TRANSACTION

 For every accounting Transaction following 3 conditions should be satisfied.

1. The Transaction should have money base.

2. It should be happened in past.

3. There should be documentary evidence.

For e.g.

1. Cash Rs.500/- paid to Mr. Ganesh. → It is a Transaction

2. Salary Rs.10, 000/- paid to Mr. Ram. → It is a Transaction

3. Cash Rs. 1,000/-deposited in bank. → It is a Transaction

4. Cash Rs.5, 000/- receivable from Dilip. → It is Not a Transaction

5. Mr. Samir promises to pay Rs. 2,000/- → It is Not a Transaction

6. Withdrew Rs.500/-from Bank. → It is a Transaction

7. Lost Rs. 100/- → It is a Transaction

8. An application received for the post of clerk. → It is not a Transaction

9. Goods of Rs.500/- sold to Mr.Anand. → It is a Transaction

10. Scooter of Rs.15,000/- purchased → It is a Transaction

11. Mr.Anil agrees to pay donation of Rs. 10,000/- → It is not a Transaction.

12. Furniture of Rs.5, 000/- enchased for goods of like amount. → It is a Transaction

Page 1 101 – Managerial Accounting (MBA SEM - I)

 TWO-FOLD EFFECTS
For every Accounting transaction there must be at least 2 effects
1. The Receiver of the benefit.

2. Giver of the benefit.

For e.g.

1. Mr. Ganesh paid Rs. 5,000/- to Mr. Naresh.

Mr.Naresh’s A/c → Receiver of Benefit Mr.Ganesh’s A/c→ Giver of Benefit

2. Mr.Anil Deposited Rs. 5,000/- in to the Bank.

Bank’s A/c → Receiver of Benefit Mr. Anil’s A/c → Giver of Benefit

3. Mr.A paid Rs. 1,000/- to Mr. B and Rs.500/- to Mr. C

Mr.B and Mr. C’s A/c → Receiver of Benefit Mr. A’s A/c → Giver of Benefit

4. Mr.Mahesh withdrew Rs.5, 000/- from bank.

Mr.Mahesh’s A/c → Receiver of benefit Bank’s A/c → Giver of benefit

5. Mr.Suresh agreed to pay Rs. 1,000/- to Mr. Naresh.

It is not a Transaction.

6. Mr.Ajay deposited Rs.2, 000/- in post office.

Post office A/c → Receiver of benefit Mr.Ajay’s A/c → Giver of benefit

7. Motorcar of Rs. 1,00,000/- sold to Mr.Ajit

M.Ajit’s A/c → Receiver of benefit Motorcar A/c→ Giver of benefit

Page 2 101 – Managerial Accounting (MBA SEM - I)

 CLASSIFICATION OF ACCOUNTS

PERSONAL IMPERSONAL
A/C’S A/C’S

INDIVIDUAL REAL A/C

REPRESENTATIVE NOMINAL A/C

PERSON

1. PERSONAL ACCOUNT: - Personal accounts are the accounts of persons, firms,

companies, institutions etc. are called as personal account.

2. REAL ACCOUNTS: - Accounts relating to proprieties, assets or possessions of

businessman are called as, Real A/c’s.

3. NOMINAL ACCONTS: - The Accounts related to expenses & losses and Incomes and
Gains (profit) are called as Nominal Account.

 RULES OF BOOK-KEEPING (JOURNALIZING)

1. Personal Account: Debit – The Receiver.

Credit – The Giver.

2. Real Account : Debit – What Comes In.

Credit – What Goes Out.

3. Nominal Account: Debit – The Expenses and Losses.

Credit – The Incomes and Gains.

