Managerial Accounting

Questions compiled by: Prof. CA Priya Satish Goud

Topic: Journal
Question-Solving Plan

Particulars No. of Questions

Questions to be solved in the classroom (CQ) -Mandatory 7
Homework question (HQ) - Mandatory 5
Questions for extra practice of the students (EQ) - Optional 8
Total 20

Example 1: CQ
Mr. A started his garment business and made the following transactions:
1. Started business with cash ₹5,00,000.
2. Purchased furniture ₹1,20,000.
3. Paid salary ₹1,10,000.
4. Paid Rent ₹1,15,000.
5. Received Interest ₹2,00,000.
6. Purchases made ₹1,00,000.
7. Sales ₹3,00,000.
8. Paid for insurance ₹ 15,000.
9. Purchased stationery ₹10,000.
Example 2: CQ
Prepare the necessary journal entries for each transaction after clearly identifying the accounts
affected, whether there is a debit or credit, and the amount. :
1) On July 1, 2024, the company purchased raw materials worth ₹10,000 on credit from
Supplier A.
2) On July 5, 2024, the company paid ₹3,000 in cash for utility bills for the month of June.
3) On July 10, 2024, the company sold finished goods to a customer for ₹15,000 on credit.
The cost of goods sold for this transaction was ₹8,000.
4) On July 15, 2024, the company received ₹5,000 cash from the customer for the sale
made on July 10.
 5) On July 20, 2024, the company paid ₹6,000 in cash for salaries and wages for the month.
6) On July 27, 2024, the company received ₹7,500 from bank as a loan.
Example 3: CQ
Assume you are the accountant for a retail company operating in India. Below are 10
transactions that occurred during the month of July 2024. Prepare journal entries for each
transaction:
1) July 1, 2024: Purchased inventory worth ₹50,000 on credit from Supplier A.
2) July 3, 2024: Sold goods to Customer B for ₹30,000 cash. The cost of goods sold was
₹20,000.
3) July 5, 2024: Paid ₹15,000 in cash for rent for the month.
4) July 7, 2024: Received ₹25,000 in cash from Customer C for services provided.
5) July 10, 2024: Purchased office supplies worth ₹10,000 on credit from Supplier D.
6) July 12, 2024: Paid ₹5,000 in cash for repair and maintenance expenses.
7) July 15, 2024: Sold goods to Customer E on credit for ₹40,000. The cost of goods sold was
₹25,000.
8) July 18, 2024: Paid ₹12,000 in cash for salaries and wages for the month.
9) July 20, 2024: Received ₹30,000 in cash from Customer B as partial payment for the sale
made on July 3.
10) July 25, 2024: Settled the account with Supplier A by paying ₹45,000 in cash.
Example 4: CQ
You are the accountant for a consulting firm in India. Below are 10 transactions that occurred
during the month of August 2024. Prepare journal entries for each transaction:
1) August 1, 2024: Received ₹50,000 cash from a client for services to be rendered over
the next two months.
2) August 3, 2024: Purchased office equipment for ₹80,000 on credit from Supplier A.
3) August 5, 2024: Paid ₹15,000 in cash for monthly rent.
4) August 7, 2024: Billed a client ₹60,000 for consulting services provided. The amount
is to be received in two months.
5) August 10, 2024: Received ₹30,000 cash from another client as an advance for
upcoming consulting services.
6) August 12, 2024: Purchased stationery and office supplies worth ₹5,000 on credit from
Supplier B.
7) August 15, 2024: Paid ₹25,000 in cash for salaries and wages for the month.
 8) August 18, 2024: Provided consulting services to a client and invoiced ₹40,000.
Payment is expected within 15 days.
9) August 20, 2024: Settled the debt with Supplier A by paying ₹50,000 in cash.
10) August 25, 2024: Received ₹20,000 in cash from a client as a partial payment for
services billed on August 7.
Example 5: HQ
You are the accountant for a small retail store in India. Below are seven transactions that
occurred during the month of September 2024. Prepare journal entries for each transaction:
1) September 1, 2024: Purchased inventory worth ₹20,000 on credit from Supplier A.
2) September 5, 2024: Sold goods to Customer B for ₹15,000 cash. The cost of goods sold
was ₹10,000.
3) September 7, 2024: Paid ₹5,000 in cash for rent for the month.
4) September 10, 2024: Received ₹8,000 in cash from Customer C for services provided.
5) September 15, 2024: Purchased office supplies worth ₹3,000 on credit from Supplier
D.
