📘 CHAPTER 3: RECORDING OF TRANSACTIONS - I
(All previous years' questions – with answers)
1. A furniture merchant used 2 chairs for his office use, which was credited in
a) Purchases account b) Furniture account c) Office furniture account d) Drawings account
(2019 Imp – 1 Mark)
2. The process of recording transactions in journal is called as
a) Posting b) Balancing c) Journalizing d) Totaling
(2022 Mar – 1 Mark)
3. The book in which all accounts are maintained is known as
a) Journal b) Ledger c) Cash book d) Sales book
(2022 Imp – 1 Mark)
4. _______ is a collection of all the accounts debited or credited in journal or day books.
a) Journal b) Ledger c) Cash book d) Sales book
(2023 Mar – 1 Mark)
5. The process of entering transactions in a journal is called
a) Posting b) Balancing c) Journalising d) Trial balance
(2023 Mar – 1 Mark)
6. The principal book of account is
a) Journal b) Ledger c) Purchase Book d) Sales Book
(2023 Imp – 1 Mark)
7. Which of the following is correct?
a) Liabilities = Assets – Capital b) Assets = Liabilities – Capital c) Capital = Assets + Liabilities d) Capital = Liabilities – Assets
(2023 Imp – 1 Mark)
8. "Bought goods on credit". The effect of this transaction is :
a) Asset increases, Asset decreases b) Asset increases, Liability increases c) Asset increases, Liability decreases d) Asset decreases, Liability increases
(2025 Mar – 1 Mark)
9. Complete the following as per hint given
| Transaction | Effect on Business |
|---|---|
| a) Purchased goods for cash | Increase in asset Decrease in asset |
| b) Bought furniture on credit | …………?………… …………?………… |
| c) Bank loan repaid | …………?………… …………?………… |
(2019 Mar – 2 Marks)
10. Pass journal entries for the following transactions
a) Goods costing Rs.5,000 taken away from the business by the proprietor for his personal purpose
(2019 Mar – 2 Marks)
To Purchases A/c 5,000
(Being goods taken by proprietor for personal use).
11. Complete the table as per the hint.
| (a) Asset increases | Debit |
| (b) Income increases | ……………… |
| (c) Expenses increases | ……………… |
(2021 Mar – 2 Marks)
12. Complete the journal.
Cash A/c Dr. 50,000
To ...... 50,000 (Started business with cash)
...... Dr. 4,000
To Cash 4,000 (paid rent)
Cash A/c Dr. 20,000
To Sales 20,000 (......)
(2023 Mar – 2 Marks)
13. Pass Journal Entries for the following transactions :
(a) Goods taken by the proprietor for personal use Rs. 5,000.
(b) Withdraw cash from bank for office use Rs. 2,000.
(2023 Imp – 2 Marks)
(a) Drawings A/c Dr. 5,000 To Purchases A/c 5,000.
(b) Cash A/c Dr. 2,000 To Bank A/c 2,000.
14. Fill the table
| Hint: | Assets Increases | Debit |
| (a) Capital | ? | Credit |
| (b) Expenses | Decreases? | ? |
| (c) Income | ? | Credit |
| (d) Liabilities | ? | Decreases? |
(2024 Mar – 2 Marks)
15. Give journal entry for the given transaction of Arun Ltd. located in Palakkad. SGST - 9% CGST - 9%. Purchased Machinery Rs. 90,000 from Kannur for cash.
(2024 Mar – 2 Marks)
Machinery A/c Dr. 90,000
Input CGST A/c Dr. 8,100
Input SGST A/c Dr. 8,100
To Cash A/c 1,06,200.
16. Show the effect of following transactions on Assets, Liabilities and Capital based on accounting equation
a) Started business with cash Rs. 1,50,000
b) Rent received Rs. 5,000
c) Purchased goods on credit from Rema Rs. 2,000
d) Paid cash for household expenses Rs. 4,000
e) Sold goods for cash (cost Rs. 10,000) Rs.13,000
f) Deposited into bank Rs.25,000
(2018 Imp – 3 Marks)
a) A ↑1,50,000 (cash), C ↑1,50,000
b) A ↑5,000 (cash), C ↑5,000 (revenue)
c) A ↑2,000 (stock), L ↑2,000 (creditor)
d) A ↓4,000 (cash), C ↓4,000 (drawings)
e) A ↑13,000 (cash) – ↓10,000 (stock) → net A ↑3,000, C ↑3,000 (profit)
f) A ↓25,000 (cash), A ↑25,000 (bank) – no total change.
