Ministerio de Gobierno
DISPOSICIÓN N.° 1003/DGET/
Where either purchases are made for credit or loans are taken, then Bills are issued which are termed as Bills Payable. The book in which these bills are recorded is termed as Bills Payable Book. All such Bills are totalled after a lapse of a certain period and are posted in the accounts of the creditors to whom such bills are issued. Following is the form of Bills Payable Book:
Bills Payable Book
Date To
Whom Payable
Term Drawer Acceptor Endorser
(s) Due Date Where payable L.F. Amount ( ) Remarks
Example:From the following transactions of a trader prepare the bills payable book and post it into ledger:
2011
January 5 Accepted a bill at 3 m/d for 200 drawn by Rohen & Co. January 20 gave acceptance at 2 m/d for 500 to Dhruv.
January 30 Acceptance at 1 m/d for 500 given to Feroz & Co.
Solution:
Bills Payable Book
Date Particulars Term Due Date L.F. Amount
( ) 2011
Jan. 5 Jan. 20 Jan. 30
Rohen & Co. Dhruv Feroz & Co.
3 m/d 2 m/d 1 m/d April 8 March 23 March 30 200 500 500 1,200 Bills Payable Account
2011 ( )
Jan. 31 By Sundries as per B/p Book
1,200
Rohen & Co.
2011 ( )
Jan. 5 By Bill Payable 200
Dhruv
2011 ( )
Notes Feroz & Co.
2011 ( )
Jan. 31 By Bill Payable 500
Task Prepare a Cash Book with Bank column only:
2009 ( )
July 1 Balance at bank 10,000
July 4 Received a cheque from Pankaj 5,000
July 7 Issued a cheque to Rakesh 6,000
July 10 Received dividend by bank draft 2,000 July 15 Mukesh was paid by issuing a cheque 1,500
July 20 Deposited into bank 7,000
July 24 Interest collected by bank 200
July 28 Dividend collected by bank 500
July 31 Bank charges debited 800
Hint: Total of Cash Book 24,700, Closing Balance 16,400.
Self Assessment
Multiple Choice Questions: 8. Cash book is to record the:
(a) Cash receipts (b) Cash Payments (c) Both (a) & (b)
(d) Cash receipts, payment, Bank Receipts, payments, Discount received and paid 9. Sales book is to record the:
(a) The entire sales volume (b) The cash sales only (c) The credit sales only
(d) The credit sales with the discounts
10. When equity (net assets) is subtracted from total assets the amount remaining is known as which of the following?
(a) Total revenue (b) Total liabilities (c) Total expenses (d) Net income or net loss (e) All of the above
Notes
6.4 Summary
The regular/frequent occurrence of transactions are recorded only in the separate books which are known as subsidiary book of accounts or subsidiary journals, instead of being recorded in the regular journal.
Subsidiary books are classified on the basis of transactions viz Cash transactions and Noncash-transactions.
The purchases book is known in other words as purchase journal. It is a book meant for credit purchases only for resale.
Purchase return book is a book of goods returned to the supplier which are out of credit purchases.
Sales book is a book maintained by the enterprise only during the moment of selling the goods on credit. It is known in other words as a sales journal.
Sales return is a book that registers the goods sold on credit and received from the buyers.
6.5 Keywords
Bill of Exchange: A bill of exchange is an unconditional order signed by the maker which directs
the recipient to pay a fixed sum of money to a third party at a future date.
Journal: The primary book in which the transactions are recorded first time. Ledger: It is the classification of accounts in which various accounts are maintained.
Non-cash Transactions: A Non-cash transaction is a transaction in terms of credit and conditions
of the enterprise.
Purchase Book: It is known in other words as purchase journal. It is a book meant for credit
purchases only for resale.
Sales Book: It is a book maintained by the enterprise only during the moment of selling the
goods on credit. It is known in other words as a sales journal.
Sales Return Book: Sales return is a book that registers the goods sold on credit and received
from the buyers.
Subsidiary Book: It is a book maintained for routine transactions of the enterprise.
Trial Balance: Trial balance is a list in which all the balances of the accounts of Ledger are
showed to test the arithmetical accuracy of the posting in ledger.
6.6 Review Questions
1. Illustrate the preparation of records for non cash transactions with suitable examples. 2. Explain the nature of petty cash book.
Notes 4. Compose three columns Cash Book from the following transactions:
2006 ( )
Jan. 1 Cash in hand 567
Jan. 1 Cash at bank 12,675
Jan. 2 Received from Ashish and 7,900
allowed him a discount 100
Jan. 4 Deposited into the bank 5,000
Jan. 6 Furniture purchased for cash 2,500
Jan. 7 Paid to Vikas by cheque 7,800
and received discount 200
Jan. 14 Received from Manish by cheque and Deposited into bank 5,000
Jan.16 Cash Sales 8,000
Jan. 20 Deposited into bank 6,000
Jan. 25 Purchased a Machine and paid by a cheque 12,000
Jan. 26 Paid by cheque to Kishore 1,370
and received discount 30
Jan. 27 Withdrew from bank for office use 2,500
Jan. 28 Purchased goods for cash 5,000
Jan. 29 Paid wages by cheque 4,500
Jan. 31 Paid Rent 500
5. What are the different types of trade bills books? 6. Write a short note on the following:
(a) Debit Note (b) Credit Note
7. Make the proforma of purchase return book and sales return book and explain it. 8. Explain the significance of preparing subsidiary books of accounts.
Answers: Self Assessment
1. cash transactions 2. credit side
3. ledger 4. discount
5. petty cash book 6. Invoice
7. Returns Outward Book 8. (d)
Notes
6.7 Further Readings
Books Khan and Jain, “Management Accounting”.
M.P. Pandikumar, “Accounting & Finance for Managers”, Excel Books, New Delhi. R.L. Gupta and Radhaswamy, “Advanced Accountancy”.
S.N. Maheswari, “Management Accounting”.
V.K. Goyal, “Financial Accounting”, Excel Books, New Delhi.
Online links http://www.globusz.com/ www.scribd.com
Notes
Unit 7: Trial Balance
CONTENTS Objectives Introduction