Journal proper refer to the special types of journals which occur occasionally.
These are also known by subsidiary journals.
There are certain types of transactions which are not recorded in other subsidiary books but for the systematic recording.
Systematic recording of all such transactions are made under journal proper by following rules of double entry system of book-keeping.
Some examples of such transactions can be given as below:
Opening entries
Closing entries
Transfer entries
Adjustment entries (outstanding, prepaid, accrued, advance income)
Rectification entries
No special journal (free sample, loss by fire etc)
Rare transaction
Prepaid means paid in advance.
Sometime a person or business organization has to pay amount in advance to complete or get complete the work.
It is also called as un-expired costs, which typically expire or get used up in the near future.
Some examples are prepaid rent, prepaid insurance and prepaid salaries etc.
Expenses paid for the future period are treated as current asset or advance till expenses incurred.
It is deducted from related entry and is shown in assets side of balance sheet.
PROBLEM: 6A
BKB Impex has following extracted data:
Office rent paid Rs 36,000. Out of this, Rs 6,000 was for advance.
Required: (1) Journal entry; (2) Show in profit and loss account and balance sheet
Journal Entry
Journal Entry
In the book of BKB Impex
Date |
Particulars |
|
LF |
Amount |
Amount |
|
Rent account Advance rent account To Cash account (Being- rent paid and paid in advance) |
Dr
|
|
30,000 6,000
|
36,000
|
Profit and Loss Account
Particulars |
|
Amount |
Particulars |
Amount |
To Rent Less: Advance
|
36,000 (6,000) |
30,000 |
|
|
Balance Sheet
Liabilities |
Amount |
Assets |
|
Amount |
|
|
Current assets: Advance rent
|
|
6,000 |
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PROBLEM: 6B
You have these extracted data:
Out of advance commission paid of Rs 50,000 expired this year Rs 30,000.
Required: (1) Journal entry; (2) Show in profit and loss account and balance sheet
Journal Entries
Date |
Particulars |
|
LF |
Amount |
Amount |
|
Advance commission expired account To Advance commission account (Being- advance commission expired) |
Dr
|
|
30,000
|
30,000
|
Profit and Loss Account
Particulars |
|
Amount |
Particulars |
Amount |
To Advance commission expired |
|
30,000 |
|
|
Balance Sheet
Liabilities |
Amount |
Assets |
|
Amount |
|
|
Loan and advance: Advance commission Less: Expired
|
50,000 (30,000) |
20,000 |
###########
PROBLEMS AND ANSWERS |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු =
Basic Problem: 6 PREPAID EXPENSES
The following transaction is given you by BC Furniture House:
1 March: Rent paid in advance Rs 15,000.
10 March: Advertisement paid in advance Rs 8,000 by cheque.
22 March: Prepaid wages Rs 10,000.
28 March: Salary paid Rs 45,000; out of salary paid Rs 5,000 is in advance.
31 March: Insurance paid Rs 7,000 by cheque in which Rs 2,000 is advance.
Required: Journal entries
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