In this case, income tax is treated as a personal expense resulting in drawings from the business concluding to a reduction of capital. Journal entry for income tax in case of a sole proprietorship contains 2 steps as follows;

How to answer the basic journal entry question?

Basic Journal Entries Question Basic Accounting Journal Entries Exercise Journal Entries and Ledger Question and Answer T-Accounts, Journal Entry and Trial Balance Question Click here for more Full Accounting Questions and Answers Comments for Journal Entry Question and Answer Click here to add your own comments

How to answer fill in the blank questions on debits and credits?

For fill-in-the-blank questions press or click on the blank space provided. If you have difficulty answering the following questions, learn more about this topic by reading our Debits and Credits (Explanation) and Additional Explanation. A company receives $500 of cash as an additional investment in the company by its owner, Mary Smith.

How are expenses recorded in a journal entry?

In the journal entry above, an expense has to be recorded to show the loss. And as a contra entry against this, we have to reduce our purchases account (it is purchases for the periodic system of inventory) or inventory account (for the perpetual system).

Which is the answer to the journal entries question?

Fact Case Study Solution Tuesday, 6 May 2014 Journal Entries Question & Answer 1. Started business with Cash Rs.2, 00,000 2. Purchased Goods from Amit Suppliers on credit of Rs.1, 50,000. 3. Deposit Cash in to Bank Rs. 25,000 4. Sold goods to Dynamic Traders Pvt. Ltd. of Rs. 1, 30,000 5.

Which is the best journal entry for accounting?

Received from Charanjeet Rs. 1540 and allowed him discount Rs. 60 8. Paid wages Rs. 80 9. Bought goods for cash Rs. 600 10. Sold goods to Ramesh Rs. 3400 11. Purchase goods from Purchotam Ra. 2600 12. Paid Manohar in settlement Rs. 1900 and discount allowed by him Rs. 100 13. Paid carriage from goods and sold Rs. 40 14. Paid wages Rs. 80 15.

What does it mean to adjust journal entries?

Adjusting Entries are the journal entries that are recorded at the end of accounting period to modify the closure balances in other ledger accounts. Below are the list of frequently asked Adjusting Entries job interview questions and answers which can make you feel comfortable to face the interviews: