In accounting, debit balance is the part of assets like cash, debtor, stock (inventory, goods and merchandise) and fixed assets.
Generally, debit balance is debtor in ledger account.
It occurs when the total debits in an individual account are greater than the credits in that account.
When debtor is familiar and loyal to firm, goods are sold on credit; debtor pays due amount frequently; again goods sold on credit; again cash receives from him.
This, activities goes on throughout the year.
At the end of an accounting period, once debtor’s account is closed.
At the time of account close, there may be discount allowed.
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 5
The following extracted transactions are given by ML Traders:
June 1: Neema is debtor and she has balance Rs 35,000 and cash balance Rs 5,000.
June 5: Goods sold to Neema Rs 50,000 and cash received Rs 15,000 as partial payment.
June 10: Goods returned by Neema worth Rs 7,000 due to defective goods.
June 22: Cash received from Neema Rs 18,000.
June 30: Neema settled her account after 5% discount.
Required: (1) Journalise entries; (2) Neema’s account; (3) Cash account
[Answer: Cash received from Neema = Rs 47,250; Cash balance = Rs 80,750]
SOLUTION:
Journal Entries
In the book of ML Traders
Date |
Particulars |
|
LF |
Amount Dr |
Amount Cr |
June, 5 |
Cash account |
Dr |
|
15,000 |
|
|
Neema’s account |
Dr |
|
35,000 |
|
|
To Sales |
|
|
|
50,000 |
|
(Being- goods sold in cash and credit) |
|
|
|
|
June, 10 |
Sales return account |
Dr |
|
7,000 |
|
|
To Neema’s account |
|
|
|
7,000 |
|
(Being- sales returned by Neema) |
|
|
|
|
June, 22 |
Cash account |
Dr |
|
18,000 |
|
|
To Neema’s account |
|
|
|
18,000 |
|
(Being- cash received from Neema) |
|
|
|
|
June, 30 |
Cash account |
Dr |
|
42,750 |
|
|
Discount allowed account |
Dr |
|
2,250 |
|
|
To Neema’s account |
|
|
|
45,000 |
|
(Being- cash received and discount allowed) |
|
|
|
|
|
|
|
|
|
|
Dr |
Neema’s Account |
|
Cr |
||||
Date |
Particulars |
JF |
Amount |
Date |
Particulars |
JF |
Amount |
Jun 1 |
To Balance b/d |
|
35,000 |
Jun 10 |
By Sales return account |
|
7,000 |
Jun 5 |
To Sales account |
|
35,000 |
Jun 22 |
By Cash account |
|
18,000 |
|
|
|
|
Jun 30 |
By Discount |
|
2,250 |
|
|
|
|
Jun 30 |
By Cash account |
|
42,750 |
|
|
|
70,000 |
|
|
|
70,000 |
.
Dr |
Cash Account |
|
Cr |
||||
Date |
Particulars |
JF |
Amount |
Date |
Particulars |
JF |
Amount |
Jun 1 |
To Balance b/d |
|
5,000 |
Jun 30 |
By Balance c/d |
|
80,750 |
Jun 5 |
To Sales account |
|
15,000 |
|
|
|
|
Jun 22 |
To Neema’s account |
|
18,000 |
|
|
|
|
Jun 30 |
To Neema’s account |
|
42,750 |
|
|
|
|
|
|
|
80,750 |
|
|
|
80,750 |
#######
Click on link for YouTube videos topic wise : |
|
Accounting Equation |
|
Basic Journal Entries in Nepali |
|
Basic Journal Entries |
|
Journal Entry and Ledger |
|
Ledger Account |
|
Subsidiary Book |
|
Cash Book |
|
Trial Balance and Adjusted Trial Balance |
|
Bank Reconciliation Statement (BRS) |
|
Depreciation |
|
Click on link for YouTube videos chapter wise: |
|
Financial Accounting and Analysis (All videos) |
|
Accounting Process |
|
Accounting for Long Lived Assets |
|
Analysis of Financial Statement |
#######
PROBLEMS AND ANSWERS |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
Problem: 5A Basic Problem 5
Following extracted information is given by YB Traders:
July 1: Debit balance of Manisha Rs 4,000.
July 9: Goods sold to Manisha Rs 12,000.
July 12: Goods sold to Manisha in cash Rs 6,000.
July 15: Cash received from Manisha Rs 9,500 and discount allowed Rs 500.
July 22: Goods returned by Manisha Rs 500.
Required: Sales account and Manisha’s account
[Answer: Balance: Sales = 18,000; Manisha = 5,500]
Problem: 5B Basic Problem 6
Following extracted information is given by YK Traders:
June 1: Debit balance of Rahul Rs 10,000.
June 2: Goods sold to Rahul Rs 30,000.
June 3: Goods sold to Rahul and cheque received Rs 10,000.
June 5: Goods returned by Rahul Rs 2,000.
June 7: Cash received from Rahul in full settlement Rs 37,000.
Required: Sales account and Rahul’s account
[Answer: Sales balance = 40,000; Discount allowed = 1,000]
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