Lesson-5

Ledger

Learning Objectives

• To understand the term ledger

• To know how to do ledger postings
• To understand the rules of posting
• To know the meaning of trial balance

Introduction

The purpose of journal entry is to record the entries in the books of account. To know the
balance on each account at the end of the period, a summary of all transactions relating
to one account is necessary and this is done in the ledger. Thus, the activity of
classifying, summarizing and grouping is done in the ledger.

Ledger

Ledger is the principal book of accounts which contains various accounts. An account is
a summarized record of similar transactions during an accounting period relating to a
particular person or thing. Therefore, all the accounts, whether real, nominal or personal,
are collected in the ledger.

Ledger shows the net effect under one particular head relating to the similar transaction
that has taken place in a particular period. For example, if a business person wants to
know the total sales for a particular period, he/she will have to do a great deal of
searching to go through all the transactions of cash sales and credit sales recorded in the
journal to find out the total sales. This task is simplified by sorting and accumulating all
similar transactions relating to a particular account head and consolidating them in one
account maintained in the ledger. This will help in knowing the effect of the relevant
account at a glance. Hence, it becomes possible to find out the figures of purchases, sales
and net amount payable and receivable from particular individuals during a period
immediately by referring to the ledger.

In the case of a large organization where a large number of accounts are required to be
maintained, three separate ledgers are maintained. These are as follows:

1. Debtors’ ledger: Containing all the dealings with customers on credit

2. Creditors’ ledger: Containing all the dealings with suppliers on credit
3. General ledger: All the remaining accounts, i.e. real and nominal accounts

The accounts in the ledger are maintained in the following “T” form. Each account is
divided into two sides-- the left hand side representing the debit side and the right hand
side representing the credit side. Each side of the ledger has columns detailing date,
particulars, folio and amount.

Dr. Title of the Account

Cr.
 Date Particulars Folio Rs. Date Particulars Folio Rs.

Sometimes, the ledger is also maintained in the running account form as shown below:

Date Particulars Folio Dr. Amt. Cr. Amt. Balance

Rs. Rs. Rs.

Posting

Posting means the process of transferring all the debit and credit items from the journal
onto the accounts maintained in the ledger. Each amount entered in the debit column of
the journal is posted by entering it on the debit side of the account in the ledger with
relevant details. Similarly, each amount entered in the credit column is posted by
entering it on the credit side of the account in the ledger with relevant details.

The procedure of posting is as follows:

1. Enter the debit aspect of the transaction entered in journal on the debit side of the
account in the ledger with all the relevant details in the respective column.
2. In the folio column of the journal, the page number of the ledger in which posting is
done is entered.
3. Now enter the credit aspect of the transaction in the journal on the credit side of the
account in the ledger with all the relevant details in the respective column.
4. The entering of the folio number on the corresponding page, as explained in the point
number two above, is to be repeated in the case of credit item.
5. It is customary to prefix the name of the account credited and entered on the debit
side of the account in the ledger with word “To.”
6. Similarly, the name of the account debited and entered on the credit side of the
account in the ledger is prefixed with “By.”

It may be noted that the words “To” and “By” do not have any special meaning. Hence,
the prefix can be conveniently ignored as done by modern accountants.

Balancing of Ledger Account

The totals of the debit side and credit side of an account are taken to ascertain the
difference between the two sides. This difference is known as the balance on the account.
The total of the heavier side is entered on the lighter side for arriving at the balance.
When the total of the debit side exceeds the total of the credit side, the balance is said to
be in debit, i.e. known debit balance. When the total of the credit side exceeds the total of
the debit side, it means that the account has a credit balance. The balancing of the
account is necessary to ascertain the net effect whether debit or credit on the account.

