Exercise Solutions Available
Step-by-step answers for all textbook questions in this chapter
How to Use This Solutions Page
This page provides complete NCERT solutions for CBSE Class 11 Accountancy Chapter 3 — Recording of Transactions I. Follow these steps for best results:
1. Read the NCERT textbook chapter first. Understand source documents, voucher types, debit-credit rules, and the journal format. 2. Attempt every question on your own before reading the solution. 3. For journal entry questions, identify the accounts, classify them (Personal/Real/Nominal), apply the rules, then write the entry. 4. Compare your answer with the solution. Check the narration, account names, and amounts. 5. Re-attempt wrong entries after one day without looking at the solution.
| For journal entries, the proper format is used throughout: Date | Particulars | L/F | Debit (Rs) | Credit (Rs). Each entry includes a narration. |
|---|
Key Concepts Recap
Before solving the exercise, revise these key points:
- Source documents: Written evidence of transactions — invoice, receipt, cheque, debit note, credit note, cash memo, pay-in-slip.
- Accounting vouchers: Authorise recording — debit voucher (cash payment), credit voucher (cash receipt), transfer/journal voucher (non-cash), compound voucher (multiple debits/credits).
- Rules of debit and credit:
- Personal: Debit the receiver, Credit the giver.
- Real: Debit what comes in, Credit what goes out.
- Nominal: Debit all expenses/losses, Credit all incomes/gains.
- Journal format: Date | Particulars | L/F | Debit Rs | Credit Rs.
- Trade discount: Not recorded — deducted from list price.
- Cash discount: Recorded — Discount Allowed (debit), Discount Received (credit).
- Opening entry: Debit all assets, credit all liabilities, credit capital (balancing figure).
Intext Questions
Intext Question 1
Q: What is a source document? Give two examples.
A source document is a written document that provides evidence that a business transaction has taken place. It is the starting point of the accounting process and serves as the basis for preparing accounting vouchers.
Examples: 1. Invoice (Bill): Prepared by the seller when goods are sold on credit. It contains details like the name of the buyer, description of goods, quantity, rate, total amount, and terms of payment. 2. Receipt: Issued when cash is received. It acknowledges payment and contains the date, amount, name of the payer, and reason for payment.
Intext Question 2
Q: State the three rules of debit and credit.
1. Personal Accounts: Debit the receiver, Credit the giver. 2. Real Accounts: Debit what comes in, Credit what goes out. 3. Nominal Accounts: Debit all expenses and losses, Credit all incomes and gains.
Intext Question 3
Q: What is an accounting voucher? Name its types.
An accounting voucher is a written document that authorises the recording of a transaction in the books of accounts. It is prepared on the basis of source documents.
Types of accounting vouchers:
1. Debit Voucher: Prepared when cash is paid out (e.g., payment of rent, payment to creditors). 2. Credit Voucher: Prepared when cash is received (e.g., receipt from debtors, cash sales). 3. Transfer Voucher (Journal Voucher): Prepared for non-cash transactions (e.g., credit purchases, credit sales, depreciation). 4. Compound Voucher: Prepared when a transaction involves more than one debit or more than one credit.
Intext Question 4
Q: Distinguish between a debit note and a credit note.
| Basis | Debit Note | Credit Note |
|---|---|---|
| Sent by | Buyer | Seller |
| When sent | When goods are returned to the seller (purchase return) | When goods are returned by the buyer (sales return) |
| Purpose | To inform the seller that the buyer's account has been debited | To inform the buyer that the seller's account has been credited |
| Also called | Purchase return note | Sales return note |
| Colour (common practice) | Usually blue/red | Usually red/green |
| Effect | Reduces the amount payable to the seller | Reduces the amount receivable from the buyer |
Intext Question 5
Q: What is a journal? State its format.
A journal is the book of original entry (book of prime entry) where every business transaction is recorded in chronological order. It is the first place where transactions are recorded after being identified and measured.
Format of a Journal:
| Date | Particulars | L/F | Debit Amount (Rs) | Credit Amount (Rs) |
|---|---|---|---|---|
In the Particulars column, the account to be debited is written first (without "To"), then the account to be credited is written below with the prefix "To" and indented. A brief narration is written in brackets after the credit entry.
