Sold goods for cash Rs. 8,00,00010 Sold goods to Rekha on credit Rs. 2,00,00015 Cash paid to Raj enterprises 3,00,000

Enter the following transactions in Journal for the month of January, 2014. Jan. 1 Sushil & Co. started business with cash 1,00,000 Jan. 2 Paid into Bank 60,000 Jan. 4 Purchased Machinery and paid by cheque 30,000 Jan. 6 Bought goods from Naresh 20,000 Jan. 14 Paid salaries 5,000 Jan. 15 Sold goods to Rajesh Kumar 15,000 Jan. 17 Paid for Sundry Expenses 8,500 Jan. 18 Cash deposited into Bank 20,000 Jan. 19 Received Rent 6,000 Jan. 22 Paid Naresh by cheque in full settlement of his A/c 19,750 Jan. 24 Withdrawn cash for personal use 8,000 Jan. 26 Salary paid in advance to Surjeet 2,500 Jan. 28 Rajesh made the payment on A/c 10,000 Jan. 30 Cash Sales for the month 16,500

2) Journalise the following transactions in the books of Ram for the month of March 2010. March 1 Mr. Sriram commenced business with cash Rs.

60,000. 2 Purchased furniture for Rs. 5,000. 4 Purchased goods for cash Rs. 2,000. 7 Bought goods from M/s. Raj & Co. for Rs. 4,000. 10 Sold goods costing Rs. 3,000 on cash. 15 Purchased stationery for office use Rs. 1,000. 19 Received cash Rs. 1,250 from Mr. Ketan in full

settlement of his account for Rs. 1,500. 20 Paid salaries by cheque Rs. 1,500. 25 Introduced additional capital Rs. 20,000. 27 Paid to Raj Rs. 3,250 in full settlement of Rs. 3,500 29 Sold goods for Rs. 15,000 to Mr. Dohi. 31 Deposited Rs. 3,000 into the Bank.

3) Journalise the following transactions in the books of Mr. Shiva for the month of April 2010. April 1 Started business with cash Rs. 25,000/- 2 Purchased goods worth Rs. 10,000/- 4 Deposited cash Rs. 3,000 into the Bank. 6 Purchased goods of Rs. 6,000 from M/s. Raju Trading

Company. 9 Sold goods to Mr. Ramesh for Rs. 3,000. 12 Paid to M/s. Raju Trading Company Rs. 3,000. 15 Received Rs. 1,000 from Mr. Ramesh. 20 Paid salaries Rs. 1,000/- and paid commission Rs.

1,600/- in cash. 25 Bought stationery for office use Rs. 300. 27 Withdrew Rs. 2,500 from business for personal use. 29 Withdrew Rs. 4,000 from bank for office use.

4) Journalise the following transactions in the journal of Mr. Anand for the month of February, 2010. Feb 1 Borrowed from Bank @ 15% interest Rs.

20,000. 3 Purchased goods from Mr. Sam for Rs. 3,500. 4 Paid carriage and cartage Rs. 250 7 Sold goods on cash Rs. 3,000. 10 Paid Rs. 2,250 to Mr. Sam. 15 Purchased office furniture for Rs. 6,000. 18 Paid interest Rs. 450/- to Mr. Bank. 20 Paid salaries Rs. 6,000. 22 Cash sales Rs. 20,000. 26 Cash purchases Rs. 15,000 28 Paid Rs. 2,000 to Bank in part payment of loan.

5) Journalise the following transactions in the books of Mr. Vishal for the month of March, 2010. Mar. 1 Vishal started business with cash Rs. 35,000, goods worth Rs.

10,000. 2 Opened bank account in the Bank of India by depositing Rs. 5,000. 4 Bought goods worth Rs. 6,000 @ 10% trade discount term. 7 Sold goods worth Rs. 3,000 9 Purchased furniture of Rs. 4,000 for office use and furniture of Rs.

1,000 for home use. 14 Withdrawn goods of Rs. 1,000 for self use. 17 Received Rs. 2,400 from Mr. Ravindra in full settlement of Rs.

2,450. 19 Paid salaries Rs. 500 to office clerk and paid electricity bill of Rs.

750 in cash. 24 Paid Mr. Raj Rs. 1,960 in full settlement of Rs. 2,000. 26 Paid insurance premium of Rs. 1,200 on the life of Mr. Vishal, a

proprietor. 29 Cash sales Rs. 3,000. 30 Withdrew Rs. 4,000 from bank for office use.

6)Draft journal entries for the business transactions given below. Apr. 1 Mr. Ram started business with cash Rs. 5,000/-, goods

Rs. 7,500 and furniture Rs. 2,500/- 3 Purchased goods worth Rs. 4,500 from Mr. Karan. 5 Cash sales Rs. 6,000 8 Purchased stationery for office use Rs. 500. 10 Paid to Mr. Karan Rs. 4,350 in full settlement of Rs. 4,500. 13 Deposited Rs. 1,000 into the Bank. 16 Received Rs. 500 from Mr. Kiran. 19 Withdrawn Rs. 200 from business for self use. 23 Paid Rs. 150 for commission and paid Rs. 450 for rent. 27 Paid wages Rs. 600 in cash, and paid sundry expenses

Rs. 200/- by cheque. 29 Borrowed Rs. 5,000 from wife for business purpose. 30 Cash purchases Rs. 1,000.

Have nice day and happy learning