17. Write the accounting equation and find out the missing figure
| Assets | Liabilities | Capital |
|---|---|---|
| 1 80000 | 50000 | ？ |
| 2 ？ | 45000 | 15000 |
| 3 60000 | ？ | 35000 |
(2019 Imp – 3 Marks)
1) C = 80000 – 50000 = 30000
2) A = 45000 + 15000 = 60000
3) L = 60000 – 35000 = 25000.
18. Give journal entries for the following transactions:
(a) Sold goods to Midhun Rs.18,000.
(b) Paid Rent Rs.10,000.
(c) Withdrew cash from business for personal use Rs.4000
(2020 Mar – 3 Marks)
(a) Midhun A/c Dr. 18,000 To Sales A/c 18,000.
(b) Rent A/c Dr. 10,000 To Cash A/c 10,000.
(c) Drawings A/c Dr. 4,000 To Cash A/c 4,000.
19. Journal and ledger are two major components of the double entry system of accounting. Write any three differences between these books.
(2020 Imp – 3 Marks)
20. What does the following journal entry mean?
(a) Drawings A/c Dr. 2,000 To Cash A/c 2,000
(b) Bank A/c Dr. 5,000 To Babu's A/c 5,000
(c) Cash A/c Dr. 10,000 To Sales A/c 10,000
(2021 Mar – 3 Marks)
21. Show the effect of following transaction on the accounting equation:
(a) Business started with cash Rs.50,000
(b) Purchased goods for cash Rs.20,000
(c) Purchased furniture Rs.25,000
(2022 Mar – 3 Marks)
(a) A (cash) +50,000, C +50,000
(b) A (stock) +20,000, A (cash) –20,000 → no change in total A
(c) A (furniture) +25,000, A (cash) –25,000 → total A remains 50,000. Equation: A=50,000, L=0, C=50,000.
22. From the following details, prepare the account of Royal Traders and balance it:
2021 January 5 Sold goods to Royal Stores Rs.10,000
10 Received goods returned by Royal Stores Rs.1,000
17 Received cash from Royal stores Rs.5,000
(2022 Imp – 3 Marks)
Dr side: Jan5 10,000; Cr side: Jan10 1,000, Jan17 5,000; Balance (Dr) = 4,000.
23. Identify the transaction from the following journal entries:
1 Drawings A/c Dr. To Bank account (......)
2 Cash A/c Dr. 2,000 To ???
(2022 Mar – 3 Marks)
24. Akhil has the following transactions
a) Started business with cash Rs. 50,000
b) Purchased goods on credit Rs. 40,000
c) Sold goods costing Rs. 27,000 on credit for Rs. 30,000
d) Bank loan received Rs. 80,000
Prove the accounting equation (A = L + C)
(2019 Mar – 4 Marks)
After a: A=50,000, L=0, C=50,000.
After b: A (stock) +40,000, L (creditor) +40,000 → A=90,000, L=40,000, C=50,000.
After c: A (debtor) +30,000, A (stock) –27,000, C +3,000 (profit) → A=93,000, L=40,000, C=53,000.
After d: A (cash) +80,000, L (bank loan) +80,000 → A=1,73,000, L=1,20,000, C=53,000. Equation holds.
25. Journalize the following transactions:
i. Insurance Paid by cheque Rs.2,000
ii. Goods costing Rs. 2,500 gave as charity
iii. Withdrew cash from bank for office use Rs.1,500
iv. Goods returned to Nirmal Rs.6,000
(2019 Imp – 4 Marks)
i) Insurance A/c Dr. 2,000 To Bank A/c 2,000
ii) Charity A/c Dr. 2,500 To Purchases A/c 2,500
iii) Cash A/c Dr. 1,500 To Bank A/c 1,500
iv) Nirmal A/c Dr. 6,000 To Purchase Returns A/c 6,000.
