B.
Com (Hons) Introduction to Financial Accounting
UNIT – 2
WORK SHEET 1
ACCOUNTING EQUATION
1. Show the Accounting Equation on the basis of the following transactions and present a Balance
Sheet on the last new equation balance:
₹
(i) Raj commenced business with cash 70,000
(ii) Purchased goods on credit 14,000
(iii) Withdrew for Private use 1,700
(iv) Goods purchased for cash 10,000
(v) Paid wages 300
Paid to creditors
(vi) 10,000
Sold goods on credit for
(vii) 15,000
Sold goods for cash (cost price was Purchased motorcycle for
(viii) 4,000
cash ₹ 3,000)
(ix) 500
Purchased furniture for
2. Prepare an Accounting Equation on the basis of the following transactions:
(i) Started business with cash ₹ 70,000.
(ii) Credit purchase of goods ₹ 18,000.
(iii) Payment made to creditors in full settlement ₹ 17,500.
(iv) Purchase of machinery for cash ₹ 20,000.
(v) Depreciation on machinery ₹ 2,000.
2. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh.
(i) Commenced business with cash ₹ 60,000.
(ii) Paid rent in advance ₹ 500.
(iii) Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
(iv) Sold goods for cash ₹ 30,000 costing ₹ 20,000.
(v) Paid salary ₹ 500 and salary outstanding being ₹ 100.
(vi) Bought motorcycle for personal use ₹ 5,000.
1
PREPARATION OF JOURNAL ENTRIES AND LEDGER:
1. Journalise the following transactions. Prepare ledger and Trial Balance
Purchased goods for cash Rs. 10,000.
Purchased stationary for cash Rs. 500.
Purchased furniture for cash Rs. 3,000.
Sold goods for cash Rs. 8,000.
Sold goods to Jane for cash Rs. 3,000.
Sold goods to James Rs. 2,000.
Paid rent to Krishnan, the landlord Rs. 800.
Paid salary Rs. 8,000.
Paid Lokesh, The manager his salary Rs. 3,000.
Paid Freight on goods purchased Rs. 300.
Paid freight on machinery purchased Rs. 400.
Paid wages Rs. 500.
Paid wages to erect a machine Rs. 1,000.
Received Rs. 800 from Kamal.
Received Rs. 600 from Kamal as interest.
Received Rs. 7,000 from Kamal as loan at 5% interest.
2. Journalise the following transactions M/s. Radha & Sons. Prepare Ledger and Trial Balance
2024
Jan 1 Business started with Rs. 2,50,000 and cash deposited with bank, Rs. 1,50,000
3 Purchased machinery on credit from Rangan, Rs. 50,000
6 Bought furniture for Ramesh for cash, Rs. 25,000
12 Goods sold to Yesodha, Rs.22,500
13 Goods returned by Yesodha, Rs. 2,500
15 Goods sold for cash, Rs. 50,000
17 Bought goods for cash, Rs. 25,000
20 Cash received from Yesodha, Rs. 10,000
21 Cash paid to Ramola, Rs. 20,000
25 Cash withdrawn from Bank, Rs. 50,000
29 Paid advertisement expenses, Rs. 12,500
30 Bought office stationery for cash, Rs. 5000
31 Cash withdrawn from bank for personal use of the proprietor, Rs. 6,250
31 Paid salaries, Rs. 15,000
31 Paid rent, Rs. 2,500
3. Enter the following transactions in the Journal, Ledger and Prepare Trial Balance of Hari Prasad of
Hyderabad
2024
July 1 Commenced business with cash Rs. 1,80,000.
2
3 Deposited cash into bank Rs. 55,000
4 Purchased goods for cash Rs. 22,000
5 Bought goods of Swaminathan Rs. 72,000
8 cash sales Rs. 16,200
11 cash deposited into bank Rs. 23,000
14 purchased furniture for cash Rs. 4,000
16 sold goods to Vivek Rs. 12,700
17 Received cash from Vivek Rs. 12,446
Allowed him discount Rs. 254
18 paid Swaminathan cash Rs. 12,000
Discount allowed by him Rs. 240
20 paid wages Rs. 1,800
21 sold goods to Jagadesan Rs. 35,000
22 paid cash for trade expenses RS. 150
24 sold goods to Rajan Rs. 23,280
25 received from Jagadeesan Rs. 21,000
Allowed him discount Rs. 525
26 paid Swaminathan cash on account Rs. 24,000
28 sold goods for cash Rs. 9,000
29 paid cash for stationary Rs. 180
30 paid cash for miscellaneous expenses Rs. 150
31 bought goods from Sridhar Rs. 17,870
31 withdrew cash for private expenses Rs. 1,480
PREPARATION OF TRIAL BALANCE
1. The following balances were extracted from the ledger of Ramakrishna Engineering works on 31
March 2024 You are required to prepare a trial balance as on that date in proper form.
PARTICULARS AMOUNT
(Rs.)
Drawings 6000
Capital 24000
Sundry creditors 43000
Bills payable 4000
Sundry debtors 50000
Bills receivable 5200
Loan from karthik 10000
Furniture and fixture 4500
Opening stock 47000
Cash in hand 900
Cash at bank 12500
Tax 3500
Sales 128000
Salaries 9500
Sales returns 1000
3
Purchases returns 1100
Travelling expenses 4600
Commission paid 100
Trading expenses 2500
Discount earned 4000
Rent 2000
Bank od 6000
Purchases 70800
2. X of Karachi is not an expert in accounting. He prepared the following trial balance. You are requested
to correct it and prepare a corrected trial balance.
[Link] PARTICULARS DEBIT(Rs.) CREDIT(Rs.)
1. Capital - 15560
2. Sales - 27560
3. Sales returns - 980
4. Drawings 5640 -
5. Sundry debtors - 5300
6. Freehold premises 7410 -
7. Purchases 12680 -
8. Return outwards 2640 -
9. Loan from Sharma - 2500
10 Sundry creditors 5280 -
11. Administration expenses 7840 -
12. Cash in hand 1420 -
13. Bills payable 1000 -
14. Wages 5980 -
15. Opening stock - 2640
16. Factory expenses 4650 -
54540 54540
3. Prepare Trial balance:
PARTICULARS RS.
Opening stock 10600
Wages 2200
Carriage 200
Commission (dr) 300
Purchases 12000
Return inwards 440
Trade expenses 580
Rent 200
Plant 2600
Repairs to plant 460
Cash in hand 200
Cash at bank 1000
Debtors 3000
Income tax 500
Drawings 700
Return outwards 150
4
Sales 25200
Discount received 400
Capital 7000
Creditors 830
Loan (cr) 1400
