# Problem 1

Which two elements/accounts are effected by the following transactions? Also state the nature/kind/type of the elements

1. Started business with capital 75,000
2. Bought furniture 10,000
3. Bought goods for cash 20,000
4. Bought goods from Ram on Credit 10,000
5. Sold goods for cash 15,000
6. Sold goods to Shyam on credit 5,000
7. Returned goods to Ram 1,000
8. Goods Returned from Shyam 500
9. Goods taken by Proprietor for his personal use 1,000

# Solution

1. Capital a/c

Person

Personal a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
2. Furniture a/c

Tangible aspect (Asset)

Real a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
3. Goods a/c

Tangible aspect (Asset)

Real a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
4. Goods a/c

Tangible aspect (Asset)

Real a/c
Ram a/c

Person

Personal a/c
5. Cash a/c

Tangible aspect (Asset)

Real a/c
Goods a/c

Tangible aspect (Asset)

Real a/c
6. Cash a/c

Tangible aspect (Asset)

Real a/c
Shyam a/c

Person

Personal a/c
7. Goods a/c

Tangible aspect (Asset)

Real a/c
Ram a/c

Person

Personal a/c
8. Goods a/c

Tangible aspect (Asset)

Real a/c
Shyam a/c

Person

Personal a/c
9. Goods a/c

Tangible aspect (Asset)

Real a/c
Drawings a/c

Person

Personal a/c

# Problem 2

Name the two elements/accounts effected by the following transactions. Also state the nature/kind/type of the elements

1. Paid cash to Ram 5,000
2. Received cash from Shyam 3,000
3. Wages Paid 750
5. Cash taken by proprietor for his personal use 2,500
6. Purchased stationery 300

# Solution

1. Ram a/c

Person

Personal a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
2. Cash a/c

Tangible aspect (Asset)

Real a/c
Shyam a/c

Person

Personal a/c
3. Wages a/c

Expenditure

Nominal a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
4. Cash a/c

Tangible aspect (Asset)

Real a/c

Income

Nominal a/c
5. Cash a/c

Tangible aspect (Asset)

Real a/c
Drawings a/c

Person

Personal a/c
6. Cash a/c

Tangible aspect (Asset)

Real a/c
Stationery a/c

Expenditure

Nominal a/c
7. Cash a/c

Tangible aspect (Asset)

Real a/c

Income

Nominal a/c

To avoid ambiguity regarding what information the account head provides, it is always appropriate to use additional words to specify the nature of information.

Note such usage in case of the following above

• Rent may indicate either rent received or rent paid
• Interest may indicate either interest received or interest paid

Where we do not specify by using a suffix, we assume that account head to represent an expenditure. This is just a convention and not a rule.

• Wages, since not specified is treated as an expenditure.

# Problem 3

What are the two elements/accounts effected by the following transactions. Also state the nature/kind/type of the elements

1. Paid Cash into Bank 25,000
2. Withdrawn from bank 5,000
3. Paid to Ram by Cheque 3,500
4. Received a cheque from Shyam 2,700
5. Purchased Machinery and paid by cheque 12,000
6. Salary paid by cheque 4,500
7. Commission received by Cheque 7,200
8. Withdrawn from bank for office use 5,000
9. Withdrawn from bank for personal use 3,000

# Solution

1. Bank a/c

Organisation

Personal a/c
Cash a/c

Tangible aspect (Asset)

Real a/c
2. Cash a/c

Tangible aspect (Asset)

Real a/c
Bank a/c

Organisation

Personal a/c
3. Bank a/c

Organisation

Personal a/c
Ram a/c

Person

Personal a/c
4. Bank a/c

Organisation

Personal a/c
Shyam a/c

Person

Personal a/c
5. Machinery a/c

Tangible Aspect (Asset)

Real a/c
Bank a/c

Organisation

Personal a/c
6. Bank a/c

Organisation

Personal a/c
Salary a/c

Expenditure

Nominal a/c
7. Bank a/c

Organisation

Personal a/c

Income

Nominal a/c
8. Bank a/c

Organisation

Personal a/c
Cash a/c

Tangible Aspect (Asset)

Real a/c
9. Drawings a/c

Person

Personal a/c
Bank a/c

Organisation

Personal a/c
10. Bank a/c

Organisation

Personal a/c

Expenditure

Nominal a/c

To avoid ambiguity regarding what information the account head provides, it is always appropriate to use additional words to specify the nature of information.

Note such usage in case of the following above

• Commission may indicate either commission received or commission paid

Where we do not specify by using a suffix, we assume that account head to represent an expenditure. This is just a convention and not a rule.