6) September 20, 2024: Paid ₹2,000 in cash for repair and maintenance expenses.
7) September 25, 2024: Sold goods to Customer E on credit for ₹25,000. The cost of goods
sold was ₹18,000.
Example 6: HQ
You are the accountant for a consulting firm in India. Below are seven transactions that
occurred during the month of October 2024. Prepare journal entries for each transaction:
1) October 1, 2024: Received ₹30,000 cash from a client for services to be rendered over
the next month.
2) October 3, 2024: Purchased office equipment for ₹50,000 on credit from Supplier A.
3) October 5, 2024: Paid ₹10,000 in cash for monthly rent.
4) October 7, 2024: Billed a client ₹40,000 for consulting services provided. The amount
is to be received in two months.
5) October 10, 2024: Received ₹20,000 cash from another client as an advance for
upcoming consulting services.
6) October 15, 2024: Purchased stationery and office supplies worth ₹4,000 on credit from
Supplier B.
7) October 20, 2024: Paid ₹15,000 in cash for salaries and wages for the month.
Example 7: HQ
Imagine you are tasked with recording transactions for a newly established business, "Sunrise
Traders," for the month of June 2024. The following transactions occurred during the month:
1) June 1: Started the business with ₹50,000 cash and ₹150,000 in bank account.
2) June 5: Purchased goods on credit from Sky Enterprises for ₹30,000.
3) June 10: Sold goods for cash amounting to ₹25,000.
4) June 15: Paid rent for the shop premises, ₹10,000.
5) June 20: Received ₹28,000 from debtors on account.
6) June 25: Paid Sky Enterprises ₹25,000 against the outstanding amount.
7) June 28: Withdrew ₹15,000 for personal use from the bank.
8) June 30: Depreciation on office furniture is ₹2,000.
Prepare journal entries for the above transactions in the books of Sunrise Traders for the month
of June 2024.
Example 8: CQ
You have been given the following data with respect to Colourful Ltd. You are required to
establish accounting equation for the given transactions:
1) Started business with cash ₹500000.
2) Borrowed ₹450000.
3) Withdrew cash from business ₹300000.
4) Loan repaid ₹200000.
5) Bought furniture for ₹150000.
6) Purchased inventory for ₹500000 in credit.
7) Sold inventory of ₹250000 in cash.
Example 9: CQ
An individual, Ramesh, started a new business called "Ramesh Enterprises" on January 1,
2024. He performs the following transactions during the first month:
January 1, 2024: Ramesh invests ₹500,000 in cash into the business.
January 3, 2024: The business purchases office equipment worth ₹150,000 in cash.
January 5, 2024: The business takes a bank loan of ₹200,000.
January 10, 2024: Ramesh pays ₹30,000 in cash for office rent.
January 15, 2024: The business sells goods for ₹100,000 on credit.
January 20, 2024: The business receives ₹60,000 in cash from the customers for the sales made
on January 15.
January 25, 2024: The business pays ₹15,000 in cash for utilities.
Required:
1) Prepare the accounting equation (Assets = Liabilities + Owner’s Equity) after each
transaction.
2) Determine the final balances for Assets, Liabilities, and Owner’s Equity at the end of January
2024.
Example 10: CQ
On February 1, 2024, Anjali started a business called "Anjali Trading Co." with the following
transactions in the first month:
February 1, 2024: Anjali invests ₹300,000 in cash and ₹100,000 worth of inventory into the
business.
February 5, 2024: The business purchases additional inventory worth ₹50,000 on credit.
February 8, 2024: The business sells goods worth ₹80,000, with ₹40,000 received in cash and
the remainder on credit.
February 12, 2024: The business pays ₹20,000 in cash for a utility bill.
February 15, 2024: Anjali withdraws ₹10,000 in cash from the business for personal use.
February 20, 2024: The business pays ₹30,000 in cash to settle part of the accounts payable
from the February 5 purchase.
Required:
Prepare the accounting equation (Assets = Liabilities + Owner’s Equity) after each transaction.
Determine the final balances for Assets, Liabilities, and Owner’s Equity at the end of February
2024.
Example 11: HQ
On March 1, 2024, Raj started a new business named "Raj's Essentials." He records the
following transactions during the month:
March 1, 2024: Raj invests ₹100,000 in cash into the business.
