📝 Chapter Test

Recording of Transactions – I

Take a notebook and pen first. Solve each question yourself, then pick an option. Only your first choice counts in the score, so do not rush.

Score: 0 / 10 Attempted: 0

Part A: MCQ (1 mark each)

Q1. An accounting voucher is prepared on the basis of:

the ledger account
the journal entry
a source document
the trial balance

A voucher is prepared from the documentary evidence (invoice, cash memo, receipt) of the transaction; the journal entry is written after the voucher.

Q2. The total assets of a business are ₹5,00,000 and its outside liabilities are ₹1,80,000. Its capital is:

₹6,80,000
₹3,20,000
₹1,80,000
₹5,00,000

Capital = Assets − Liabilities = 5,00,000 − 1,80,000 = ₹3,20,000.

Q3. Under the accounting equation approach, an increase in an expense is recorded on the:

debit side, because expenses reduce capital
credit side, because expenses reduce capital
credit side, because cash goes out
either side, as convenient

Expenses reduce capital; a decrease in capital is a debit, so an increase in expenses is debited.

Q4. Goods costing ₹3,000 were given away as charity. The account credited is:

Sales A/c
Charity A/c
Stock A/c
Purchases A/c

Goods leaving the business without a sale are credited to Purchases A/c at cost; Charity A/c is debited.

Q5. In the opening entry, Capital A/c is credited with:

total assets
total liabilities
total assets minus total liabilities
cash and bank balances only

All assets are debited and all liabilities credited; the difference, which is the owner's capital, is credited to Capital A/c.

Q6. A trader in Kanpur sells goods worth ₹50,000 to a customer in Lucknow. GST is 18%. Output CGST A/c will be credited with:

₹9,000
₹4,500
₹2,250
Nil, as IGST applies

It is an intra-state sale (both in UP), so the 18% is split: CGST 9% of 50,000 = ₹4,500 and SGST ₹4,500.

Q7. As per NCERT, Input IGST credit is first set off against:

Output CGST
Output SGST
Output IGST
Output CGST and SGST equally

IGST credit is used first against Output IGST, then against Output CGST, and the balance, if any, against Output SGST.

Q8. The J.F. column in a ledger account shows:

the page number of the journal from which the entry is posted
the page number of the ledger
the date of the voucher
the balance of the account

J.F. (Journal Folio) links each ledger posting back to the journal page where the original entry is recorded.

Q9. Assertion–Reason Assertion (A): Furniture bought for use in the office is not debited to Purchases A/c.
Reason (R): Purchases A/c records only goods bought for resale.

Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Both Assertion (A) and Reason (R) are true, but R is not the correct explanation of A.
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.

Both are true, and R explains A: furniture is a fixed asset for use, not goods for resale, so Furniture A/c is debited.

Q10. Assertion–Reason Assertion (A): Input CGST A/c is shown as a liability of the business.
Reason (R): Input CGST can be set off against Output CGST.

Both Assertion (A) and Reason (R) are true, and R is the correct explanation of A.
Both Assertion (A) and Reason (R) are true, but R is not the correct explanation of A.
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.

Input CGST is tax paid that can be used as credit, so it is an asset, not a liability; A is false. R is a true statement.

Part B: Exam-style questions

Dost Sir: In accountancy, marks are given for correct accounts, correct amounts, proper format and narration. First write the full answer in your notebook, then press “Show solution” and compare line by line.

Q1.3 marks

Journalise the following transactions in the books of Kapoor Traders:

(a) Goods costing ₹4,000 were taken by the proprietor for personal use.
(b) Sunil, a debtor for ₹6,000, became insolvent and 40 paise in the rupee was received from his estate in cash.
(c) Commission of ₹5,000 was received in cash in advance.

I got it right

✍️ Write it like this (board answer)

Date	Particulars	Dr (₹)	Cr (₹)
(a)	Drawings A/c Dr.	4,000
	To Purchases A/c		4,000
	(Being goods taken by proprietor for personal use)
(b)	Cash A/c Dr.	2,400
	Bad Debts A/c Dr.	3,600
	To Sunil’s A/c		6,000
	(Being 40 paise in the rupee received, balance written off as bad debts)
(c)	Cash A/c Dr.	5,000
	To Commission Received in Advance A/c		5,000
	(Being commission received in advance)

Working: (b) cash = 40% of 6,000 = ₹2,400; bad debts = 6,000 − 2,400 = ₹3,600. (c) Commission not yet earned is a liability.

