*Posting* Journalise the following transactions is the journal of M/s Goel Brothers and post them to the ledger. | 2017 | | ₹ | |---|---|---| | Jan. 01 | Started business with cash | 1,65,000 | | Jan. 02 | Opened bank account in PNB | 80,000 | | Jan. 04 | Goods purchased from Tara | 22,000 | | Jan. 05 | Goods purchased for cash | 30,000 | | Jan. 08 | Goods sold to Naman | 12,000 | | Jan. 10 | Cash paid to Tara | 22,000 | | Jan. 15 | Cash received from Naman | 11,700 | | | Discount allowed | 300 | | Jan. 16 | Paid wages | 200 | | Jan. 18 | Furniture purchased for office use | 5,000 | | Jan. 20 | withdrawn from bank for personal use | 4,000 | | Jan. 22 | Issued cheque for rent | 3,000 | | Jan. 23 | goods issued for house hold purpose | 2,000 | | Jan. 24 | drawn cash from bank for office use | 6,000 | | Jan. 26 | Commission received | 1,000 | | Jan. 27 | Bank charges | 200 | | Jan. 28 | Cheque given for insurance premium | 3,000 | | Jan. 29 | Paid salary | 7,000 | | Jan. 30 | Cash sales | 10,000 |

> [!TLDR] > Goel Brothers' transactions are journalised and posted. Cheque items pass through Bank A/c; **Cash A/c closes at ₹68,500 (Dr)** and **Bank A/c at ₹63,800 (Dr)**; Naman is settled with ₹300 discount allowed. **Journal of M/s Goel Brothers** | Date (2017) | Particulars | L.F. | Debit (₹) | Credit (₹) | |---|---|---|---|---| | Jan 01 | Cash A/c **Dr.** | | 1,65,000 | | | | To Capital A/c | | | 1,65,000 | | | (Business started with cash) | | | | | Jan 02 | Bank A/c **Dr.** | | 80,000 | | | | To Cash A/c | | | 80,000 | | | (Bank account opened with PNB) | | | | | Jan 04 | Purchases A/c **Dr.** | | 22,000 | | | | To Tara A/c | | | 22,000 | | | (Goods purchased from Tara) | | | | | Jan 05 | Purchases A/c **Dr.** | | 30,000 | | | | To Cash A/c | | | 30,000 | | | (Goods purchased for cash) | | | | | Jan 08 | Naman A/c **Dr.** | | 12,000 | | | | To Sales A/c | | | 12,000 | | | (Goods sold to Naman) | | | | | Jan 10 | Tara A/c **Dr.** | | 22,000 | | | | To Cash A/c | | | 22,000 | | | (Cash paid to Tara) | | | | | Jan 15 | Cash A/c **Dr.** | | 11,700 | | | | Discount Allowed A/c **Dr.** | | 300 | | | | To Naman A/c | | | 12,000 | | | (Cash received from Naman, discount allowed) | | | | | Jan 16 | Wages A/c **Dr.** | | 200 | | | | To Cash A/c | | | 200 | | | (Wages paid) | | | | | Jan 18 | Furniture A/c **Dr.** | | 5,000 | | | | To Cash A/c | | | 5,000 | | | (Furniture purchased for office use) | | | | | Jan 20 | Drawings A/c **Dr.** | | 4,000 | | | | To Bank A/c | | | 4,000 | | | (Withdrawn from bank for personal use) | | | | | Jan 22 | Rent A/c **Dr.** | | 3,000 | | | | To Bank A/c | | | 3,000 | | | (Rent paid by cheque) | | | | | Jan 23 | Drawings A/c **Dr.** | | 2,000 | | | | To Purchases A/c | | | 2,000 | | | (Goods withdrawn for household purpose) | | | | | Jan 24 | Cash A/c **Dr.** | | 6,000 | | | | To Ba

*Posting* Journalise the following transactions is the journal of M/s Goel Brothers and post them to the ledge

Numerical Questions · Q17

Posting

Journalise the following transactions is the journal of M/s Goel Brothers and post them to the ledger.

2017		₹
Jan. 01	Started business with cash	1,65,000
Jan. 02	Opened bank account in PNB	80,000
Jan. 04	Goods purchased from Tara	22,000
Jan. 05	Goods purchased for cash	30,000
Jan. 08	Goods sold to Naman	12,000
Jan. 10	Cash paid to Tara	22,000
Jan. 15	Cash received from Naman	11,700
	Discount allowed	300
Jan. 16	Paid wages	200
Jan. 18	Furniture purchased for office use	5,000
Jan. 20	withdrawn from bank for personal use	4,000
Jan. 22	Issued cheque for rent	3,000
Jan. 23	goods issued for house hold purpose	2,000
Jan. 24	drawn cash from bank for office use	6,000
Jan. 26	Commission received	1,000
Jan. 27	Bank charges	200
Jan. 28	Cheque given for insurance premium	3,000
Jan. 29	Paid salary	7,000
Jan. 30	Cash sales	10,000

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Concept understanding — Purchase Journal Entry

Purchase Journal Entry – A First Look

Think of a shopkeeper who buys goods to sell. Every time they bring stock into the shop, something changes: the shop now has more goods, but it also owes money (or has paid cash). The purchase journal entry is simply the accountant’s way of recording that moment — the moment goods come in.

The Everyday Intuition

You walk into a stationery shop and buy 50 notebooks for ₹2,000. From the shop’s point of view, two things happen at once:

The shop gains notebooks (an asset).
The shop loses cash (another asset) or owes the supplier (a liability).

The purchase entry captures both sides of that single transaction. It is not about the sale to a customer — that comes later. This is the inward movement of goods meant for resale.

The Precise Meaning

In Accountancy, a Purchase Journal Entry records the credit purchase of goods (stock-in-trade) for resale in the normal course of business. If the purchase is for cash, it goes into the Cash Book, not the Purchase Journal. The Purchase Journal (also called the Purchase Book) is specifically for credit purchases of goods.

Important

Only goods bought for resale are recorded here. Buying a computer for office use, or buying raw materials for manufacturing, is not a “purchase” in this sense — those are asset purchases and go elsewhere.

Why It Matters

Without this entry, the business would not know:

How much stock it holds.
How much it owes to each supplier.
The true cost of goods sold when calculating profit.

The Purchase Journal is the first step in the trading account. If you get this entry wrong, the entire profit figure goes wrong.

Accounting Treatment – The Golden Rule

For a credit purchase of goods, the rule is:

Debit Purchases Account (increase in expenses/goods)

Credit Supplier’s Personal Account (increase in liability)

The logic: Purchases is a nominal account (expense), so an increase is debited. The supplier is a personal account — when we owe them, we credit.

Example

On 5th April, bought goods from Ramesh for ₹10,000 on credit.

Journal Entry:

Date	Particulars	Debit (₹)	Credit (₹)
2024 Apr 5	Purchases A/c Dr.	10,000
	To Ramesh A/c		10,000
	(Being goods bought on credit from Ramesh)

Note

The narration “Being goods bought on credit from Ramesh” is mandatory in the journal. It explains the transaction in plain words.

If It Were a Cash Purchase

If the same goods were bought for cash, the entry would be:

Date	Particulars	Debit (₹)	Credit (₹)
2024 Apr 5	Purchases A/c Dr.	10,000
	To Cash A/c		10,000
	(Being goods bought for cash)

Notice: the credit side changes from a personal account (Ramesh) to a real account (Cash). The debit remains the same because the nature of the transaction — gaining goods — is unchanged.

The Purchase Book Format (Proforma)

The Purchase Journal itself (the book of original entry) has a standard format. Each credit purchase is recorded here before being posted to the ledger.

