Small Retail Store Bookkeeping Project for New Bookkeepers
Let’s build a Bookkeeping Project for a Small Retail Store with examples, journal entries, and explanations. This will feel like a mini case study you can actually use for practice or teaching.
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| Small Retail Store Bookkeeping Projects |
📘 Bookkeeping Project: Small Retail Store
1. Background of the Store
- Business: “FreshMart Retail Shop” (a small grocery/retail shop).
- Owner: Mr. A.
- Accounting method: Double Entry System.
- Period: April 2025 (1 month).
- Currency: INR.
2. Business Transactions (April 2025)
- Capital introduced – Owner started business with ₹5,00,000 cash.
- Purchased goods for resale – Bought inventory worth ₹2,00,000 in cash.
- Purchased goods on credit – From supplier XYZ Ltd. worth ₹1,00,000.
- Furniture purchased – Office furniture worth ₹50,000 paid via bank.
- Cash Sales – Sold goods for ₹1,20,000 (Cost ₹80,000).
- Credit Sales – Sold goods worth ₹60,000 to customer Mr. Raj (Cost ₹40,000).
- Customer payment received – Mr. Raj paid ₹30,000 via bank transfer.
- Expenses paid – Shop rent ₹20,000 and Salaries ₹25,000 paid in cash
- Electricity bill payable – ₹5,000 (not yet paid).
- Owner’s withdrawal – ₹10,000 withdrawn for personal use.
3. Journal Entries
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 1 Apr | Cash A/c Dr. To Capital A/c |
5,00,000 | 5,00,000 |
| 2 Apr | Purchases A/c Dr. To Cash A/c |
2,00,000 | 2,00,000 |
| 3 Apr | Purchases A/c Dr. To XYZ Ltd. (Creditor) |
1,00,000 | 1,00,000 |
| 4 Apr | Furniture A/c Dr. To Bank A/c |
50,000 | 50,000 |
| 5 Apr | Cash A/c Dr. To Sales A/c |
1,20,000 | 1,20,000 |
| 5 Apr | Cost of Goods Sold A/c Dr. To Purchases/Inventory A/c |
80,000 | 80,000 |
| 6 Apr | Mr. Raj (Debtor) A/c Dr. To Sales A/c |
60,000 | 60,000 |
| 6 Apr | Cost of Goods Sold A/c Dr. To Purchases/Inventory A/c |
40,000 | 40,000 |
| 7 Apr | Bank A/c Dr. To Mr. Raj A/c |
30,000 | 30,000 |
| 8 Apr | Rent A/c Dr. Salaries A/c Dr. To Cash A/c |
20,000 25,000 |
45,000 |
| 9 Apr | Electricity Exp. A/c Dr. To Electricity Payable A/c |
5,000 | 5,000 |
| 10 Apr | Drawings A/c Dr. To Cash A/c |
10,000 | 10,000 |
4. Ledger Posting (Examples)
Cash A/c- Dr: 5,00,000 (Capital)
- Cr: 2,00,000 (Purchases),
45,000 (Expenses),
10,000 (Drawings) - Balance carried forward: ₹2,45,000
- Cr: 1,20,000 (Cash Sales),
60,000 (Credit Sales) - Total Sales = ₹1,80,000
- Dr: 3,00,000 (2,00,000 cash + 1,00,000 credit)
- Adjusted with COGS entries
5. Trial Balance (as of 30 April 2025)
| Account | Debit (₹) | Credit (₹) |
|---|---|---|
| Cash A/c | 2,45,000 | - |
| Bank A/c | 30,000 | - |
| Furniture A/c | 50,000 | - |
| Purchases A/c (Closing Stock adj. pending) | 3,00,000 | - |
| COGS A/c | 1,20,000 | - |
| Rent A/c | 20,000 | - |
| Salaries A/c | 25,000 | - |
| Electricity Exp. A/c | 5,000 | - |
| Drawings A/c | 10,000 | - |
| XYZ Ltd. (Creditor) | - | 1,00,000 |
| Electricity Payable | - | 5,000 |
| Mr. Raj (Debtor) | 30,000 | - |
| Sales A/c | - | 1,80,000 |
| Capital A/c | - | 5,00,000 |
| Totals | 8,35,000 | 8,35,000 |
6. Final Accounts (Summary)
- Total Sales: ₹1,80,000
- COGS: ₹1,20,000
- Gross Profit: ₹60,000
- Operating Expenses (Rent + Salaries + Electricity): ₹50,000
- Net Profit: ₹10,000
This is a complete bookkeeping cycle for one month of a small retail store, covering journal entries, ledgers, trial balance, and final accounts.
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