Problem

Journalize the following transactions, post them to ledger and balance the accounts:

March 1998
Rs.
1 Santosh started his business with cash 10,000
2 Purchased furniture from Yadav on credit 500
4 Bought goods for cash from Manish 7,000
6 Sold goods on credit to Amar 3,700
7 Sold goods for cash to Joshi 2,900
14 Paid cash to Yadav 500
18 Goods purchased on credit from Nahar 9,800
20 Sold goods on credit to Naidu 5,480
22 Received cash from Amar due from him 3,700
24 Joshi returned goods sold on 7 th in cash 2,900
28 Received cash from Naidu 4,480
30 Paid office salaries Rs. 500, rent Rs. 250 750
31 Received commission
100
Solution
Journal
Date Particulars L.F. Dr. Rs. Cr. Rs.
1993 Cash A/c 10,000
Mar.1 To
Dr. Santosh’s Capital A/c 10,000
(Started business with cash)
Mar. 2 Furniture A/c Dr. 500
To Yadav’s A/c 500
(Purchased furniture on credit from
Yadav)
Mar. 4 Goods A/c 7,000
Dr. To Cash A/c 7,000
(Cash purchases from Manish)
Mar. 6 Amar A/c 3,700
Dr. To Goods A/c 3,700
(Credit sales to Amar)
Mar. 7 Cash A/c 2,900
Dr. To Goods A/c 2,900
(Cash sales to Joshi)
Mar. 14 Yadav A/c 500
Dr. To Cash A/c 500
(Paid to Yadav on A/c)
Mar. 18 Goods A/c 9,800
Dr To Nahar A/c 9,800
(Credit purchases from Nahar)
Mar. 20 Naidu A/c 5,480
Dr. To Goods A/c 5,480
(Credit sales to Naidu)
Mar. 22 Cash A/c 3,700
Dr. To Amar A/c 3,700
(Received cash from Amar on account)
Mar. 24 Goods A/c 2,900
Dr. To Cash A/c 2,900
(Refunded cash to Joshi on return of
goods by him)
Mar. 28 Cash A/c Dr. 4,480
 To Naidu A/c 4,480
(Received cash from Naidu on account)
Mar. 30 Salaries A/c Dr. 500
Rent A/c 250
Dr. Cash A/c
To 750
(Paid salaries and rent for the month
of…)
Mar. 31 Cash A/c 100
Dr. To Commission A/c 100
(Received cash for commission)
Total 51,710 51,710

Ledger
Capital A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.31 To Balance c/d 10,000 Mar.1 By Cash A/c 10,000
April.1
10,000 10,000
By Balance b/d 10,000

Cash A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.1 To Capital A/c 10,000 Mar.4 By Goods A/c 7,000
Mar.7 To Goods A/c 2,900 Mar.14 By Yadav A/c 500
Mar.22 To Amar A/c 3,700 Mar.24 By Goods A/c 2,900
Mar.28 To Naidu A/c 4,480 Mar.30 By Salaries A/c 500
Mar.31 To Commission Mar.30 By Rent A/c 250
A/c 100 Mar.31 By Balance c/d 10,030
21,180 10,000
April.1 To Balance b/d 10,030 10,000

Goods A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.4 To Cash A/c 7,000 Mar.6 By Amar A/c 3,700
Mar.18 To Nahar A/c 9,800 Mar.7 By Cash A/c 2,900
Mar.24 To Cash A/c 2,900 Mar.20 By Naidu A/c 5,480

Furniture A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.2 To Yadav A/c 500 10,000
Mar.31 By Balance c/d
500 10,000
April.1 To Balance b/d 500 10,000

Yadav A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
 1998 1998
Mar.14 To Cash A/c 500 Mar.2 By Furniture A/c 500

Amar A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.1 To Goods A/c 3,700 Mar.22 By Cash A/c 3,700

Nahar A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.31 To Balance c/d 9,800 9,800
Mar.18 By Goods A/c
9,800 9,800
April 1 By Balance b/d 9,800

Naidu A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.20 To Yadav A/c 5,480 4,480
Mar.28 By Cash A/c
Mar.31 By Balance c/d 1,000
5,480 5,480
April 1 To Balance b/d 1,000

Salaries A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.30 To Cash A/c 500 Mar.31 By Balance c/d 500
500 500
April 1 To Balance b/d 500

Rent A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.30 To Cash A/c 250 Mar.31 By Balance c/d 250
250 250
April 1 To Balance b/d 250

Commission A/c
Date Particular L.F. Rs. Date Particular L.F. Rs.
1998 1998
Mar.31 To Balance c/d 100 Mar.31 By Cash A/c 100
100 100
By Balance b/d 100

(Since goods are sold at profit, Goods A/c cannot be closed unless we know profit or
stock on hand on the last date.)

