Standard Answer script

Standard Answer script

Standard Answer script
Standard Answer script
Standard Answer script
Standard Answer script
Standard Answer script
 Journalizing
I. Journal treated as a first step of Accounting process it also called
recording system.
II. Journal is recording of transaction showing the effect of accounting
Equation in double entry system.
 Types of Journal
1. General Journal,
2. Opening Journal,
3. Rectification Journal,
4. Adjusting Journal,
5. Closing Journal,
6. Reversing Journal,
 Format of Journal Entry
Date/SL.No Account Titles & Explanation L.No Debit (tk) Credit (tk)
Introduce to Debit & Credit
 Accounts and its Type

• Types of Accounting
1. Assets/real/property Account,
2. Personal Accounting,
3. Revenue Accounting,
4. Expense Accounting,
 Assets/ Real Account
• Assets/real account indicate which of accounts/title of
accounts those right to received or receivable any future
benefit. Example of Assets Accounts- cash, Bank deposit,
property plat & equipment, Accounts receivable, Investment,
Prepaid expense, Inventory, Supply in hand, goodwill, Patten,
copy right etc.
• DR./CR. PROCEDURES FOR OWNER’S EQUITY
 Assets/real Accounts
If Assets increase,
Specific Assets Accounts like cash, bank, furniture, Dr.
land, machine, building, Accounts Receivable,
prepaid expanse, Investment, inventory, supply etc

Cash, bank, Account payable, unearned revenue, Cr.

etc.

If Assets decrease,
Cash, bank, Account receivable, etc. Dr.

Specific Assets Accounts like cash, bank, furniture, Cr.

land, machine, building, Accounts Receivable,
prepaid expanse, Investment, inventory, supply etc
 Assets/Real Accounts
• Purchase supply/inventory for tk 10,000.
• Purchase land/building/machine/equipment
for tk-1,00,000.
• Sold inventory at tk 5000.
• Sold inventory on account tk 5000.
• Received account receivable(A/R) tk 5000.
• House rent paid for 12 month tk 12,000.
• Investment in securities of IDLC for tk 8,000.
 Personal/liability Account
• Personal/liability account indicate which of the transaction or accounts title
that create liability of organization with other 3rd parties. It is liability section of
Accounting equation. Example of such account-
- purchase on account that create accounts payable,
- Accrued expanse that create current liability,
- loan receive from third party,
- Notes payable,
- unearned revenue etc.
 Personal/liability Account

If Liability increase
Cash , Bank, Goods, any other Assets Dr.

Accounts payable/sundry creditor, Notes payable, Loan, Cr.

Payable to any person, accrued liability, Unearned liability ,
Bank overdraft etc

If liability decrease
Accounts payable/sundry creditor, Notes payable, Loan, Dr.
Payable to any person, accrued liability, Unearned liability ,
Bank overdraft etc

Cash , Bank, Goods, any other Assets Cr.

 Personal/liability Account

• Purchase inventory on account tk 20,000.

• Salary/wages/rent/insurance/Advertisement /
interest/ any other expense accrued tk 10,000.
• Loan received from lanka bangla finance tk 1,00,000.
• Receive tk 50000 by issuing notes/bond.
• Receive tk 5000 as a advance of service.
 Revenue Account

• Revenue Accounts indicate which of transaction by those an

organization earned money that may received or receivable.
Revenue may earned from operating or Non operating
transaction. Example of revenue accounts-
- Sales goods in cash/on account.
- Service provide in cash/ on account.
- Earned interest/dividend,
- Profit from assets sold.
 Revenue Account

Earned/increase of Revenue

Dr.
Cash/bank/receivable of specific title of
Revenue.

Cr.
Specific title of Revenue (sales
revenue/service revenue/ rent revenue/
interest revenue/dividend revenue etc. )
 Revenue Account

• Example of Revenue Accounts-

i. Sales goods for tk 50,000 in cash/on account.
ii. Service revenue earned tk 10,000 in cash/on account.
iii. Interest revenue earned in cash tk 5,000, / interest revenue
earned but not receive tk 5,000.
iv. Operating asset sold at tk 20,000 which book value was tk
15,000.
v. Dividend receive from investment tk 2,000.
 Expanse Accounts

• Expanse accounts indicate which of transactions for

those incurred any amount or consume any amount
from prior cost as per matching principle. It is the
part of owners equity portion of accounting
equation. Example-
Salary/wages/Advertisement/rent/interest/
insurance/depreciation/amortization/commission
etc.
 Expanse Accounts

Incurred/increase Expanse

Specific title of Expense Dr.

