Exercise 1: Business Transactions – identify account to be debited and account to be credited
- Mr Dean started business with $ 30 000 in cash
- Bought goods on credit from B San $ 2 000.
- Sold goods on credit to D Dan $ 5 000.
- Sold gods for cash $ 2 000
- D Dan returned us goods $ 5 00
- Goods returned to B San $ 500
- Paid office employees salaries by cheque $ 3 000
- Dean put a further $ 10 000 into business bank account as additional capital.
- Paid cheque $ 1 800 to B San in full settlement of his account.
- Dean withdrew from business bank account $ 500 for personal use.
Answers
- Debit: Cash, and Credit: Capital
- Debit: Purchases, and Credit: B San
- Debit: D Dan and Credit: Sales
- Debit: Cash, and Credit: Sales
- Debit: Sales returns and Credit: D Dan
- Debit: B San and Credit: Purchases returns
- Debit: Salaries and Credit: Bank
- Debit: Bank, and Credit: Capital
- Debit: A San, and Credit: Bank and Discount received.
- Debit: Drawings and Credit: Bank
Exercise 2: Business Transactions – identify account to be debited and account to be credited
- Mr David started a business with cash at bank $ 20 000 and office furniture $ 2 000.
- Bought goods from Well Shine Traders on credit $ 2 000.
- Bought office furniture and paid by cheque $ 3 000
- Sold goods for cash $ 8 000.
- Sold goods to Sohan Traders on credit $ 10 000
- Paid office rent by cheque $ 1 000
- Paid wages $ 3 000 by cheque
- Cheque received from Sohan Traders for the amount due
- Paid a cheque $ 1 800 to Well Shine Traders in full settlement of their account.
- David withdrew from business bank account $ 800 for personal use.
Answers:
- Debit: Bank and Office furniture, Credit: Capital
- Debit: Purchases, and Credit: Well Shine Traders
- Debit: Office furniture and Credit: Bank
- Debit: Cash, and Credit : Sales
- Debit: Sohan Traders and Credit: Sales
- Debit: Office rent, and Credit: Bank
- Debit: Wages, and Credit: Bank
- Debit: Bank, and Credit: Sohan Traders
- Debit: Well Shine Traders, and Credit: Bank and Discount received.
- Debit: Drawings and Credit: Bank
Exercise 3: Business Transactions – identify account to be debited and account to be credited
- Started business with $ 7 000 cash
- Bought goods for cash $ 2 000
- Bought goods on credit $ 2 000 from M Max
- Sold goods for cash $ 4 000
- Returned goods to M Max $ 100
- Sold goods to C Can on credit $ 3 000
- Paid balance due to M Max by cheque
- Bought office furniture $ 2 000 and paid by cheque
- Goods bought by cheque $ 6 000
- Sold goods to D Dan on credit $ 2 000.
Answers:
- Debit : Cash and Credit: Capital
- Debit: Purchases and Credit: Cash
- Debit:Purcahses and Credit: M Max
- Debit: Cash and Credit: Sales
- Debit: M Max and Credit:Purcahses returns
- Debit: C Can and Credit: Sales
- Debit:M Max and Credit: Bank
- Debit: Office furniture and Credit: Bank
- Debit: Purcahses and Credit: Bank
- Debit: D Dan and Credit: Sales
Exercise 4: Business Transactions – identify account to be debited and account to be credited
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- Started a business with $ 20 000 in the bank.
- Bought goods on credit from G Gan $ 2 000
- Sold goods for cash $ 10 000 and received cheque.
- Goods worth $ 500 returned to G Gan
- Settled G Gan ‘s account through bank transfer.
- Paid office rent $ 500 and repair charges $ 200 by cheque
- Bought office furniture and paid by cheque $ 2 000
- Sold goods on credit to C Cross $ 5 000.
- C Cross returned us goods $ 1 000
- Cheque received from C Cross.
Answers
- Debit: Bank and Credit: Capital
- Debit: Purchases and Credit: G Gan
- Debit: Bank and Credit: Sales
- Debit: Sales returns and Credit: G Gan
- Debit: G Gan and Credit: Bank
- Debit: Rent and Repairs, and Credit: Bank
- Debit: Office Furniture and Credit: Bank
- Debit: C Cross and Credit: Sales
- Debit:Sales returns and Credit: C Cross
- Debit: Bank and Credit: C Cross
Exercise 5: Business Transactions – identify account to be debited and account to be credited
- Z Zan started in business with $ 30 000 in the bank and $ 10 000 cash
- Bought office stationery by cheque $ 500
- Paid insurance by cash $ 300
- Goods worth $ 500 returned to S Sak
- Bought office computer on credit from JJ Tech $ 10 000
- Paid general expenses by cheque $ 500
- Paid JJ Tech ‘s due by cheque and received cash discount $ 500
- Received cheque from MM Khan $ 2 000.
- Paid motor expenses in cash $ 200.
- Z Zan withdrew $ 500 from business bank account for personal use.
Answers:
- Debit: Bank and Cash and Credit: Capital
- Debit: Office stationery, and Credit: Bank
- Debit: Insutance and Credit: Cash
- Debit: S Sak, and Credit: Purcahses returns
- Debit: Office Computers, and Credit: JJ Tech
- Debit: General expenses and Credit: Bank
- Debit: JJ Tech, and Credit: Bank and Discount received.
- Debit: Bank and Credit: MM Khan
- Debit: Motor expenses, and Credit: Cash
- Debit: Drawings, and Credit: Bank.
Exercise 6: Business Transactions – identify account to be debited and account to be credited
- Norton started business as a baker by paying $ 3 000 into a business bank account
- Paid rent by cheque $ 300
- Purchased shop fittings $ 500 paid by cheque
- Purchased bakery ingredients and paid by cash $ 600
- Sold some bakery items and received cash $ 200
- Paid wages $ 200 ( Cash)
- Local taxes paid by cheque$ 100
- Withdrew $ 600 from bank for personal use
- Sold furniture for cash $ 500
- Purchased delivery scooter $ 800 from Scooty Mart and the part amount is paid by cheque
Answers
- Debit: Bank and Credit: Capital
- Debit: Rent and Credit : Bank
- Debit: Shop fittings and Credit: Bank
- Debit: Purcahses and Credit: Cash
- Debit: Cash and Credit: Sales
- Debit: Wages and Credit: Cash
- Debit: Taxes and Credit: Bank
- Debit: Drawings and Credit: Bank
- Debit: Cash and Credit: Furniture
- Debit: Delivery scooter and Credit: Scooty Mart and Bank
Exercise 7: Business Transactions – identify account to be debited and account to be credited
- Purchased goods for resale and paid by cheque $ 3 000
- Cash sales $ 5 000
- Credit sales $ 2 000
- Purchased goods on credit from Sohan Traders $ 1 000
- Paid staff wages in cash $800
- Received cheque from Rohan a customer $ 3,000 and allowed discount $200
- Purchased a new motor van by cheque $ 2 000
- Paid motor van repairs by cheque $ 3 00
- Paid Trilo Limited $ 2 000 and received cash discount $ 200
- Withdrew from bank to pay wages $ 180
Answers
- Debit: Purchases and Credit: Bank
- Debit: Cash and Credit: Sales
- Debit: Debtors and Credit: Sales
- Debit: Purchases and Credit: Sohan Traders
- Debit: Wages and Credit: Cash
- Debit: Bank and Discount allowed and Credit: Rohan
- Debit: Motor van and Credit: Bank
- Debit: Motor van repairs and Credit: Bank
- Debit: Trilo Limited and Credit: Bank and discount receive
- Debit: Wages and Credit: Bank
- Credit: Bank
Exercise 8: Business Transactions – identify account to be debited and account to be credited
- Started business with $ 20 000 cash in the bank
- Bought goods on credit from B Brown $ 2 000
- Sold goods for cash $ 10 000
- Sold goods on credit to P Tan $ 10 000
- P Tan returned us goods $ 2 000
- Bought goods on credit from G Tag $ 3 000
- Goods returned to G Tag $ 200
- Paid money owing to G Tag by cheque
- Paid H Heather’s account by cash $ 6 800
- Good returned to by customer J Jeet $ 800
Answers
- Debit: Bank and Credit: Capital
- Debit: Purchases and Credit : B Brown
- Debit: Cash and Credit: Sales
- Debit: P Tan and Credit: Sales
- Debit: Sales returns and Credit: P Tan
- Debit: Purchases and Credit: G Tag
- Debit: G Tag and Credit: Purchases returns
- Debit: G Tag and Credit: Bank
- Debit: H Heather and Credit: Cash
- Debit: Sales returns and Credit: J Jeet
Exercise 9: Business Transactions – identify account to be debited and account to be credited
- Started new business with $ 12 000 in the bank
- Bought goods on credit from H Hind $ 6 000
- Paid H Hind’s account by cheque and received $ 400 discount
- Goods bought by cheque $ 2 000
- Goods bought for cash $ 200
- Bought office furniture for cash $ 3 700
- Good worth $ 700 taken home by the owner for personal use.
- Paid managers salaries by cheque $ 6 800
- Paid office cleaning expenses $ 300 ( Cash)
- Paid cash to D Kat $ 300
Answers
- Debit: Bank and Credit: Capital
- Debit: Purchases and Credit: H Hind
- Debit: H Hind and Credit: Bank and Discount received
- Debit: Purchases and Credit: Bank
- Debit: Purchases and Credit: Cash
- Debit: Office furniture and Credit: Cash
- Debit: Drawings and Credit: Purchases
- Debit: Salary and Credit: Bank
- Debit: Office cleaning expenses and Credit: Cash
- Debit: D Kat and Credit: Cash
Exercise 10: Business Transactions – identify account to be debited and account to be credited
- Joel pays a cheque into his business account as capital
- Purchased some goods for resale and paid by cheque
- Paid rent by cheque
- Sold some goods and banked all cash
- Purchased goods from Noel on credit
- Returned goods to Noel for wrong specification
- Motor vehicle purchased and paid cheque
- Paid weekly wages by cash
- Withdrew from bank for personal use
- Withdrew from bank for official use
Answers
- Debit: Bank and Credit: Capital
- Debit: Purchases and Credit: Bank
- Debit: Rent and Credit: Bank
- Debit: Bank and Credit: Sales
- Debit: Purchases and Credit: Noel
- Debit: Noel and Credit: Purchases returns
- Debit: Motor vehicle and Credit: Bank
- Debit: Wages and Credit: Cash
- Debit: Drawings and Credit: Bank
- Debit: Cash and Credit: Bank