(c/d means carried down and b/d means brought down)

Subsidiary Books of Accounts

A journal is divided into separate books for the sake of convenience and to enable the
handling of numerous transactions of repetitive nature. This facilitates easy working and
curtails down the voluminous work involved in the posting and entering of each
transaction in the journal and ledger. All similar transactions pertaining to one particular
class are recorded in one particular book. For example, all transactions relating to credit
purchases of goods are recorded in one book known as the Purchase Day Book.
Similarly, all transactions relating to credit sales of goods are recorded in the Sales Day
Book.

The names of subsidiary books are as follows:

1. Cash book: To record all transactions in cash or by cheques. Cash book may also be
of two columns.
2. Petty cash book: To record all cash transactions of petty expenses.
3. Purchase day book: To record all transactions of goods purchased on credit.
4. Sales day book: To record all transactions of credit sales of goods.
5. Purchase return book: To record all transactions relating to return of goods to
suppliers.
6. Sales return book: To record all transactions relating to return of goods by the
customers.
7. Bill receivable book: To record all transactions relating to bill receivables.
8. Bill payable book: All transactions relating to the acceptance of bills are recorded in
this book.
9. Journal proper: In journal proper, all transactions other than those recorded above are
recorded.

With regard to entering the transactions in the above books, it is necessary to note the
following points:

1. Goods

Goods can be defined as those items in which the business concern is dealing. It also
means the stock in trade of the business which is purchased with the intention of resale
after conversion or otherwise at a profit.

2. Purchase

Purchase means goods purchased for resale. In other words, it means all goods purchased
for resale or for the purpose of conversion into goods for resale. It does not include
purchase of assets or stationery. It is an error of principle to record purchase of assets or
stationery in the purchase day book.

3. Sales

Sales can be defined as the sale of goods forming stock in trade in which the business
concern is dealing. It does not include sale of assets etc. It is an error of principle to
record the sale of assets in the sales day book.
Cash Book

Cash book is of various types. These are as follows:

1. Simple cash book

2. Cash book with book column
3. Cash book with bank and discount column
4. Multi-column cash book

Simple Cash Book

Only cash receipts and cash payments are recorded in this book. It is just like a ledger,
with left side being the debit side and right side being the credit side. Excess of debit side
over the credit side represents balance of cash in hand. Similarly, the cash book opens
with opening cash in hand as the opening entry on the debit side.

1. Specimen of a Simple Cash Book

Date Receipt CV LF Amt. Date Payments DV LF Amt. Rs.

No. Rs. No.

2. Two Columnar Cash Book

Two columnar cash book contains an additional column for the purpose of entering
transactions relating to bank. All transactions regarding deposits of cash and cheques,
and payment by cheques and withdrawals in cash are entered in the bank column.

3. Three Columnar Cash Book

Three columnar cash book contains an additional column for entering the discount
amount paid and received on account of various transactions. This column dispenses
with the opening of discount column in the ledger.

4. Multi-Columnar Cash Book

Multi-columnar cash book contains various columns for recording the transactions of
receipts and payments under various heads of accounts. This cash book is used more in
schools, colleges, hospitals, government offices etc.

There is no need of opening cash account in the ledger as the cash book serves the
purpose of cash account. However, other accounts which are affected by cash receipts
and payments are posted in the concerned accounts in the ledger.

Petty Cash Book

In any business, a number of transactions are of petty nature involving petty payments. If
the main cash book is used for this, the recording becomes voluminous and heavy,
involving considerable wastage of time. Hence, a petty cash book is maintained in which
all the petty expenses like postage, refreshment, stationery, cartage etc. are recorded.
Petty cash book can also have analytical columns for recording the expenses head wise.
This enables easy posting in the ledger since petty payments are grouped and recorded
head wise under different columns.

Purchase Book

In this book, all credit transactions only relating to the purchases of goods in which the
business is dealing in is recorded. Therefore, purchase of furniture, machinery or other
assets purchased on credit are not recorded in this book.

Purchase Return Book

The purchaser may return the goods which are purchased on credit if he finds these to be
defective or if they are not as per specifications. Such returns are entered in the returns
outward book or purchase returns book. It may be noted that only those transactions
which relate to the goods in which the business is dealing in are recorded in this book.

