CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Journal Quiz 2 - MCQExams.com

Goods distributed as free samples are products given away by a business usually for promotional reasons.

The goods distributed as free samples do not have a sales value and therefore cannot be recorded in the accounting records as sales.

The free product samples do however have a cost which needs to be removed from the cost of sales account and recorded as an expense. The expense account used will depend on the reason the goods were distributed as free samples and might include for example sales and marketing, promotion, advertising, charity or simply a free samples expense account.

Journal Entry :- 

Advertisement A/c Dr.

To Purchase A/c

Revenue is reversed by debiting the sales returns and allowances account (which is a contra account to sales) by the amount of original sale and crediting accounts receivable account or cash account (depending on whether it was a credit sale or a cash sale).

A joint venture is an arrangement in which two or more parties agree to pool their resources for the purpose of a specific task or transaction.

A joint venture account is prepared for measurement of venture profit. This account is debited with all venture expenses and credited with all sales or collections. The excess balance of credit side over the debit side shows the profit on joint venture and vice versa. Profit /Loss are transferred to co-venturers’ accounts in the profit-sharing ratio.

Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the seller's account or the joint bank account.

The transaction is based on the separate entity concept which signifies that business and its proprietor are treated two separate legal entity. Withdrawal of cash by proprietor should be debited to drawing account in the books of the business. Same amount should be credited by the proprietor in cash account.

Ram is the Receiver of goods, as such, his personal account has been debited According to the rule of personal account, i.e., “Debit the Receiver”. Sales A/c will be credited according to the rule of Nominal account i.e., “Credit all incomes”.

The transaction is based on the separate entity concept which signifies that business and its proprietor are treated two separate legal entity. Withdrawal of cash by proprietor should be debited to drawing account in the books of the business. Same amount should be credited by the proprietor in cash account.