26. Complete the Journal Entry for the following :
2020 April 1 Rachana A/c Dr 80,000 To ............ 80,000 (Sold goods on Credit to Rachana)
2 ............ A/c. Dr. 1,000 To Cash 1,000 (Purchase stationery for Cash)
5 Furniture A/c. Dr. 15,000 To ............ A/c. (furniture purchased and paid by cheque)
7 ............ A/c. Dr. 7,000 To Cash (Cash withdrawn for personal use) 7,000
(2021 Imp – 4 Marks)
27. Prove the accounting equation from the following:
(a) Started business with cash Rs.2,00,000
(b) Purchased goods from Sonu Rs.10,000
(c) Sold goods to Afsal (costing Rs.6,000) for cash Rs.8,000
(d) Rent paid Rs.5,000
(2023 Imp – 4 Marks)
a) A=2,00,000 (cash), C=2,00,000
b) A (stock) +10,000, L (creditor) +10,000 → A=2,10,000, L=10,000, C=2,00,000
c) A (cash) +8,000, A (stock) –6,000, C +2,000 → A=2,12,000, L=10,000, C=2,02,000
d) A (cash) –5,000, C –5,000 → A=2,07,000, L=10,000, C=1,97,000. Equation holds: 2,07,000 = 10,000 + 1,97,000.
28. Write accounting equations for the following transactions :
(a) Commenced business Rs. 50,000
(b) Purchased machinery Rs.30,000
(c) Purchased goods on credit Rs. 12,000
(d) Sold goods costing Rs.6,000 for cash Rs.8,000
(2024 Mar – 4 Marks)
a) A (cash) +50,000, C +50,000.
b) A (machinery) +30,000, A (cash) –30,000 → A unchanged.
c) A (stock) +12,000, L (creditor) +12,000 → A=62,000, L=12,000, C=50,000.
d) A (cash) +8,000, A (stock) –6,000, C +2,000 → A=64,000, L=12,000, C=52,000.
29. Classify the following under the headings Journal and Ledger :
FY- 350 Book of second entry, Initial recording of transactions, Detailed chronological record of transactions, Summarized record of transactions, Contains description of transactions, Contains number or description of transactions, Records both debit and credit aspects, Separates debit and credit side
(2025 Mar – 4 Marks)
30. Fill in the blanks in the following journal :
JOURNAL
| Date | Particulars | L/F | Amount | Amount |
|---|---|---|---|---|
| 2022 Mar-1 | Purchases A/c Dr. To ______ A/c | (Purchased goods from Hari) | ||
| Mar-5 | ______ A/c Dr. To Purchases A/c | (Took goods for personal use) | ||
| Mar-10 | Furniture A/c Dr. To Bank A/c | (......) |
(2023 Imp – 4 Marks)
31. Prepare accounting equation on the basis of the following :
(a) Anil started business with cash Rs.1,00,000
(b) Purchased goods on credit Rs.20,000
(c) Sold goods costing Rs.8,000 to Udayan for Rs.12,000
(d) Received commission Rs.6,000
(e) Paid salary Rs.5,000
(2022 Imp – 5 Marks)
a) A=1,00,000, C=1,00,000
b) A (stock)+20,000, L+20,000 → A=1,20,000, L=20,000, C=1,00,000
c) A (debtor)+12,000, A(stock)–8,000, C+4,000 → A=1,24,000, L=20,000, C=1,04,000
d) A (cash)+6,000, C+6,000 → A=1,30,000, L=20,000, C=1,10,000
e) A (cash)–5,000, C–5,000 → A=1,25,000, L=20,000, C=1,05,000. Equation: 1,25,000 = 20,000 + 1,05,000.
32. Prepare a journal for the following transactions :
01-01-2021 Business started with cash Rs. 1,00,000
03-01-2021 Deposited into bank Rs. 50,000
05-01-2021 Purchased goods Rs. 20,000
08-01-2021 Wages paid Rs. 2,000
10-01-2021 Commission received Rs. 5,000
15-01-2021 Furniture purchased Rs. 10,000
20-01-2021 Withdrew cash from bank for private use Rs. 4,000
30-01-2021 Sold goods for cash Rs. 40,000
(2021 Mar – 8 Marks) [but 5 Marks in question list? Actually it's 8 marks but we keep as 5+? We'll include as 8 marks section]
33. Journalise the following transactions in the books of Minta Fashions for the month of May, 2020.
2020 May1 Commenced business with cash Rs.2,00,000
"1 Cash deposited into bank Rs.1,50,000
"8 Purchased machinery Rs.23,500
"11 Purchased goods from Star Traders Rs.34,000
"16 Goods returned to Star Traders Rs.1,250
"28 Cash sales Rs.21,000
"31 Salary paid Rs.12,000
"31 Rent paid by cheque Rs.5,000
(2021 Imp – 8 Marks)