Question No 21 Chapter No 16 - T.S. Grewal 11 Class

Question No 21 Chapter No 16

21. Rama sold goods of 12,000, charged IGST @ 18% to Reshma on 1st January 2018. On the same date Rama draws a bill on Reshma for 12,000 for a period of 3 months and received the balance amount by cheque. On receipt of the bill on 1st January, 2018 duly accepted by Reshma, Rama discounts it with a bank at 6% p.a. On the date of maturity, the bill was dishonoured, the bank having to pay 500 as noting charges. Reshma paid the due amount less 500 in full settlement. Show Journal entries arising from the above in the books of both Rama and Reshma.

The solution of Question No 21 Chapter No 16: –

Books of Rama
Date	Particulars		L.F.	Debit	Credit
2018
Jan. 01	Reshma A/c	Dr.		14,160
	To Sales A/c				12,000
	To Output IGST A/c				2,160
	(Being Goods were sold to Reshma plus IGST@18)
Jan.01	Bills Receivable A/c	Dr.		12,000
	Bank A/c	Dr.		2,160
	To Reshma A/c				14,160
	(Being Y’s acceptance endorsed in favour of Z and discount received )
Jan.01	Bank A/c	Dr.		11,820
	Discount Charges A/c	Dr.		180
	To Bills Receivable A/c				12,000
	(Being Reshma ′s acceptance discounted with both at 6)
Apr.04	Reshma A/c	Dr.		12,500
	To Bank A/c				12,500
	(Being Reshma ′s acceptance which had been discounted, now became dishonoured and the bank paid Rs 500 as Noting Charges)
Apr.04	Cash A/c	Dr.		12,000
	Discount Allowed A/c	Dr.		500
	To Reshma A/c				12,500
	(Being Liabilities arising on account to bill dishonoured was settled)

Books of Reshma
Date	Particulars		L.F.	Debit	Credit
2018
Jan. 01	Purchases A/c	Dr.		12,500
	Input IGST A/c	Dr.		2,160
	To Rama A/c				14,160
	(Being Bought goods from Rama plus IGST @18)
Jan.01	Rama a/c	Dr.		14,160
	To Bills Payable A/c				12,000
	To Bank A/c				2,160
	(Being Y’s acceptance endorsed in favour of Z and discount received )
Apr.04	Bills Payable A/c	Dr.		12,000
	Noting Charges A/c	Dr.		500
	To Rama A/c				12,500
	(Being Bill Payable dishonoured)
Apr.04	Rama a/c	Dr.		12,500
	To Cash A/c				12,000
	To Discount Received A/c				500
	(Being Liabilities arising on account of bill dishonoured was settled )

Bill of exchange (BOE): Meaning and Examples

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Also, Check out the solved question of previous Chapters: –

- Chapter No. 1 – Introduction to Accounting
- Chapter No. 2 – Basic Accounting Terms
- Chapter No. 3 – Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards(IFRS)
- Chapter No. 4 – Bases of Accounting
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 7 – Origin of Transactions – Source Documents and Preparation of Vouchers
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book
- Chapter No. 11 – Special Purpose Books II – Other Books
- Chapter No. 12 – Bank Reconciliation Statement
- Chapter No. 13 – Trial Balance
- Chapter No. 14 – Depreciation
- Chapter No. 15 – Provisions and Reserves
- Chapter No. 16 – Accounting for Bills of Exchange
- Chapter No. 17 – Rectification of Errors
- Chapter No. 18 – Financial Statements of Sole Proprietorship
- Chapter No. 19 – Adjustments in preparation of Financial Statements
- Chapter No. 20 – Accounts from incomplete Records – Single Entry System
- Chapter No. 21 – Computers in Accounting
- Chapter No. 22 – Accounting Software – Tally
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book