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Class 11
Accountancy
Recording of Transactions - 2
explain the need for drawing up the special purpos...

Question:
Explain the need for drawing up the special purpose books.

Answer:

It becomes very much difficult for a small business to record all its transactions in one book only, i.e., the journal. But as the business expands and the number of transactions becomes large, it may become cumbersome to journalize each and every transaction.

For quick, efficient and accurate recording of business transactions, journals are required to be sub-divided into special journals. Many of the business transactions are repetitive in nature.

They can be easily recorded in special journals, each meant for recording all the transactions of a similar nature, e.g., all cash transactions may be recorded in one book, all credit sales transactions in another book and all credit purchase transactions in yet another book and so on.

These special journals are also called daybook or subsidiary books. Special journals prove economical and make division of labour possible in accounting work. The above mentioned are the only reasons which emphasis for drawing the special purpose books.

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Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
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2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
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Question:
Explain the need for drawing up the special purpose books.

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Question: Explain the need for drawing up the special purpose books.

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Question:
Explain the need for drawing up the special purpose books.