Diverse Business Transactions Journal Entries
(i) Employees had taken stock worth
20,000 (Cost price
15,000) on the eve of Deepawali and the same was deducted from their salaries in the subsequent month.Stock taken by employees:
- Debit: Salary Advance Account
20,000
- Credit: Sales Account
20,000
- Debit: Cost of Goods Sold Account
15,000
- Credit: Inventory Account
15,000
Deduction from salaries:
- Debit: Salaries Account
20,000
- Credit: Salary Advance Account
20,000
- Debit: Salary Advance Account
(ii) Wages paid for erection of Machinery ` 16,000.
Wages paid for machinery erection:
- Debit: Machinery Account
16,000
- Credit: Cash/Bank Account
16,000
- Debit: Machinery Account
(iii) Income tax liability of proprietor ` 3,400 was paid out of petty cash.
Income tax paid from petty cash:
- Debit: Drawings Account
3,400
- Credit: Petty Cash Account
3,400
- Debit: Drawings Account
(iv) Purchase of goods from Naveen of the list price of
4,000. He allowed 10% trade discount,
100 cash discount was also allowed for quick payment.- Purchase of goods:
- Debit: Purchases Account
3,600
- Credit: Naveen Account
3,600
- Payment:
- Debit: Naveen Account
3,600
- Credit: Cash/Bank Account
3,500
- Credit: Discount Received Account
100
- Debit: Naveen Account
- Payment: