Journal Entries and Ledger
Question and Answer

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Difficulty Rating:

Time limit:
20 minutes


Q: Mr Robert commenced business on 1st January, 2011 with a capital of $100,000 in cash. On the same date he opened the bank account in ADCB and deposited $20,000. During the month of January 2011 the following transactions took place:

Jan 1 Bought goods for cash 70,000

2 Sold goods to Steve Co. (Credit) 38,000

15 Sold goods for cash 9,000

21 Steve Co. paid by cheque 35,000

22 Stationery bill paid by cheque 2,000

22 Telephone bill by cash 500

31 Paid rent by cash 2,000

Paid salaries by cash 3,000

Withdrew cash personal use 5,000

Record journal entries for the transactions and post them to ledgers.



Jan 1 Dr Cash on hand 80,000
Dr Bank 20,000
Cr Capital 100,000

Note that in most accounting questions you won't have to account for "Cash on hand" and "Bank" in separate accounts. In most questions I just combine these into "Bank." But in this question they specifically talk about opening the bank account with $20,000 of the $100,000, which indicates they kept cash on hand in addition to the bank account, which needs to be accounted for.

1 Dr Purchases/Inventory 70,000
Cr Cash on hand 70,000

Note that it's "Purchases" for a periodic system of inventory and "Inventory" if it's the perpetual system. See the tutorial on perpetual and periodic inventory for more information.

2. Dr Debtors 38,000
Cr Sales 38,000

15. Dr Cash on hand 9,000
Cr Sales 9,000

21. Dr Bank 35,000
Cr Debtors 35,000

22. Dr Stationery expense 2,000
Cr Bank 2,000

22. Dr Telephone expense 500
Cr Cash on hand 500

31. Dr Rent expense 2,000
Cr Cash on hand 2,000

31. Dr Salaries 3,000
Cr Cash on hand 3,000

31. Dr Drawings 5,000
Cr Cash on hand 5,000

basic accounting exercise book


Cash on hand Bank T-accounts

Capital Purchases Inventory Debtors Control T-accounts

Sales Stationery Telephone Rent Expenses T-accounts

Salaries Expense Drawings T-accounts

There you go. Hope you enjoyed this detailed journal entries and ledger question and answer.

Thanks to Kay Khine, Kong Chenda and others for contributions in the Comments section below that helped solve this question!

Good luck with your studies!

- Michael Celender
Founder of Accounting Basics for Students

Tutorials relating to this Journal Entries and Ledger Question and Answer: Find more free exercises like this on the Full Accounting Questions and Answers page.

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Comments for Journal Entries and Ledger
Question and Answer

Click here to add your own comments

Journal entries
by: Anonymous

1. The following accounts appear in the general ledger of ABC Company on 31st December 2018:
Sales sh. 50,000,000 Accounts receivable 1,500,000
Allowance for doubtful accounts 10,000Dr

Prepare journal entries to recognize doubtful accounts expense for each of the independent assumptions below:

i) The allowance for doubtful accounts is increased to a balance of sh. 25,000.

To be honest this is a really weird question because the allowance for doubtful debts always has a credit balance (not a debit balance). But let's just assume that's possible and all good for purposes of this question.

The journal entry I would do to increase the allowance for doubtful debts from 10,000 debit balance to 25,000 credit balance would be:

DEBIT Bad Debts (expense) 35,000
CREDIT Allowance for doubtful accounts 35,000

Hope that helps!

Michael Celender
Founder of Accounting Basics for Students

Clear my confusion please - Journal for Capital
by: Farrukh Shah

The question is: A man started business with Rs.50,000.

Now the problem is what are the double entries.. If there is nothing written Cash or bank so we will make the entry of bank thats what IAS says?

A: You will find the answer to your question in this tutorial on the journal entry for equity / capital investment.

Good luck!

Michael C.
Founder of Accounting Basics for Students

by: Reza

Helped me a lot. Thank you very much.

You are welcome Reza.

Founder of

Journal Entry - Services Rendered on Account
by: Anonymous

Services were performed for customers on account, rs. 4,200.

See this tutorial on income on account, which includes the basic journal entry and explanations.

Michael C.
Founder of Accounting Basics for Students

by: Caren Blessings

Thank you so much for your great help. I have received greater knowledge on ledgers, may God bless you so much as you continue to help many by sharing and not keeping it to yourself. THANK YOU!

by: Ram

Thanks for your useful sum and keep on posting like this small sums sir it will be useful for basic learners

Journal Entries - Payroll
by: Brenda

Thank you for your help, but I wonder if you can help me with this question.

