Journal Entry: Long Answer Question Service Firm (Problem and Solution)

Arjun EP

Published on: October 1, 2020

How to make journal entries for long answer question of service firm

Journal entries long answer question is the comprehensive question and solution.

It is the summary of entire chapter of the journal entry.

It is designed for deep knowledge.

It is the base for ledger accounts and trial balance.

PROBLEM: 22

Manoj Sharma started AutoCAD consulting firm called MS AutoCAD Services; he has following transactions:

1: Cash contributed Rs 3,00,000 as capital.

2: Office equipment purchased on credit Rs 160,000.

3: Purchased motor bike for Rs 1,90,000; paying Rs 90,000 in cash and signing a loan agreement for the rest.

4: Paid Rs 6,000 for insurance of office assets.

5: Office supplies purchased on credit Rs 7,000.

6: Completed an AutoCAD assignment and received Rs 14,000 cash.

7: Received advance from a customer for assignment to be completed in August Rs 4,000

8: Invoiced a client for services completed Rs 12,000.

9: Cash paid of office equipment Rs 60,000.

10: Utility bills paid Rs 3,250.

Required: Journalise the above transactions by using accounting code and ledger folio number.

Account codes:

*Invoiced = account receivable

Journal Entries

In MS AutoCAD Services

Date	Particulars		A/c	LF	Debit	Credit
			Code	No.	Amount	Amount
	Cash account	Dr	100	2	300,000
July 1	To Capital account		300	1		300,000
	(Being- business started with cash)
2	Office equipment	Dr	180	3	160,000
	To Accounts payable		200	4		160,000
	(Being- office equipment purchased on credit)
3	Motor Bike account	Dr	160	5	190,000
	To Cash account To Loan payable account		100 210	2 6		90,000 100,000
	(Being- bike purchase and partial payment paid)
5	Insurance	Dr	110	7	6,000
	To Cash		100	2		6,000
	(Being- insurance policy bought)
5	Office supplies account	Dr	120	8	7,000
	To Accounts payable		200	4		7,000
	(Being- office materials purchased on credit)
6	Cash account	Dr	100	2	14,000
	To Service revenue		400	9		14,000
	(Being- revenue received)
7	Cash account	Dr	100	2	4,000
	To Advance service revenue		220	10		4,000
	(Being- advance revenue received)
8	Accounts receivable account	Dr	130	11	12,000
	To Service revenue		400	9		12,000
	(Being- billing for services rendered)
	Account payable account	Dr	200	4	60,000
	To Cash account		100	2		60,000
	(Being: partial payment made for equipment)

	Utility bills account	Dr	500	12	3,250
	To Cash account		100	2		3,250
	(Being: utility bills paid)

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Click on link for YouTube videos topic wise :
Accounting Equation	http://tiny.cc/c89jkz
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger Account	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance and Adjusted Trial Balance	http://tiny.cc/c59jkz
Bank Reconciliation Statement (BRS)	http://tiny.cc/q59jkz
Depreciation	http://tiny.cc/ugakkz
Click on link for YouTube videos chapter wise:
Financial Accounting and Analysis (All videos)	http://tiny.cc/jlersz
Accounting Process	http://tiny.cc/mlersz
Accounting for Long Lived Assets	http://tiny.cc/plersz
Analysis of Financial Statement	http://tiny.cc/slersz