Chapter-End Exercise Questions
Exercise Question 1
Q: Journalise the following transactions in the books of Mr Ramesh:
1. Ramesh started business with cash Rs 3,00,000 2. Purchased goods for cash Rs 50,000 3. Sold goods for cash Rs 70,000 (cost Rs 45,000) 4. Purchased goods on credit from Suresh Rs 30,000 5. Sold goods on credit to Mohan Rs 25,000 6. Paid rent Rs 8,000 7. Received from Mohan Rs 24,500 in full settlement 8. Paid to Suresh Rs 29,000 in full settlement 9. Paid salary Rs 12,000 10. Withdrew cash for personal use Rs 5,000
| Date | Particulars | L/F | Debit (Rs) | Credit (Rs) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 1 | Cash A/c Dr. | 3,00,000 | ||||||||
| To Capital A/c | 3,00,000 | |||||||||
| (Being business started with cash) | ||||||||||
| Apr 3 | Purchases A/c Dr. | 50,000 | ||||||||
| To Cash A/c | 50,000 | |||||||||
| (Being goods purchased for cash) | ||||||||||
| Apr 5 | Cash A/c Dr. | 70,000 | ||||||||
| To Sales A/c | 70,000 | |||||||||
| (Being goods sold for cash) | ||||||||||
| Apr 7 | Purchases A/c Dr. | 30,000 | ||||||||
| To Suresh A/c | 30,000 | |||||||||
| (Being goods purchased on credit from Suresh) | ||||||||||
| Apr 9 | Mohan A/c Dr. | 25,000 | ||||||||
| To Sales A/c | 25,000 | |||||||||
| (Being goods sold on credit to Mohan) | ||||||||||
| Apr 11 | Rent A/c Dr. | 8,000 | ||||||||
| To Cash A/c | 8,000 | |||||||||
| (Being rent paid) | ||||||||||
| Apr 13 | Cash A/c Dr. | 24,500 | ||||||||
| Discount Allowed A/c Dr. | 500 | |||||||||
| To Mohan A/c | 25,000 | |||||||||
| (Being cash received from Mohan, discount allowed Rs 500) | ||||||||||
| Apr 15 | Suresh A/c Dr. | 30,000 | ||||||||
| To Cash A/c | 29,000 | To Discount Received A/c | 1,000 | |||||||
| (Being cash paid to Suresh, discount received Rs 1,000) | ||||||||||
| Apr 17 | Salary A/c Dr. | 12,000 | ||||||||
| To Cash A/c | 12,000 | |||||||||
| (Being salary paid) | ||||||||||
| Apr 20 | Drawings A/c Dr. | 5,000 | ||||||||
| To Cash A/c | 5,000 | |||||||||
| (Being cash withdrawn by owner for personal use) |
Exercise Question 2
Q: Journalise the following transactions:
1. Started business with cash Rs 1,00,000 and goods Rs 40,000 2. Purchased furniture for Rs 15,000 and paid by cheque 3. Sold goods costing Rs 20,000 for Rs 28,000 to Anil on credit 4. Received Rs 27,500 from Anil in full settlement 5. Purchased goods from Sunil listed at Rs 30,000 at 10% trade discount 6. Paid Rs 26,460 to Sunil in full settlement (cash discount 2%) 7. Paid wages Rs 4,000 8. Returned goods worth Rs 3,000 to Sunil
| Date | Particulars | L/F | Debit (Rs) | Credit (Rs) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 1 | Cash A/c Dr. | 1,00,000 | ||||||||
| Purchases A/c Dr. | 40,000 | |||||||||
| To Capital A/c | 1,40,000 | |||||||||
| (Being business started with cash and goods) | ||||||||||
| Apr 3 | Furniture A/c Dr. | 15,000 | ||||||||
| To Bank A/c | 15,000 | |||||||||
| (Being furniture purchased and paid by cheque) | ||||||||||
| Apr 5 | Anil A/c Dr. | 28,000 | ||||||||
| To Sales A/c | 28,000 | |||||||||
| (Being goods sold on credit to Anil) | ||||||||||
| Apr 7 | Cash A/c Dr. | 27,500 | ||||||||
| Discount Allowed A/c Dr. | 500 | |||||||||
| To Anil A/c | 28,000 | |||||||||
| (Being cash received from Anil, discount allowed Rs 500) | ||||||||||
| Apr 10 | Purchases A/c Dr. | 27,000 | ||||||||
| To Sunil A/c | 27,000 | |||||||||
| (Being goods purchased from Sunil less 10% trade discount; 30,000 - 3,000 = 27,000) | ||||||||||
| Apr 12 | Sunil A/c Dr. | 27,000 | ||||||||
| To Cash A/c | 26,460 | To Discount Received A/c | 540 | |||||||
| (Being cash paid to Sunil, discount received 2% on Rs 27,000 = Rs 540) | ||||||||||
| Apr 14 | Wages A/c Dr. | 4,000 | ||||||||
| To Cash A/c | 4,000 | |||||||||
| (Being wages paid) | ||||||||||
| Apr 16 | Sunil A/c Dr. | 3,000 | ||||||||
| To Purchase Return A/c | 3,000 | |||||||||
| (Being goods returned to Sunil) |
Exercise Question 3
Q: Prepare an opening entry from the following balances:
Cash Rs 40,000, Bank Rs 60,000, Stock Rs 25,000, Debtors Rs 35,000, Furniture Rs 20,000, Machinery Rs 1,00,000, Creditors Rs 30,000, Bank Loan Rs 50,000.