The payroll report of staff salaries for xy company for October 2008 shows the following details:
Basic salary: 180,000
Other allowances: 36000
Gross pay: 216000
Employer social security contribution: 10800
Employee social security contribution: 6450.

Prepare the necessary journal entries for the above payroll.

Thank u so much u have saved me from failing God bless u keep on helping us
by: Yvonne

Thank you very much Very appreciate to Ur hard work God bless u

by: Anonymous

cheque received and cheque paid to bank

Post to Ledger Account
by: Kay Khine

1-1-2011 Cash On Hand $100,000 Dr
Capital $100,000 Cr

1-1-2011 ADCB Bank $20,000 Dr
Cash On Hand $20,000 Cr

1-1-2011 Inventories $70,000 Dr
Cash On Hand $70,000 Cr

2-1-2011 A/R (Steve Co.) $38,000 Dr
Sales $38,000 Cr

15-1-2011 Cash On Hand $9,000 Dr
Sales $9,000 Cr

21-1-2011 ADCB Bank $35,000 Dr
A/R (Steve Co.) $35,000 Cr

22-1-2011 Stationery $2,000 Dr
ADCB Bank $2,000 Cr

22-1-2011 Telephone $500 Dr
Cash On Hand $500 Cr

31-1-2011 Rent $2,000 Dr
Cash On Hand $2,000 Cr

31-1-2011 Salaries $3,000 Dr
Cash On Hand $3,000 Cr

31-1-2011 Withdraw $5,000 Dr
Cash On Hand $5,000 Cr

All of ledger posting finished.

journal entries
by: Veronika

this is a big huge help. i have needed to run through things and revise. it has simplified my practice big time. i'm so appreciative

You're welcome Veronika!

- Michael

How to Post These Entries?
by: Friend

whatever you did is great but my question is HOW DO U POST THESE ENTRIES?

I just added all the T-accounts above so there is the full solution now.

- Michael

General Journal (incomplete)
by: .....

Date: Particulars Debit Credit
Jan.1 Cash 100000
Capital 100000
Goods 70000
Cash 70000
To record the initial
transaction of mr. Robert
2 Accounts Recievable 38000
Revenue 38000
15 Cash 9000
Revenue 9000
21 Check 35000
Accounts Recievable 35000
22 Expenses 2000
Check 2000
Utilities Expense 500
Cash 500
31 Rent Expense 2000
Cash 2000
Salaries Expense 3000
Cash 3000
Drawing 5000
Cash 5000

by: Muny

Jan 1 Goods 70,000
Cash 70,000
Jan 2 Cash 38,000
A/P 38,000
Jan 15 Cash 9,000
Goods 9,000
Jan 21 A/R 35,000
Check 35,000
Jan 22 Stationery 2,000
Check 2,000
Jan 22 Telephone 500
Cash 500
Jan 31 Rent 2,000
Cash 2,000
Salary 3,000
Cash 3,000
Cash 5,000
Withdrew 5,000

student. In India
by: John woja

Thank you so much. I found it helpful to me. God bless you.

Glad to hear and you're most welcome!

- Michael

by: Anonymous


journal entries and post to ledger account
by: Kong chenda

I. Make journal entries :

Jan 01. Cash on hand.....80,000.00
Cash in bank.....20,000.00
To record investment by owner.

01. Inventory.........70,000.00
Cash on hand...............70,000.00
To record purchase inventory for cash.

02. A/R................38,000.00
Sales revenue..............38,000.00
To record sold merchandise on credit.

15. Cash on hand............9,000.00
Sales revenue..................9,000.00
To record sold merchandise for cash.

21. Cash..............35,000.00
To record received payment from customer.

22. Stationery...............2,000.00
Cash in bank...................2,000.00
To record purchase stationery for cash.

22. Telephone expense..........500.00
Cash on hand .................500.00
To record paid for telephone.

31. Rent expense...........2,000.00
Cash on hand ................2,000.00
To record paid rent.

31. Salaries expense......3,000.00
Cash on hand................3,000.00
To record paid for salaries.

31. Withdraw.............5,000.00
Cash on hand................5,000.00
To record withdraw by owner.

II. Post to Ledger account.

For ledger I did already but I can't put the table so small here...

by: Anonymous


by: Anonymous

how do I do the posting?

Posting to T-accounts now shown above. Enjoy!

- Michael

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