Sales Book

In this book, all the credit sales transactions relating to the goods dealt with by the
business are recorded. If furniture, machinery or other assets are sold on credit, they are
not recorded in this book.

Sales Return Book

In this book, the return of goods which have been earlier sold on credit is recorded. This
book is also known as returns inward book. Only the transactions relating to the goods
dealt with by the businessmen are recorded.

Bill Receivable Book

The bills which have been drawn by the businessman but accepted by the other party are
known as bill receivable and are entered in this book.

Journal Proper

If a transaction is such that it cannot be recorded in any of the books mentioned above, it
is recorded in a book called journal proper. If a transaction is not related to cash book,
petty cash book, purchase book, purchase return book, sales book, sales return book, bill
receivable book or bill payable book, it is recorded in journal proper. Such transactions
may be related to opening entries, closing entries, transfer entries, rectification entries,
adjusting entries or miscellaneous entries.

Opening Entries

Every year new books of accounts are used. Old books are closed at the end of the year.
When balances of personal and real accounts of old books are recorded in the new
accounting year on the first day in new books, these entries are called opening entries.
Problem

Following balances appeared in the books of Umesh of Tirupati on December 31, 1998.
Pass the necessary opening entries on January 1, 1999.

Credit balance: Capital-- Rs. 20,000, Bills payable-- Rs. 15,000, Creditors-- Rs. 10,000.
Debit balances: Furniture-- Rs. 4,000, Machinery-- Rs. 20,000, Debtors-- Rs. 5,000, Bills
receivable-- Rs. 11,800, Cash-- Rs. 4,200.

Solution

In the books of Mr. Umesh

Journal
Date Particulars L.F. Dr. Cr.
1999 Amount Amount (Rs.)
(Rs.)
Jan.1 Furniture A/c Dr. 4,000
Machinery A/c Dr. 20,000
Debtors A/c Dr. 5,000
Bill Receivable A/c Dr. 11,800
Cash A/c 4,200
Dr. Capital A/c
To 20,000
To Bill Receivable A/c 15,000
To Creditors A/c 10,000
(Being record of last year’s balance
brought forward in new books)

Closing Entries

While closing accounts at the end of the year, balances of nominal accounts are
transferred to trading and profit and loss account. All the balances which are transferred
to trading and profit and loss account at the end of the accounting period through
accounting entries are recorded in journal proper. Such entries are called closing entries.

Following are the examples of closing entries:

1. Closing entries in relation to the trading account are as follows:

a. Trading A/c Dr.

To Purchases A/c
To Wages A/c
To Carriage Inward A/c
To Fuel and Power A/c
To Direct or Manufacturing Expenses A/c
(Being transfer of the above mentioned balance to Trading A/c)

b. Sales A/c Dr.

To Trading A/c
(Being sales during the year)
 c. Closing Stock A/c Dr.
To Trading A/c
(Being value of stock in hand on the closing date of the year)

d. Trading A/c Dr.

To Profit & Loss A/c
(Being transfer of gross profit)
or
e. Profit & Loss A/c Dr.
To Trading A/c
(Being transfer of gross loss)

Only one entry will be made out of above “d.” and “e.”

2. Closing entries in relation to P&L A/c are as follows:

a. Profit & Loss A/c Dr.

To Salaries A/c
To Discount A/c
To Advertising A/c
To Rent and Rates A/c
To Printing and Stationery A/c
To Trade Expenses A/c
To Postage and Telegram A/c
To Insurance Charges A/c
To Carriage Outward A/c
To Other Indirect Expenses A/c
(Being transfer of the above mentioned expenses to Profit and Loss A/c)

b. Discount Received A/c Dr.

To Commission Received A/c
To Interest on Investment A/c
To Other Revenue Receipts and Income A/c
(Being transfer of revenue income to Profit and Loss A/c)

c. Profit and Loss A/c Dr.

To Capital A/c
(Being transfer of net profit to Capital A/c)
or
d. Capital A/c Dr.
To Profit & Loss A/c
(Being transfer of net loss to Capital A/c)

Only one entry will be made out of above “c.” and “d.” If there is net profit, third entry
will be made and if there is net loss, fourth entry will be passed.

Problem 1
Pass the closing entries in the books of Deepak from the following debit and credit
balances which were taken out in December 1998.