(salary/wages/rent/advertisement/interes
t / depreciation etc)

Cash/ bank/ accrued expanse / specific Cr.

title of expanse payable.
 Expanse Accounts

• Example of Expanse Accounts-

i. Salary expense paid / accrued tk 10,000.
ii. Wages expense incurred tk 5,000.
iii. Insurance/ rent expense tk 10,000.
iv. Depreciation/amortization charge at tk 2,000.
v. Interest expanse for tk 4,000.
 .

Interval
 A comprehensive problem practice
• ABC corporation start its business on 1st January 2015 to carry following balances- cash
in hand tk 1,00,000 and at bank tk 50,000. loan from investment company tk 50,000 at
10% interest, Land for tk 80,000. Office building for tk 70,000. Equipment tk 40,000. the
following transaction occurred during the year
1st January- Purchase inventory on account for tk 30,000.
5th January -Purchase office supply in cash tk 10,000.
5th January- Paid advertisement expense tk 5,000 by bank,
7th January - Paid 1 year insurance tk 12,000.
10th January – Sales inventory tk 25,000 in which tk 15,000 received in cash & remaining
amount will at month ending.
15th January - Purchase Inventory in cash for tk 20,000.
16th January – cheque paid against accounts payable of 1st January.
20th January – Goods return to supplier for tk 3000, at same date goods return tk 2000 by
customer.
25th January- cash receive tk 9000 as a full settlement of 10,000 receivable of 10 th January.
27th January – deposit to bank tk 10,000.
30th January – cash withdrawn from Bank tk 20,000.
31st January – Paid salary tk 5000, utility bill tk 2000.
ABC corporation use periodical method of inventory calculation, depreciation calculation at
SLM 10% on office equipment , 5% on office Building.31st January supply in tk 2000.
 Requirements.
1. Prepare Journal entries in the book ABC corporation,
2. Prepare Adjusting entries on the date of 31st January
in the book of ABC corporation,
3. Prepare ledger of above accounts.
4. Prepare trial balance on the date of 31st January.
 ABC corporation
Journal Book
at 31st January 2015

Date Account title & explanation Ref Debit(tk) Credit(tk)

1st Cash account 1,00,000

January, Bank account 50,000
2015
Land account 80,000
Building account 70,000
Equipment account 40,000
Loan account 50,000
Owners capital 2,90,000
(being ABC corp. start its business carry above balances)

1st Purchase account 30,000

January. Accounts Payable 30,000
(being inventory purchase on account)
5th Office Supply account 10,000
January Cash account 10,000
( being office supply purchase in cash)
 Date Account title & explanation Ref Debit(tk) Credit(tk)
.

5th Advertisement Exp 5000

January Bank account 5000
(being advertisement expense paid by cheque)
7th Prepaid insurance 12,000
January Cash account 12,000
(being insurance bill paid for next 12 months)
10th Cash account 15,000
January Accounts receivable 10,000
Sales revenue 25,000
(being sales made in 15,000 cash 10,000 on
account)
15th Purchase account 20,000
January Cash account 20,000
16th Accounts payable 30,000
January Bank account 30,000
(being A/p paid by cheque tk 30000)
20th Accounts payable 3000
January Purchase return 3000
Sales return 2000
Accounts Receivable 2000
Date Account title & explanation Ref Debit(tk) Credit(tk)
25th Cash account 9,000
January
Discount exp 1000
Accounts Receivable 10,000
27th Bank account 10,000
January
Cash account 10,000
(being tk 10,000 deposit to bank
account)
30th Cash account 20,000
January
Bank account 20,000
(being tk 20000 withdrawn from bank)
31st Salary exp. 5000
January
Utility exp. 2000
Cash account 7000
Total amount 5,24000 5,24000
 Adjusting Journal
Date Account title & explanation Ref Debit(tk) Credit(tk
31st Depreciation exp on Building 292
January
Depreciation exp on equipment 333
Accumulated depreciation of Building 292
Accumulated depreciation of equipment 333
31st Supply expense 8000
January
Supply on hand 8000
(being supply on hand reduce to tk 2000)
31st Insurance Expanse 1000
January
Prepaid Insurance 1000
(being prepaid insurance tk 1000 expired for
current month)
31st Interest exp. 417
January
Interest payable 417
(being 1month interest charge on loan
Problem-1
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Problem-07