Journal | Aster Classes

Chapter 3: Journal

Answer in One Sentence:

1.What is Journal ?

SOLUTION

A journal is a book prepared to classify or sort out transactions in a form convenient for their subsequent entry in the ledger.

2.What is Narration?

SOLUTION

Narration is a brief explanation about the transaction.

3.What is GST?

SOLUTION

GST means Goods and Service Tax. GST is one nation, one tax, one market.

4.In which year GST was imposed by the Central Government of India?

SOLUTION

GST was imposed by the Central Government of India in the year 2017 (1st July 2017).

5.What is meant by simple entry ?

SOLUTION

For a transaction, entry in which only two accounts are affected, one account is debited and the other account is credited, is known as simple entry.

6.What is the meaning of Combined Entry?

SOLUTION

A journal entry which contains more than one debit or more than one credit or both effects of a transaction is known as a combined/compound journal entry.

7.Which account is debited, when rent is paid by debit card?

SOLUTION

When rent is paid by debit card, Rent A/c is debited.

8.Which discount is not recorded in the books of account?

SOLUTION

Trade discount is not recorded in the books of account.

9.In which order monthly transactions are recorded in a journal?

SOLUTION

In the order of their occurrence, monthly transactions are recorded in a journal.

10.Which account is credited, when goods are sold on credit?

SOLUTION

When goods are sold on credit, Sales account is credited.

Give one word/term or phrase for the following statement:

1.A book of prime entry.

SOLUTION

Journal

2.The tax imposed by Central Government on Goods and Services

SOLUTION

GST Goods and Service Tax

3.Brief explanation of an entry.

SOLUTION

Narration

4.The process of recording transactions in the Journal.

SOLUTION

Journalising

5.The French word from which the word Journal is derived.

SOLUTION

JOUR

6.Concession given for immediate payment.

SOLUTION

Cash discount

7.Entry in which more than one accounts are to debited or credited.

SOLUTION

Combined/Compound Journal Entry

8.Anything taken by proprietor from business for his private use.

SOLUTION

Drawings

9.Tax payable to the Government on purchase of goods.

SOLUTION

Input CGST and Input SGST or Input Tax

10.Page number of the ledger.

SOLUTION

Ledger Folio

Select the most appropriate alternative from the alternatives given below and rewrite the statement.

1._________ means explanation of the transactions recorded in the Journal.

  • Narration
  • Journalising
  • posting
  • Casting

2._________ discount is not recorded in the books of accounts.

  • Trade
  • Cash
  • GST
  • VAT

3.Recording of transaction in Journal is called ______.

  • posting
  • journalising
  • narration
  • prime entry

4.Every Journal entry require ______.

  • casting
  • posting
  • narration
  • journalising

5.The ______ column of the Journal is not recorded at the time of journalising

  • date
  • particulars
  • ledger folio
  • amount

6.Goods sold on credit should be debited to _________.

  • purchase A/c
  • customer A/c
  • sales A/c
  • cash A/c

7.Wages paid for installation of Machinery should be debited to _________

  • wages A/c
  • machinery A/c
  • cash A/c
  • Installation A/c

8.The commission paid to the agent should be debited to _________

  • drawing A/c
  • cash A/c
  • commission A/c
  • Agent A/c

9.Loan taken from Dena Bank should be credited to ________

  • Capital A/c
  • Dena Bank A/c
  • Cash A/c
  • Dena Bank Loan A/c

10.Purchase of animals for cash should be debited to ________

  • Live stock A/c
  • Goods A/c
  • Cash A/c
  • Bank A/c

State whether the following statement is True or False with reasons.

1.Narration is not required for each and every entry.

Options
  • True
  • False

SOLUTION

This statement is False.

Narration is nothing but brief explanation of entry/transaction, based on that one Can pass journal entry. Therefore, narration is required for each and every entry.

2.A journal voucher is must for all transactions recorded in the journal.

Options
  • True
  • False

SOLUTION

This statement is True.

Journal voucher is basic/original voucher on the basis of which the transactions should be journalised in journal book, so we can say that journal voucher is must for all transactions recorded in the journal.

3.Cash discount allowed should be debited to discount A/c.

Options
  • True
  • False

SOLUTION

This statement is True.

Cash discount allowed is an expense for the business and every expense should be debited. Therefore cash discount allowed should be debited to Discount A/c.

4.Journal is a book of prime entry.

Options
  • True
  • False

SOLUTION

This statement is True.

For every financial transaction, initially, an entity is recorded in the book known as ‘Journal’. Therefore, we can say that journal is a book of prime entry

5.Trade discount is recorded in the books of accounts.

Options
  • True
  • False

SOLUTION

This statement is False. 

Trade discount is a general discount, allowed on catalog price or on the price list price. For increasing the sale or to give sufficient margin to retailers, generally trade discount is allowed. Therefore, the trade discount is not to be recorded in the books of accounts.

6.Goods lost by theft is debited to goods A/c.

Options
  • True
  • False

SOLUTION

This statement is False. 

As per Real A/c rule, debit what comes in and credit what goes out. Here, goods lost by theft means goods goes out. Therefore, goods lost by theft is to be credited to Goods A/c.

7.If rent is paid to landlord, landlord’s A/c should be debited.

Options
  • True
  • False

SOLUTION

This statement is False. 

Rent paid is an expense and Rent paid A/c should be debited, not Landlord A/c be debited.

8.Book Keeping records monetary and non-monetory transactions

Options in
  • True
  • False

SOLUTION

This statement is False. 

In the books of accounts, only financial transactions are to be recorded. Means non-monetary transactions are not be recorded.

9.Drawings made by the proprietor increases his capital

Options
  • True
  • False

SOLUTION

This statement is False. 

Drawings means, anything withdrawn by proprietor in the form of cash, goods, assets or services from the business for personal use. And it decreases the capital of proprietor.

10.GST paid on purchase of goods Input tax A/c should be debited.

Options
  • True
  • False

SOLUTION

This statement is True.

When goods are purchased, any tax payable on it is an expense for the business. Therefore, we can say that when GST is paid. Input Tax should be debited.

Fill in the blank:

SOLUTION

1.The first book of original entry is the Journal

2.The process of recording transaction into journal is called Journalising.

3.An explanation of the transaction recorded in the journal narration.

4. Trade discount is not recorded in the books of accounts.

5.There are three parties to a cheque

6.The crossed cheque is more safe than other cheques as it cannot be encashed on the counter of the bank.

7.Cash discount is concession allowed for bulk purchase of goods or for immediate payment.

8.Every Journal Entry requires voucher.

9.Cash discount is always recorded in the books of accounts. 

10.Voucher is the document on the basis of which the entry is recorded in journal.

1.Prepare specimen of Tax Invoice

SOLUTION

2.Prepare specimen of Receipt

SOLUTION

3.Prepare specimen of Crossed cheque

solution

4.Prepare specimen of Cash voucher.

SOLUTION

Correct the following statement and rewrite the statement:

1.All business transactions are recorded in the Journal.

SOLUTION

Only monetary transactions are recorded in the Journal.

2.Cash discount is not recorded in the books of accounts

SOLUTION

Cash discount is recorded in the books of accounts

3.Journal is a book of Secondary entry.

SOLUTION

Journal is a book of Prime entry

4.GST is imposed by the Government of India from 1st July 2018.

SOLUTION

GST is imposed by the Government of India from 1st July, 2017.

5.Machinery purchased by the Proprietor decreases his capital

SOLUTION

Machinery purchased by the proprietor increases his Capital

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