Course Content
Basic Accountancy (Past Paper 2009)
All questions are taken from DAO Exam Part-I (Past Paper 2009)
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Classifying daily basis transactions according to their types
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What is Statement of Financial Position (SOFP)
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Write double-Entry Formula Entries
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Recording Cash Book Transaction
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Journal Entry
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Short Questions
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Find Depreciation: The Time Value of Money
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Reconciliation of Payables and Supplier’s Memorandum Ledger Balances
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Basic Accounting-I (Past Paper 2010)
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Let's Analyze your knowledge with Quiz
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Basic Accounting (Past Paper 2010)
Division Accounts Officer's Examination (Part-I) 2010 paper answers
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Present Journal entries from the enlisted transactions
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Transactions Typically Recorded in a Journal
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Security Aspects of Handling and Storing Money
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Define Bank Reconciliation & draw it benefits
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Bank Reconciliation Example
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Bad debt
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Good internal controls to support an efficient and reliable payroll system
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Replacing Machinery
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Dismantling Costs of Old Machine
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Basic Accounting Help Material
Short definition of the Accounting terms
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Book of Accounts
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Accounting Processes
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Single-entry and Double-entry accounting:
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Financial Statements (Assets, Liabilities, and Shareholders’ Equity)
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Difference between a balance sheet, an income statement and a cash flow statement
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What is the difference between a cash book and a bank statement?
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Course outline for Basic Accounting
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New Accounting Model (Exam-2009)
Books references: 1. Account Code (Volume III). 2. Chart of Accounts (Issued by CGA). 3. Manual Accounting Principles. 4. Accounting Policies and Procedures Manual.
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Select Suitable answers
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Write short notes on the following questions.
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Pass Journal Entries
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Reconciliation of Contractors’ Expenditure in APPM
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Treatment of Replacement Cheques, Unclaimed and Stale Cheques in APPM
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Business Communication (Exam 2009)
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Proposal for the Auditor General of Pakistan
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Write an essay on the new challenges emerging for the auditors
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What type of business skills are used in contract planning, execution, implementation and evaluation?
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Please comment on the following:
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Please comment in short on the following:
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Private: DAO Part-I Examination 2024 (Fresh Candidates) Past Papers
About Lesson

Question

Present the journal entries (with narrative) for the following transactions:-
(a) An entity repays part of a loan amounting to Rs.10,000/-
(b) An entity sells a non-current asset that it had in its books at Rs.12,000/- for the same amount in cash.
(c) An entity sells a piece of equipment that was recorded in the books at Rs.33,000/- for the same amount on credit.
(d) The acquirer of the equipment pays the amount due in cash. Cash that had initially been received from the owners of the business is
(e) used to buy a piece of land for Rs.140,000/-
(f) The entity pays the liability of Rs.25,000/- to the company that built their premises.
(g) An entity acquires a piece of equipment with the value of Rs.10,000/- in exchange for a car

Answer:

Certainly! Let’s present the journal entries (with narrative) for each of the given transactions:

(a) Repayment of Loan (Partial)

  • Narrative: The entity repays part of a loan amounting to Rs.10,000.
  • Journal Entry:
    • Debit: Loan Payable (Liability) = Rs.10,000
    • Credit: Cash/Bank = Rs.10,000

(b) Sale of Non-Current Asset for Cash

  • Narrative: The entity sells a non-current asset that was previously recorded in its books at Rs.12,000 for the same amount in cash.
  • Journal Entry:
    • Debit: Cash/Bank = Rs.12,000
    • Credit: Non-Current Asset (e.g., Equipment) = Rs.12,000

© Sale of Equipment on Credit

  • Narrative: The entity sells a piece of equipment that was recorded in the books at Rs.33,000 for the same amount on credit.
  • Journal Entry:
    • Debit: Accounts Receivable (Trade Receivables) = Rs.33,000
    • Credit: Non-Current Asset (e.g., Equipment) = Rs.33,000

(d) Payment for Acquired Equipment

  • Narrative: The acquirer of the equipment pays the amount due in cash. Cash that had initially been received from the owners of the business is used.
  • Journal Entry:
    • Debit: Cash/Bank = Rs.33,000 (amount due for equipment)
    • Credit: Cash/Bank (initially received from owners) = Rs.33,000

(e) Purchase of Land

  • Narrative: Cash initially received from the owners of the business is used to buy a piece of land for Rs.140,000.
  • Journal Entry:
    • Debit: Land (Non-Current Asset) = Rs.140,000
    • Credit: Cash/Bank = Rs.140,000

(f) Payment of Liability for Premises

  • Narrative: The entity pays the liability of Rs.25,000 to the company that built their premises.
  • Journal Entry:
    • Debit: Premises (Non-Current Asset) = Rs.25,000
    • Credit: Cash/Bank = Rs.25,000

(g) Acquisition of Equipment in Exchange for a Car

  • Narrative: The entity acquires a piece of equipment with a value of Rs.10,000 in exchange for a car.
  • Journal Entry:
    • Debit: Equipment (Non-Current Asset) = Rs.10,000
    • Credit: Car (Non-Current Asset) = Rs.10,000
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