Page 3 101 – Managerial Accounting (MBA SEM - I)

CLASSIFY THE FOLLOWIG ACCOUNTS INTO PERSONAL, REAL
AND NOMINAL ACCOUNTS.
1. Goods A/c Real A/c 24 Sales Tax A/c Nominal A/c

2. Salary A/c Nominal A/c 25 Audit Fees A/c Nominal A/c

3. Rent A/c Nominal A/c 26 Black Board A/c Real A/c

4. Pune Bank A/c Personal A/c 27 Books A/c Real A/c

5. Cash A/c Real A/c 28 Capital A/c Personal A/c

6. Furniture A/c Real A/c 29 Drawings A/c Personal A/c

7. Mr. Vijay’s A/c Personal A/c 30 Bank Loan A/c Personal A/c

8. Carriage A/c Nominal A/c 31 Interest A/c Nominal A/c

9. Machinery A/c Real A/c 32 Investment A/c Real A/c

10. Stock A/c Real A/c 33 Bank Deposit A/c Real A/c

11. Building A/c Real A/c 34 Dividend A/c Nominal A/c

12. LIC A/c Personal A/c 35 Discount A/c Nominal A/c

13. Insurance A/c Nominal A/c 36 Printing And Stationery A/c Nominal A/c

14. Tata Company A/c Personal A/c 37 Bad debts A/c Nominal A/c

15. Telephone Expenses A/c Nominal A/c 38 Travelling Expenses A/c Nominal A/c

16. Land A/c Real A/c 39 Gold A/c Real A/c

17. Nestle Company A/c Personal A/c 40 Advertisement A/c Nominal A/c

18. Loss By Fire A/c Nominal A/c 41 Loss in Transit A/c Nominal A/c

19. Tables & Chairs A/c Real A/c 42 Mr. Ganesh A/c Personal A/c

20. Tea & Other expenses A/c Nominal A/c 43 Transport Co. A/c Personal A/c

21. Octroi A/c Nominal A/c 44 Scooter’s A/c Real A/c

22. Motor Car A/c Real A/c 45 Petrol Expenses A/c Nominal A/c

23. Postage and Telephone A/c Nominal A/c 46 Commission A/c Nominal A/c

Page 4 101 – Managerial Accounting (MBA SEM - I)

 FROM (FORMAT) OF JOURNAL

LEDGER DEBIT CREDIT

DATE PARTICULARS FOLIO RS PAISE RS PAISE

TOTAL RS.

FROM (FORMAT) OF LEDGER

LEDGER
DR NAME OF THE ACCOUNT CR
DATE PARTICULARS J.F AMOUNT DATE PARTICULARS J.F AMOUNT

Page 5 101 – Managerial Accounting (MBA SEM - I)

 TRANSACTIONS

1. Commenced business with cash Rs. 8000/-

2. Goods of Rs. 2000/- purchased from Mr. Patil.

3. Goods of Rs. 3000/- sold for cash.

4. Cash Rs. 1000/- deposited in bank to open a bank account.

5. Purchased furniture of Rs. 7000/- from Mr. Prakash.

6. Cash Rs.5000/- paid to Mr. Patil.

7. Paid Salary Rs. 5000/- in Cash.

8. Rent of Rs. 7000/- paid in Cash.

9. Wages Rs. 1000/- Paid in Cash.

10. Commission of Rs. 200/- received in Cash.

11. Cash Rs. 2000/- withdrawn from Bank.

12. Goods of Rs. 400/- used for private use.

13. Private income Rs. 1000/- received & it is brought into business.

14. Insurance Rs. 400/- paid in Cash.

15. Life insurance premium Rs. 5000/- paid.

16. Rent Rs.200/-and Salary Rs. 500/- paid in Cash.

17. Cash Rs. 500/- received from Mr. Ram and Rs.1000/- from Mr. Sham.

18. Goods of Rs.6000/- sold to Mr. Ganesh.

19. Goods of Rs. 10000/- purchased from Mr. Anand.

20. Machinery of Rs. 50000/- purchased from Mr. Dilip.

21. Salary Rs.5000/- paid to Mr. Patil.

22. Interest of Rs. 5000/- received from a company.

23. Furniture of Rs. 4000/- sold to Mr. Vijay at Rs.4500/-

24. Machinery of Rs. 4000/- sold to Mr. Sanjay at Rs. 3800/-

25. Motorcar of Rs. 10,000/- sold for Rs. 8000/-.

Page 6 101 – Managerial Accounting (MBA SEM - I)