First, calculate Capital:
Total Assets = Cash 40,000 + Bank 60,000 + Stock 25,000 + Debtors 35,000 + Furniture 20,000 + Machinery 1,00,000 = Rs 2,80,000
Total Liabilities = Creditors 30,000 + Bank Loan 50,000 = Rs 80,000
Capital = Total Assets - Total Liabilities = 2,80,000 - 80,000 = Rs 2,00,000
Opening Entry:
| Date | Particulars | L/F | Debit (Rs) | Credit (Rs) |
|---|---|---|---|---|
| Apr 1 | Cash A/c Dr. | 40,000 | ||
| Bank A/c Dr. | 60,000 | |||
| Stock A/c Dr. | 25,000 | |||
| Debtors A/c Dr. | 35,000 | |||
| Furniture A/c Dr. | 20,000 | |||
| Machinery A/c Dr. | 1,00,000 | |||
| To Creditors A/c | 30,000 | |||
| To Bank Loan A/c | 50,000 | |||
| To Capital A/c | 2,00,000 | |||
| (Being opening balances brought forward) |
Exercise Question 4
Q: What are source documents? Explain any four.
Source documents are written evidences of business transactions that provide the basis for recording entries in the books of accounts.
1. Invoice (Bill): Prepared by the seller when goods are sold on credit. It contains the buyer's name, description of goods, quantity, rate, total amount, and terms of payment. The original goes to the buyer; the duplicate is retained by the seller. It serves as evidence of credit sales/purchases.
2. Receipt: Issued when cash is received. It acknowledges payment and contains the date, amount, name of the payer, and reason for payment. The original goes to the payer; the duplicate is kept by the receiver.
3. Cheque: A written order by the account holder directing the bank to pay a specified sum to the person named. Types include bearer cheque (payable to bearer), order cheque (payable to a specific person), and crossed cheque (must be deposited in a bank account).
4. Debit Note: Sent by the buyer to the seller when goods are returned (purchase return) or when the buyer is to be charged an additional amount. It informs the seller that the buyer's account has been debited. Also called a purchase return note.
Exercise Question 5
Q: Explain the rules of debit and credit with examples.
There are three types of accounts, each with its own rule:
1. Personal Accounts (accounts of persons, firms, institutions):
Rule: Debit the receiver, Credit the giver.
- When a person receives something from the business, his account is debited.
- When a person gives something to the business, his account is credited.
Example: Ram pays Rs 5,000 to the business. Ram is the giver, so Ram's account is credited. Cash comes in, so Cash A/c is debited. Entry: Cash A/c Dr. Rs 5,000, To Ram A/c Rs 5,000.
2. Real Accounts (accounts of assets):
Rule: Debit what comes in, Credit what goes out.
- When an asset comes into the business, its account is debited.
- When an asset goes out of the business, its account is credited.
Example: Furniture purchased for Rs 10,000 cash. Furniture comes in (debited); Cash goes out (credited). Entry: Furniture A/c Dr. Rs 10,000, To Cash A/c Rs 10,000.
3. Nominal Accounts (accounts of expenses, losses, incomes, gains):
Rule: Debit all expenses and losses, Credit all incomes and gains.
- Expenses and losses are debited.
- Incomes and gains are credited.
Example: Rent paid Rs 5,000. Rent is an expense (debited); Cash goes out (credited). Entry: Rent A/c Dr. Rs 5,000, To Cash A/c Rs 5,000.
Example: Commission received Rs 2,000. Commission is an income (credited); Cash comes in (debited). Entry: Cash A/c Dr. Rs 2,000, To Commission A/c Rs 2,000.
