Question No 1 Mr. Omer started business on 1st January 2010 with Rs. 20,000 asca

Question

Question No 1
Mr. Omer started business on 1st January 2010 with Rs. 20,000 ascapital. Below
mentioned are the transactions which took place in the month ofJanuary. ‘
a) Opened bank account with Rs. 20,000.
b) Goods are purchased from Wasiq on credit for Rs. 10,000.
c) Sold goods on credit to Munir worth Rs. 1,500
d) Purchase goods on cash for Rs. 1,000.
e) Cash sales to Adnan worth Rs. 1,000.
f) Machinery purchased and made payment by cheque Rs. 6,700
g) Borrowed Rs. 3,000 from Munir.
h) Paid rent to Waris Rs. 100 for the building in which business issituated.
i) Paid salary to clerks Rs. 150.
j) Amir withdraw Rs. 500 for his personal use.
Fill this table after reading these instructions:
For easy application of the above mentioned rules take eachtransaction separately and
ask yourself the following question:-
a) Describe the nature of accounts affected in each transaction?(Inthis you have to
see Assets, Liabilities, expense, Income, Capital or equity)
b) Which of the item is to be debited or credited?
c) Give reasons of debit and credit.
| Transaction No   | Nature of account | A/C to beDebited| A/C to beCredited | Reasons
Transaction No
Nature of Account
A/C to be Debited
A/C to be Credited
Reasons
Transaction No
Nature of Account
A/C to be Debited
A/C to be Credited
Reasons

Explanation / Answer

I am only providing hints: _____________________________________________________ Debit    Bank       20,000                                 Assets Credit      OmerCapital                                                      Equity ______________________________________________________ Debit   Purchases      10,000                           Expenses Credit      Accounts Payables -Wasiq                                 Liabilities _______________________________________________________ Debit    Accounts Recivables -Munir   1,500    Assets Credit      SalesRevenue                                                      Revenue _______________________________________________________ Debit    Purchases         1,000                         Expenses         Credit    Cash                                                                     Assets ________________________________________________________ Debit   Cash                  1,000                        Assets Credit     SalesRevenue                                                         Revenue ________________________________________________________ Debit      Machinery         6,700                        Assets Credit         Bank                                                                    Assets _________________________________________________________ Debit      Cash                  3,000                     Assets Credit       Loan fromMunir                                                      Liabilities __________________________________________________________ Debit        Rentexpense      100                        Expenses Credit         Cash                                                                        Assets ___________________________________________________________ Debit      Salaries                  150                     Expenses Credit         Cash                                                                        Assets ___________________________________________________________ Debit     Omer'sDrawings   500   (Amir Or Omer ?)Equity Credit         Cash                                                                        Assets ____________________________________________________________       

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