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Next Lesson: Accounting Cycle

 

Accounting variation Proforma has been designed for leaning types of accounts and how debit and credit rules applies on different transactions. First column is for serial number or date; second column is reserved for economic activity of an organization. Chart of accounts, accounting pillars or type of accounts, reasons why debit and credit are other column in this accounting variation proforma.

accounting variation proforma

 

Example 1:

Use Accounting Variation Proforma for following transactions:

 

Jan. 2        Owners invested Cash of Rs. 70,000 in new business     (Hint: Owner’s Equity is Source)

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease70,000 
           Owner’s EquityOwner’s EquityIncrease 70.000

 

Jan. 3       An additional Rs. 10,000 was borrowed from a local bank as bank loan        (Hint: Liability is Source)

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease10,000 
          Bank LoanLiabilityIncrease 10,000

 

Jan. 5      Paid Rs. 1,500 in office Rent for the month    (Hint: Expenses always debited with its own Name)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Office RentExpenseIncrease1,500 
          CashAssetDecrease 1,500

 

Jan. 6       Cash Sales Rs. 1,000      (Hint: Revenue always credited with its own Name)

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease1,000 
          SalesRevenueIncrease 1,000

 

Jan. 9       Inventory costing Rs. 2,000 were purchased on account   (Hint: Account Payable for credit buying)

Charts of AccountsAccounting PillarsReasonsDebitCredit
InventoryAssetIncrease2,000 
          Account PayableLiabilityIncrease 2,000

 

Jan. 10     Credit Sales Rs. 3,000  (Hint: Account Receivable for credit sales)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Account ReceivableAssetIncrease3,000 
          SalesRevenueIncrease 3,000

 

Jan. 12     Purchase goods for Rs. 6,000 cash    (Hint: When goods or merchandising bought we debit purchase a/c)

Charts of AccountsAccounting PillarsReasonsDebitCredit
PurchasesExpenseIncrease6,000 
           CashAssetDecrease 6,000

 

Jan. 14     Rs. 1,200 was paid on account to the vendor/supplier  (Hint: Reducing Liability)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Account PayableLiabilityDecrease1,200 
          CashAssetDecrease 1,200

 

Jan. 15     Received cash from customer Rs. 3,000    (Hint: Assets realized or conversion of assets)

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease3,000 
          Account ReceivableAssetDecrease 3,000

 

Jan. 17     Paid insurance premium for two years Rs. 2,400    (Hint: More than one year expense is asset)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Prepaid InsuranceAssetIncrease2,400 
          CashAssetDecrease 2,400

 

Jan. 19     Goods return by cash customer of Rs. 200   (Hint: Sales return is always debited)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Sales ReturnContra RevenueDecrease200 
          CashAssetDecrease 200

 

Jan. 20     Goods return to credit supplier of Rs. 500  (Hint: Purchase return is always credited)

Charts of AccountsAccounting PillarsReasonsDebitCredit
Account PayableLiabilityDecrease500 
          Purchase ReturnContra ExpenseDecrease 500

 

Jan. 21     Received commission of worth Rs. 700   (Hint: Revenue always credited with its own Name)

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease700 
          CommissionRevenueIncrease 700

 

Jan. 22     Purchase Machinery of Rs. 10,000; Rs. 2,500 paid and for remaining sign a Note     (Hint: Compound entry)

Charts of AccountsAccounting PillarsReasonsDebitCredit
MachineryAssetIncrease10,000 
          CashAssetDecrease 2,500
          Note PayableLiabilityIncrease 7.500

 

Jan. 22 Total services performed for Rs. 4,500, cash received Rs. 2,000 and remaining Note receivable

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease2,000 
Note ReceivableAssetIncrease2,500 
          SalesRevenueIncrease 4,500

 

Jan. 22 Sales for client who have paid in advance in March 12

Charts of AccountsAccounting PillarsReasonsDebitCredit
Unearned SalesLiabilityDecrease3,000 
          SalesRevenueIncrease 3,000

 

Jan. 25 Account receivable collected for Rs.1,500

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease1,500 
          Account ReceivableAssetDecrease 1,500

 

Jan. 28 Purchased supplies of worth Rs. 25,000; paid 10,000 cash and remaining account payable

Charts of AccountsAccounting PillarsReasonsDebitCredit
SuppliesAssetIncrease25,000 
          CashAssetDecrease 10,000
          Account PayableLiabilityIncrease 15,000

 

Jan. 30 Received Rs. 3,000 cash from customer to whom sales to be delivered in future

Charts of AccountsAccounting PillarsReasonsDebitCredit
CashAssetIncrease3,000 
          Unearned SalesLiabilityIncrease 3,000

 

Previous Lesson: Accounting Equation

Next Lesson: Accounting Cycle

References

Awais, Q. M. (2009). Fundamental of Financial Accounting. (2nd, Ed.) Lahore: Waheed Publication.

Bazley, M., Hancock, P., Berry, A., & Jarvis, R. (2001). Contemporary Accounting. (4th, Ed.) UK: International Thomson Business Press.

Ghani, M. A. (1992). Principles of Accounting. (13th, Ed.) Lahore: Pak Imperial Book Depot.

Gupta, R. L., & Radheswamy, M. (2009). Advanced Accountancy (Vol. I & II). New Delhi: S Chand & Co.

Jain, S. .., & Narang, K. N. (2014). Advanced Accountancy. New Delhi: Kalyani Publishers.

Maheshwari, S. N., & Maheshwari, S. K. (2009). An Introduction to Accountancy. (10th, Ed.) New Delhi: Vikas Publishing House Pvt. Ltd.

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