Exercise Question 6
Q: Distinguish between trade discount and cash discount.
| Basis | Trade Discount | Cash Discount |
|---|---|---|
| When allowed | At the time of sale/purchase | At the time of payment (before due date) |
| Purpose | To encourage bulk purchases | To encourage prompt/early payment |
| Recording in books | Not recorded separately; deducted from list price | Recorded — Discount Allowed A/c (debit), Discount Received A/c (credit) |
| Who allows | Seller/Supplier | Seller to buyer for early payment |
| Calculation | On list price | On net amount (after trade discount) |
| Vary with time | May vary with quantity ordered | Usually a fixed percentage |
| Nature | Reduction in selling price | Expense (for seller), Income (for buyer) |
Example: Goods listed at Rs 50,000 with 10% trade discount. Net price = Rs 45,000. If cash discount of 2% is offered for prompt payment, cash discount = 2% of Rs 45,000 = Rs 900. Amount paid = Rs 44,100.
Exercise Question 7
Q: Journalise the following transactions of Mr Sharma:
1. Started business with cash Rs 2,00,000, goods Rs 30,000, and machinery Rs 70,000 2. Opened a bank account with Rs 1,50,000 3. Purchased goods from Ravi listed at Rs 40,000 at 15% trade discount 4. Sold goods to Amit listed at Rs 25,000 at 10% trade discount 5. Received from Amit Rs 21,600 in full settlement 6. Paid to Ravi Rs 32,300 in full settlement 7. Paid salary Rs 10,000 by cheque 8. Withdrew from bank for personal use Rs 5,000
| Date | Particulars | L/F | Debit (Rs) | Credit (Rs) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 1 | Cash A/c Dr. | 2,00,000 | ||||||||
| Purchases A/c Dr. | 30,000 | |||||||||
| Machinery A/c Dr. | 70,000 | |||||||||
| To Capital A/c | 3,00,000 | |||||||||
| (Being business started with cash, goods, and machinery) | ||||||||||
| Apr 2 | Bank A/c Dr. | 1,50,000 | ||||||||
| To Cash A/c | 1,50,000 | |||||||||
| (Being bank account opened by depositing cash) | ||||||||||
| Apr 4 | Purchases A/c Dr. | 34,000 | ||||||||
| To Ravi A/c | 34,000 | |||||||||
| (Being goods purchased from Ravi less 15% trade discount; 40,000 - 6,000 = 34,000) | ||||||||||
| Apr 6 | Amit A/c Dr. | 22,500 | ||||||||
| To Sales A/c | 22,500 | |||||||||
| (Being goods sold to Amit less 10% trade discount; 25,000 - 2,500 = 22,500) | ||||||||||
| Apr 8 | Cash A/c Dr. | 21,600 | ||||||||
| Discount Allowed A/c Dr. | 900 | |||||||||
| To Amit A/c | 22,500 | |||||||||
| (Being cash received from Amit, discount allowed Rs 900) | ||||||||||
| Apr 10 | Ravi A/c Dr. | 34,000 | ||||||||
| To Bank A/c | 32,300 | To Discount Received A/c | 1,700 | |||||||
| (Being paid to Ravi by cheque, discount received Rs 1,700) | ||||||||||
| Apr 12 | Salary A/c Dr. | 10,000 | ||||||||
| To Bank A/c | 10,000 | |||||||||
| (Being salary paid by cheque) | ||||||||||
| Apr 15 | Drawings A/c Dr. | 5,000 | ||||||||
| To Bank A/c | 5,000 | |||||||||
| (Being cash withdrawn from bank for personal use) |
Exercise Question 8
Q: What are accounting vouchers? Explain the different types.
An accounting voucher is a written document that authorises the recording of a transaction in the books of accounts. It is prepared on the basis of source documents and must be authorised (signed) by a competent person.
Types of Accounting Vouchers:
1. Debit Voucher: Prepared when a payment is made (cash goes out). It supports entries where the cash account is credited. Examples: payment of rent, payment to creditors, purchase of goods for cash.
2. Credit Voucher: Prepared when cash is received (cash comes in). It supports entries where the cash account is debited. Examples: receipt from debtors, cash sales, interest received.
3. Transfer Voucher (Journal Voucher): Prepared for non-cash transactions. It supports entries where no cash is involved. Examples: credit purchases, credit sales, depreciation, provision for doubtful debts.
4. Compound Voucher: Prepared when a transaction involves more than one debit or more than one credit (total debits = total credits). Examples: salary paid by cheque with TDS deducted, purchase of machinery with installation charges included.
Related Guides:
- [Chapter 3 Guide — Recording of Transactions I](/school/cbse/class/11/accountancy/cbse-recording-transactions-1)
- [All Class 11 Accountancy Solutions](/school/cbse/class/11/accountancy/solutions)
- [Class 11 Accountancy Subject Guide](/school/cbse/class/11/accountancy)