Dr.
Cr. (Rs.) (Rs.)
Stock 1,000
Machinery 2,000
Purchases 18,000
Fuel 1,000
Wages 4,000
Factory Lighting 1,000
Discount 800
Salaries 6,000
Discount Received - 200
Office Expenses 3,000
Sales - 30,000
Commission Received - 400
Debtors 10,000
Rates and Taxes 500
Stationary 600
Trade Expenses 200
Carriage Outward 600
Carriage Inward 300
Capital - 18,400
Total 49,000 49,000
Closing Stock Rs. 10,000

Solution
In the books of Deepak

Journal
Date Particulars L.F. Dr. Cr.
1998 Amount (Rs.) Amount (Rs.)
Dec.31 Trading A/c Dr. 4,000
To Stock A/c 20,000
To Purchases A/c 5,000
To Fuel A/c 11,800
To Wages A/c 4,200
To Factory Lighting A/c 20,000
To Carriage Inwards A/c 15,000
(Being record of last year’s balance 10,000
brought forward in new books)
Sales A/c 30,000
Dr. To Trading A/c 30,000
(Being transfer of sales to Trading
A/c)
Closing Stock A/c Dr. 10,000
To Trading A/c 10,000
(Being value of stock-in-hand on the
closing date of the year)
 Trading A/c 14,700
Dr. To Profit and Loss A/c
(Being transfer of gross profit)
Profit & Loss A/c Dr. 11,700
To Salaries A/c 6,000
To Discount A/c 800
To Office Expenses A/c 3,000
To Rates and Taxes A/c 500
To Stationery A/c 600
To Trade Expenses A/c 200
To Carriage Outward A/c 600
(Being transfer of the above
mentioned expenses to Profit and
Loss A/c)
Discount A/c Dr. 200
Commission A/c Dr. 400
To Profit and Loss A/c 600
(Being transfer of revenue income to
Profit and Loss A/c)
Profit and Loss A/c Dr. 3,600
To Capital A/c 3,600
(Being transfer of net profit to
Capital A/c)

1. Rs. (30,000 + 10,000) – 25,300 = Rs. 14,700

2. Rs. (14,700 + 600) – 11,700 = Rs. 3,600

Problem 2

Enter the following transactions in the books of original records of Mr. Khan of Mumbai:

1997
January 1 - Opening balance: Furniture-- Rs. 800, Machinery-- Rs. 2,000, Debtors-- Rs.
1,200, Creditors-- Rs. 3,000, Capital-- Rs. 3,500, Cash in Hand-- Rs. 2,000,
Cash at Bank-- Rs. 500
January 2 - Purchased goods from A on credit Rs. 1,000.
January 4 - Purchased 50 bags of sugar @ Rs. 45 per bag
January 6 - Paid rent Rs. 50
January 7 - Gave Rs. 100 as donation
January 13 - Sold goods to E on credit Rs. 1,000
January 17 - Returned goods to A for Rs. 50
January 18 - Returned goods to B for Rs. 40, E returned goods for Rs. 60.
January 19 - Paid Rs. 400 to B by cheque in full settlement of his accounts
January 20 - Received Rs. 600 from E in cash, Purchased furniture in cash Rs. 400
January 21 - Purchased furniture on credit from Mohan for Rs. 200
January 23 - Sold old furniture on credit to R for Rs. 40
January 24 - Withdrew Rs. 100 for personal use
January 31 - Outstanding wages are Rs. 50 and outstanding salaries are Rs. 200

Solution
 In the books of Mr. Khan

Purchase Book
Date Particulars Ref. L.F. Amount
1997 No. Rs.
Jan.2 A 1,000
Jan.3 B 500
Jan.4 C – 50 Bags of Sugar @ Rs. 40 per bag 2,000
Total 3,500

Purchase Return Book

Date Particulars Ref. L.F. Amount
1997 No. Rs.
Jan.17 A 50
Jan.18 B 40
Total 90

Sales Book
Date Particulars Ref. L.F. Amount
1997 No. Rs.
Jan.5 D – 30 Bags of Sugar @ Rs. 45 per bag. 1,350
Jan.13 E 1,000
Total 2,350