March 3, 2024: The business buys office supplies worth ₹20,000 in cash.
March 7, 2024: The business sells products for ₹30,000 in cash.
March 10, 2024: The business pays ₹5,000 in cash for utility bills.
March 15, 2024: The business receives ₹10,000 in cash from customers for a sale made on
credit.
Required:
1) Prepare the accounting equation (Assets = Liabilities + Owner’s Equity) after each
transaction.
2) Determine the final balances for Assets, Liabilities, and Owner’s Equity at the end of March
2024.
Example 12: HQ
On April 1, 2024, Meena started a business named "Meena's Crafts." She records the following
transactions during the month:
April 1, 2024: Meena invests ₹50,000 in cash into the business.
April 3, 2024: The business purchases craft supplies worth ₹15,000 in cash.
April 7, 2024: The business sells craft items for ₹25,000 in cash.
April 10, 2024: The business pays ₹5,000 in cash for rent.
April 15, 2024: The business receives ₹10,000 in cash from customers for a sale made on credit.
Required:
Prepare the accounting equation (Assets = Liabilities + Owner’s Equity) after each transaction.
Determine the final balances for Assets, Liabilities, and Owner’s Equity at the end of April
2024.
Example 13: EQ
Company ABC started its business with the following transactions in January 2024:
1) Invested ₹50,000 in cash.
2) Purchased office equipment for ₹15,000 in cash.
3) Purchased inventory on credit worth ₹10,000.
4) Paid ₹2,000 for utilities.
5) Sold inventory worth ₹12,000 for cash.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 14: EQ
Company XYZ had the following transactions in February 2024:
1) Received ₹20,000 from a customer for services to be provided.
2) Paid ₹5,000 for rent.
3) Purchased supplies worth ₹3,000 on credit.
4) Provided services worth ₹12,000 on credit.
5) Paid ₹1,000 for office expenses.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 15: (EQ)
MNO Traders had these transactions in March 2024:
1) Invested ₹30,000 in cash.
2) Purchased inventory worth ₹20,000, paying ₹5,000 in cash and the rest on credit.
3) Sold goods worth ₹25,000, receiving ₹15,000 in cash and the rest on credit.
4) Paid ₹2,000 for advertising.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 16: EQ
PQR Enterprises experienced the following transactions in April 2024:
1) Invested ₹40,000 in cash.
2) Bought office furniture for ₹10,000 in cash.
3) Received ₹8,000 from a debtor.
4) Paid ₹3,000 for electricity.
5) Took a loan of ₹12,000 from a bank.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 17: (EQ)
RST Limited had these transactions in May 2024:
1) Invested ₹60,000 in cash.
2) Purchased raw materials worth ₹20,000 on credit.
3) Paid ₹7,000 for salaries.
4) Sold goods worth ₹18,000, receiving ₹10,000 in cash and the rest on credit.
5) Paid ₹2,500 for repairs.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 18: (EQ)
LMN Co. experienced the following transactions in June 2024:
 1) Invested ₹25,000 in cash.
2) Purchased machinery for ₹15,000 in cash.
3) Paid ₹4,000 for rent.
4) Sold services worth ₹30,000 on credit.
5) Collected ₹10,000 from debtors.
Required:

1) Record these transactions in the journal.

2) Show the impact on the accounting equation.
Example 19: (EQ)
UVW Ltd. had these transactions in July 2024:
1) Invested ₹35,000 in cash.
2) Purchased inventory worth ₹10,000 in cash.
3) Received ₹7,000 from a customer in advance.
4) Paid ₹2,500 for insurance.
5) Sold goods worth ₹20,000, receiving ₹12,000 in cash and the rest on credit.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.
Example 20: (EQ)
JKL Inc. recorded the following transactions in August 2024:
1) Invested ₹45,000 in cash.
2) Purchased office supplies worth ₹5,000 on credit.
3) Paid ₹6,000 for salaries.
4) Sold products worth ₹25,000, receiving ₹15,000 in cash and the rest on credit.
5) Paid ₹1,500 for maintenance.
Required:
1) Record these transactions in the journal.
2) Show the impact on the accounting equation.

It is advised that the students also solve the questions given in the prereading
material. If any student faces any difficulties, they are advised to contact me
through e-mail. We can have a one-to-one discussion depending on the
engagements at that point of time.
E-mail ID: [email protected]