Q2.3 marks

Show the effect of the following transactions on the accounting equation of Rekha Stores:

(a) Rekha started business with cash ₹1,50,000 and goods ₹50,000.
(b) Bought furniture on credit from Modi Furniture ₹20,000.
(c) Sold goods costing ₹30,000 for ₹42,000 in cash.

I got it right

✍️ Write it like this (board answer)

No.	Cash	Goods	Furniture	Total Assets	=	Creditors	Capital	Total
(a)	1,50,000	50,000	–	2,00,000	=	–	2,00,000	2,00,000
(b)	–	–	+20,000	+20,000	=	+20,000	–	+20,000
Balance	1,50,000	50,000	20,000	2,20,000	=	20,000	2,00,000	2,20,000
(c)	+42,000	−30,000	–	+12,000	=	–	+12,000	+12,000
Final	1,92,000	20,000	20,000	2,32,000	=	20,000	2,12,000	2,32,000

In (c) the profit of ₹12,000 (42,000 − 30,000) increases capital. Assets ₹2,32,000 = Liabilities ₹20,000 + Capital ₹2,12,000.

Q3.4 marks

Record the journal entries in the books of Arjun of Lucknow (UP), GST @ 18%:

(i) Bought goods ₹1,50,000 on credit from Rawat Traders, Kanpur (UP).
(ii) Sold goods ₹2,00,000 to Sehgal & Co., Delhi; payment received by NEFT.
(iii) Sold goods ₹1,00,000 for cash in Lucknow.
(iv) Paid shop rent ₹20,000 by cheque (CGST 9% + SGST 9%).

I got it right

✍️ Write it like this (board answer)

Date	Particulars	Dr (₹)	Cr (₹)
(i)	Purchases A/c Dr.	1,50,000
	Input CGST A/c Dr.	13,500
	Input SGST A/c Dr.	13,500
	To Rawat Traders A/c		1,77,000
	(Being goods bought on credit within UP)
(ii)	Bank A/c Dr.	2,36,000
	To Sales A/c		2,00,000
	To Output IGST A/c		36,000
	(Being goods sold to Delhi, IGST @ 18%)
(iii)	Cash A/c Dr.	1,18,000
	To Sales A/c		1,00,000
	To Output CGST A/c		9,000
	To Output SGST A/c		9,000
	(Being goods sold for cash within UP)
(iv)	Rent A/c Dr.	20,000
	Input CGST A/c Dr.	1,800
	Input SGST A/c Dr.	1,800
	To Bank A/c		23,600
	(Being rent paid with GST)

Q4.4 marks

From the following journal entries of Neha Traders for May 2026, prepare the Cash Account and balance it on 31 May 2026:

May 1: Cash A/c Dr. ₹80,000 To Capital A/c
May 5: Purchases A/c Dr. ₹25,000 To Cash A/c
May 9: Cash A/c Dr. ₹14,000 To Sales A/c
May 15: Cash A/c Dr. ₹7,840 and Discount Allowed A/c Dr. ₹160 To Amit’s A/c ₹8,000
May 20: Rent A/c Dr. ₹6,000 To Cash A/c
May 25: Bank A/c Dr. ₹30,000 To Cash A/c
May 31: Cash A/c Dr. ₹2,000 To Commission Received A/c

I got it right

✍️ Write it like this (board answer)

Dr.Cash AccountCr.

Date	Particulars	₹	Date	Particulars	₹
2026 May 1	To Capital A/c	80,000	2026 May 5	By Purchases A/c	25,000
May 9	To Sales A/c	14,000	May 20	By Rent A/c	6,000
May 15	To Amit’s A/c	7,840	May 25	By Bank A/c	30,000
May 31	To Commission Received A/c	2,000	May 31	By Balance c/d	42,840
		1,03,840			1,03,840
Jun 1	To Balance b/d	42,840

Only the cash part (₹7,840) of the May 15 entry goes to Cash A/c; the discount of ₹160 is posted to Discount Allowed A/c and Amit’s A/c, not to Cash A/c. Debit total 1,03,840 − credit items 61,000 = debit balance ₹42,840.

Q5.6 marks

Journalise the following transactions of Singh Book Depot and post them to the Cash Account, Bank Account and Nikhil Publishers’ Account. Balance these accounts. (Ignore GST.)