Sales Return Book

Date Particulars Ref. L.F. Amount
1997 No. Rs.
Jan.18 E 60
Total 60

Cash Book
Date Receipts L Di- Cash Bank Date Payments L Di- Cash Bank
1997 F sc. Rs. Rs. 1997 F sc. Rs. Rs.
Jan. Jan.
1 To Bal. b/d 2,000 500 6 By Rent A/c 50
20 To E 600 7 By Donations 100
21 To Cash A/c C 300 19 By B A/c 60 400
22 To Furniture 24 By Furniture 400
A/c 80 By Bank A/c 300
31 By Drawings 100
By Bal. c/d 1,730 400
Total 2,680 800 Total 60 2,680 800

1. Rs. 500 – Returns 40 = Rs. 460

2. Rs. 460 – 400 = Rs. 60

Journal Proper
Date Particular L.F. Dr. Cr.
Amount Amount
 1998 Rs. Rs.
Jan. 1 Furniture A/c Dr. 800
Machinery A/c Dr. 2,000
Debtors A/c 1,200
Dr.
Cash A/c 2,000
Dr.
Bank A/c 500
To
Dr. Creditors A/c 3,000
To Capital A/c 3,500
(Opening entry for the balances in new
books)
Jan. 21 Furniture A/c Dr. 200
To Mohan 200
(Furniture purchased from Mohan)
Jan. 23 R 40
Dr. Furniture A/c
To 40
(Sale of old furniture to R)
Jan. 31 Salaries A/c 200
Dr.
Wages A/c 50
Dr. Outstanding Salaries A/c
To 200
To Outstanding Wages A/c 50
(Salaries and wages outstanding)
Total (Rs.) 6,990 6,990

Summary

1. Following are the two types of ledger:

• General ledger
• Subsidiary ledger

2. The subsidiary ledger is further subdivided into the the following:

• Debtors ledger
• Creditors ledger

3. These subsidiary ledgers contain individual customers and suppliers’ accounts.

4. Posting refers to the recording of transactions from journals to the ledger.
5. Ledger is a book of secondary entries.
6. Balancing refers to the closing of the ledger accounts by putting the balance on the
appropriate side of the account.

Questions

1. Shri Ramesh had Cash at Bank-- Rs. 10,000, Furniture-- Rs. 2,000 and Typewriter of
Rs. 1,500. He started business with these assets on January 01, 1994. His other
transactions during January were as under:

Jan 2 Withdrew cash from bank for office use Rs. 4,000
3 Purchased from Diwan goods for Rs. 5,000 subject to trade discount of 5%
 and issued a cheque for half the amount
5 Sold goods to Ramdas less 2½ % discount for payment of cash in 7
days Rs. 2,250
8 Sold goods for a cheque Rs. 750
11 Received Ramdas’ cheque in settlement of his account and paid it to
bank
11 Purchased furniture of Rs. 800 from Manik in cash
20 Paid Diwan by cheque the amount due
25 Paid life insurance premium of Rs. 250 on the life of Mrs. Ramesh
31 Purchased postal stamps of Rs. 25

Journalize the above transactions, post them to ledger and balance the accounts.

2. Enter the following transactions in the books of original records of M/s A & B Co. of
Mumbai:

1997
January 1 Opening Balance: Furniture-- Rs. 8,000, Machinery-- Rs. 20,000,
Debtors-- Rs. 12,000, Creditors-- Rs. 30,000, Capital-- Rs. 35,000,
Cash in Hand Rs. 20,000, Cash at Bank-- Rs. 5,000
January 2 Purchased goods from Mr. Khan on credit Rs. 10,000
January 4 Purchased 500 bags of sugar @ Rs. 45 per bag
January 6 Paid rent Rs. 500
January 7 Gave Rs. 1,000 as donation
January 13 Sold goods to E on credit Rs. 10,000
January 17 Returned goods to Mr. Khan Rs. 500
January 18 Returned goods to B Rs. 4,000, E returned goods Rs. 600
January 19 Paid Rs. 4,000 to B by cheque in full settlement of his accounts
January 20 Received Rs. 6,000 from E in cash, Purchased furniture in cash Rs.
4,000
January 21 Purchased furniture on credit from Mohan Rs. 2,000
January 23 Sold old furniture on credit to R for Rs. 400
January 24 Withdrew Rs. 1,000 for personal use
January 31 Outstanding wages are Rs. 500 and outstanding salaries are Rs.
2,000