Date Particulars L. Debit Rs Credit Rs.
F
1 Cash A/c --------------------------------Dr 8000 --------------------
To Capital A/c -------------------- 8000
(Being commenced business with cash)

2 Goods A/c ------------------------------Dr 2000 --------------------

To Mr. Patil’s A/c ------------------- 2000
(Being purchased goods)

3 Cash A/c---------------------------------Dr 3000 -------------------

To Goods A/c ------------------ 3000
(Being Sold Goods)

4 Bank A/c --------------------------------Dr 1000 ----------------

To Cash A/c ---------------- 1000
(Being deposited cash for open account)

5 Furniture A/c-----------------------------Dr 7000

To Mr.Prakash’ s A/c 7000
(Being purchased furniture)

Date Particulars L. Debit Rs Credit Rs.

F
6 Mr. Patil’s A/c---------------------------Dr 5000 --------------
To Cash A/c --------------- 5000
(Being cash paid)

7 Salary A/c---------------------------------Dr 5000

To Cash A/c 5000
(Being salary paid)

8 Rent A/c-----------------------------------Dr 7000

To Cash A/c 7000
(Being Rent paid)

9 Wages A/c--------------------------------Dr 1000

To Cash A/c 1000
(Being Wages Paid)

10 Cash A/c----------------------------------Dr 200

To Commission A/c 200
(Being commission received)

Page 7 101 – Managerial Accounting (MBA SEM - I)

Date Particulars L. Debit Rs Credit Rs.
F
11 Cash A/c----------------------------------Dr 2000
To Bank A/c 2000
(Being Cash withdrawn)

12 Drawing’s A/c----------------------------Dr 400

To Goods A/c 400
(Being goods used for private use)

13 Cash A/c----------------------------------Dr 1000

To Capital A/c 1000
(Being private income brought)

14 Insurance A/c----------------------------Dr 400

To Cash A/c 400
(Being expenses paid)

15 Drawings A/c----------------------------Dr 5000

To Cash A/c 5000
(Being LIC premium paid)

Date Particulars L. Debit Rs Credit Rs.

F
16 Rent A/c-----------------------------------Dr 200
Salary A/c---------------------------------Dr 500
To Cash A/c 700
(Being cash paid for rent and salary)
17 Cash A/c----------------------------------Dr 500
To Mr. Ram’s A/c 1000
To Mr. Sham's A/c 1500
(Being received cash)
18 Mr. Ganesh A/c--------------------------Dr 6000
To Goods a/c 6000
(Being Sold goods)

19 Goods A/c--------------------------------Dr 10000

To Mr. Anand A/c 10000
(Being purchased goods)

20 Machinery A/c---------------------------Dr 50000

To Mr. Dilip’s A/c 50000
(Being Machinery purchased)
Page 8 101 – Managerial Accounting (MBA SEM - I)
Date Particulars L. Debit Rs Credit Rs.
F
21 Salary A/c-------------------------------Dr 5000
To Cash A/c 5000
(Being paid expenses)
22 Cash A/c----------------------------------Dr 5000
To Interest A/c 5000
(Being interest Received)
23 Mr.Vijay,s A/c---------------------------Dr 4500
To furniture A/c 4000
To Profit on Sale A/c 500
(Being Sold Asset at profit)
24 Mr.Sanjay,s A/c-----------------------Dr 3800
Loss on sale A/c-----------------------Dr 200
To Machinery A/c 4000
(Being Machinery at loss)
25 Cash A/c--------------------------------Dr 8000
Loss on Sale A/c-----------------------Dr 2000
To Motorcar A/c 10000
(Being Motorcar sold at loss)

Page 9 101 – Managerial Accounting (MBA SEM - I)