2026
Jun 1 Started business with cash ₹1,00,000.
Jun 3 Opened a bank account with ₹60,000.
Jun 7 Bought books from Nikhil Publishers on credit ₹40,000.
Jun 12 Cash sales ₹22,000.
Jun 18 Paid Nikhil Publishers ₹39,200 by cheque in full settlement.
Jun 24 Withdrew ₹10,000 from bank for office use.
Jun 30 Paid salary in cash ₹9,000.

I got it right

✍️ Write it like this (board answer)

Journal of Singh Book Depot

Date	Particulars	Dr (₹)	Cr (₹)
2026 Jun 1	Cash A/c Dr.	1,00,000
	To Capital A/c		1,00,000
	(Being business started with cash)
Jun 3	Bank A/c Dr.	60,000
	To Cash A/c		60,000
	(Being bank account opened)
Jun 7	Purchases A/c Dr.	40,000
	To Nikhil Publishers A/c		40,000
	(Being books bought on credit)
Jun 12	Cash A/c Dr.	22,000
	To Sales A/c		22,000
	(Being cash sales)
Jun 18	Nikhil Publishers A/c Dr.	40,000
	To Bank A/c		39,200
	To Discount Received A/c		800
	(Being cheque paid in full settlement, discount received)
Jun 24	Cash A/c Dr.	10,000
	To Bank A/c		10,000
	(Being cash withdrawn from bank for office use)
Jun 30	Salaries A/c Dr.	9,000
	To Cash A/c		9,000
	(Being salary paid)
	Total	2,81,000	2,81,000

Dr.Cash AccountCr.

Date	Particulars	₹	Date	Particulars	₹
2026 Jun 1	To Capital A/c	1,00,000	2026 Jun 3	By Bank A/c	60,000
Jun 12	To Sales A/c	22,000	Jun 30	By Salaries A/c	9,000
Jun 24	To Bank A/c	10,000	Jun 30	By Balance c/d	63,000
		1,32,000			1,32,000
Jul 1	To Balance b/d	63,000

Dr.Bank AccountCr.

Date	Particulars	₹	Date	Particulars	₹
2026 Jun 3	To Cash A/c	60,000	2026 Jun 18	By Nikhil Publishers A/c	39,200
			Jun 24	By Cash A/c	10,000
			Jun 30	By Balance c/d	10,800
		60,000			60,000
Jul 1	To Balance b/d	10,800

Dr.Nikhil Publishers AccountCr.

Date	Particulars	₹	Date	Particulars	₹
2026 Jun 18	To Bank A/c	39,200	2026 Jun 7	By Purchases A/c	40,000
Jun 18	To Discount Received A/c	800
		40,000			40,000

Cash balance ₹63,000 (Dr.); Bank balance ₹10,800 (Dr.); Nikhil Publishers’ account is closed (fully settled).

Q6.Case Study · 4 marks

Neha runs “Neha Gift Corner” in Agra (UP). On 1 April 2026 her books show: Cash ₹20,000, Stock ₹60,000, Furniture ₹40,000, Debtors ₹15,000, Creditors ₹25,000 and a Bank Loan of ₹30,000. During April she buys gift items for cash from a local wholesaler and keeps the cash memo. At the end of April her GST figures are: Output CGST ₹12,600, Output SGST ₹12,600, no Output IGST; Input CGST ₹9,000, Input SGST ₹9,000 and Input IGST ₹2,000.

(i) Which voucher will be prepared for the cash purchase, and on the basis of which document? (1)
(ii) What amount will be credited to Capital A/c in her opening entry? (1)
(iii) Following the NCERT order of set-off, how much GST must she pay in cash? (1)
(iv) Pass the journal entry for paying this balance through the Electronic Cash Ledger. (1)

I got it right

✍️ Write it like this (board answer)

(i) A debit (payment) voucher, prepared on the basis of the cash memo, which is the source document.

(ii) Assets = 20,000 + 60,000 + 40,000 + 15,000 = ₹1,35,000; liabilities = 25,000 + 30,000 = ₹55,000. Capital = ₹80,000.

(iii) No Output IGST, so Input IGST ₹2,000 goes against Output CGST: CGST payable = 12,600 − 2,000 − 9,000 = ₹1,600. SGST payable = 12,600 − 9,000 = ₹3,600. Total cash payable = ₹5,200.

(iv)

Particulars	Dr (₹)	Cr (₹)
Output CGST A/c Dr.	1,600
Output SGST A/c Dr.	3,600
To Electronic Cash Ledger A/c		5,200
(Being balance GST paid)

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