Accounting Transactions Solved

TRANSACTION NO. 11
Cash withdrawn by the owner (Mr. Rizwan) Rfl. 6,000 and goods taken by him H«. 2,000
"for his personal use.
ANALYSIS:
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There are three changes in this business transaction:
1. Decrease in cash balance Rs. 6,000 (an asset).
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2. Decrease .in goods (purchases) by Rs. 2,000 (a decrease in expense). .
3; Decrease in capital or owner's equity or increase in Drawings of the owner by Rs. 8,000.
TRANSACTION NO. 19
Cash given away as charity Rs. 1,000 and goods given away as charity Rs. 200. ANALYSIS:
There are three changes:
1. Decrease in cash balance Rs. 1,000 (an asset),
2 . Decrease in goods (purchases) by Rs. 200 (a decrease in expense).
3. Increase in charity by Rs. 1,200 (an expense or loss).
TRANSACTION NO. 20 ,
Goods distributed as free samples for advertisement purposes Rs. 4,000. , ANALYSIS:
There- are two changes:
Decrease in goods (purchases) by Rs. 4,000 (a decrease in expanse).
Increase in advertisement expenditures by Rs. 4,000 (an expense incurred),
TRANSACTION NO. 21
OnnHs 1«f.
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TRANSACTION NO. 22
Stationery consumed during the month worth Rs. 4,000. ANALYSIS:
Stationery worth Rs. 6,000 was purchased at the beginning of the month. During month stationery of Rs. 4,000 have been used. There are two changes:
1. Decrease in stationery Rs. 4,000 (a decrease in asset). . 2. Increase in stationery expense Rs. 4,000 (an expense). TRANSACTION NO. 23
Salaries paid for the month Rs. 8,000. ANALYSIS:
There are two changes:
Increase in salaries Rs. 8,000 (an expense incurred).
Decrease in Cash balance Rs. 8,000 (an asset).
TRANSACTION NO. 24
Rent of the building Rs. 6,000 and Electricity bill Ra. 2,000 paid by cheque. ANALYSIS:
There are three changes:
Increase in Rent Rs. 6,000 (an expense incurred).
Increase in Electric charges Rs. 2,000 (an expense incurred).
Decrease in bank balance Rs. 8,000 (an asset).
In all the above discussed transactions, it may be observed that in every busu transaction there are at least two changes and in some cases there are more than changes. All these changes are recorded in the books of accounts of the business in sepa accounts. Every change is supposed to be recorded in a separate account.
NOTE:
Discussion about account and how a change is recorded in an account is made late this chapter.