Page 122 - Office Practice and Accounting -9

Here goods given as free sample refers to the expenses of business firm and should be
debited to advertisement account and purchase is credited because there is decrease
in purchased goods.

Illustrations:
1. Journalize the following transactions.
2071 Mangsir 1 Commenced a business with capital of Rs. 120000 in
cash and computer of Rs. 30,000.
2071 Mangsir 3 Sold goods to Anish Rs. 2,000.
2071 Mangsir 4 Arun, who owned Rs. 1,000 became insolvent and his
acoount written off as bad debt
2071 Mangsir 5 Received from Anish Rs. 1,800 in full settlement
2071 Mangsir 7 Goods distributed as free sample Rs. 1,000
2071 Mangsir 8 Old furniture sold for cash Rs. 1,500
2071 Mangsir 9 Purchased goods for Rs. 10,000 from Suresh and made
partial payment of Rs. 6,000 only
2071 Mangsir 10 Received Rs. 1,000 from Ram which was earlier written
off as bad debt
Solution:

Date Particulars LF Debit (Rs.) Credit (Rs.)
Mangsir 1 Cash A/c................................................Dr. 1,50,000
To Capital A/c 120000
To Machinery A/c 30,000
(Being business started with cash & computer)
Mangsir 3 Anish A/c................................................Dr. 2,000
To Sales A/c 2,000
(Being goods sold to Anish)
Mangsir 4 Cash A/c ................................................ Dr. 500
Bad debts A/c..........................................Dr. 500
To Arun A/c 1,000
(Being 50 paisa in a rupee realized from Arun and
balance written off as bad debt)
Mangsir 5 Cash A/c................................................Dr. 1,800
Discount A/c.........................................Dr. 200
To Anish A/c 2,000
(Being cash received from Anish in full settlement)
Mangsir 7 Advertisement A/c................................................Dr. 1,000
To Goods A/c 1,000
(Being goods distributed for free sample)

118 Office Practice and Accounting 9