Purchase Book (Journal) Format: …

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Journal of M/s Goel Brothers (Jan 2017) — main entries:

Date	Particulars	Debit (₹)	Credit (₹)
Jan 01	Cash A/c Dr. — To Capital A/c	1,65,000	1,65,000
Jan 02	Bank A/c Dr. — To Cash A/c	80,000	80,000
Jan 04	Purchases A/c Dr. — To Tara A/c	22,000	22,000
Jan 05	Purchases A/c Dr. — To Cash A/c	30,000	30,000
Jan 08	Naman A/c Dr. — To Sales A/c	12,000	12,000
Jan 10	Tara A/c Dr. — To Cash A/c	22,000	22,000
Jan 15	Cash A/c Dr. / Discount Allowed A/c Dr. — To Naman A/c	11,700 / 300	12,000
Jan 16	Wages A/c Dr. — To Cash A/c	200	200
Jan 18	Furniture A/c Dr. — To Cash A/c	5,000	5,000
Jan 20	Drawings A/c Dr. — To Bank A/c	4,000	4,000
Jan 22	Rent A/c Dr. — To Bank A/c	3,000	3,000
Jan 23	Drawings A/c Dr. — To Purchases A/c	2,000	2,000
Jan 24	Cash A/c Dr. — To Bank A/c	6,000	6,000
Jan 26	Cash A/c Dr. — To Commission Received A/c	1,000	1,000

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Goel Brothers' transactions are journalised and posted. Cheque items pass through Bank A/c; Cash A/c closes at ₹68,500 (Dr) and Bank A/c at ₹63,800 (Dr); Naman is settled with ₹300 discount allowed.

Journal of M/s Goel Brothers

Date (2017)	Particulars	Debit (₹)	Credit (₹)
Jan 01	Cash A/c Dr.	1,65,000
	To Capital A/c		1,65,000
	(Business started with cash)
Jan 02	Bank A/c Dr.	80,000
	To Cash A/c		80,000
	(Bank account opened with PNB)
Jan 04	Purchases A/c Dr.	22,000
	To Tara A/c		22,000
	(Goods purchased from Tara)
Jan 05	Purchases A/c Dr.	30,000
	To Cash A/c		30,000
	(Goods purchased for cash)
Jan 08	Naman A/c Dr.	12,000
	To Sales A/c		12,000
	(Goods sold to Naman)
Jan 10	Tara A/c Dr.	22,000
	To Cash A/c		22,000
	(Cash paid to Tara)
Jan 15	Cash A/c Dr.	11,700
	Discount Allowed A/c Dr.	300
	To Naman A/c		12,000
	(Cash received from Naman, discount allowed)
Jan 16	Wages A/c Dr.	200
	To Cash A/c		200
	(Wages paid)
Jan 18	Furniture A/c Dr.	5,000
	To Cash A/c		5,000
	(Furniture purchased for office use)
Jan 20	Drawings A/c Dr.	4,000
	To Bank A/c		4,000
	(Withdrawn from bank for personal use)
Jan 22	Rent A/c Dr.	3,000
	To Bank A/c		3,000
	(Rent paid by cheque)
Jan 23	Drawings A/c Dr.	2,000
	To Purchases A/c		2,000
	(Goods withdrawn for household purpose)
Jan 24	Cash A/c Dr.	6,000
	To Bank A/c		6,000
	(Cash drawn from bank for office use)
Jan 26	Cash A/c Dr.	1,000
	To Commission Received A/c		1,000
	(Commission received)
Jan 27	Bank Charges A/c Dr.	200
	To Bank A/c		200
	(Bank charges)
Jan 28	Insurance A/c Dr.	3,000
	To Bank A/c		3,000
	(Insurance premium paid by cheque)
Jan 29	Salary A/c Dr.	7,000
	To Cash A/c		7,000
	(Salary paid)
Jan 30	Cash A/c Dr.	10,000
	To Sales A/c		10,000
	(Cash sales)

Ledger (principal accounts)

Cash Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Capital	1,65,000	By Bank	80,000
To Naman	11,700	By Purchases	30,000
To Bank	6,000	By Tara	22,000
To Commission Received	1,000	By Wages	200
To Sales	10,000	By Furniture	5,000
		By Salary	7,000
		By Balance c/d	68,500
Total	1,93,700	Total	1,93,700

Bank Account

|---|---|---|---| …

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