Double Entry Accounting – Part 1

Unit 3

Question 1

Indicate which of the following assets are and which are liabilities:

(a) Motor vehicles (l) Stock of goods

(b) Creditors (m) Cash at bank
(c) Debtors (n) Loan from L. Graham
(d) Bank overdraft (o) cash balance
(e) Furniture and equipment (p) Fixtures and Fitting
(f) Loan to T. Rhone (q) Office machinery
(g) Owing to suppliers (r) Owings by customers
(h) Creditors for expenses (s) Mortgage on premises
(i) Premises (t) Stock of spare parts on hand
(j) Cash in hand
(k) Land and building

Question 2

Calculate the missing figures

Assets Liabilities Capital

(a) 1 000 372 ?
(b) ? 11 896 28 104
(c) 59 800 ? 42 654
(d) 96 321 3 895 ?
(e) ? 48 654 54 900
(f) 10 004 ? 7 485
(g) 49 000 ? 16 900
(h) ? 16 900 14 100
(i) 63 000 25 800 ?
(j) 92 000 82 100 ?
(k) 115 900 ? 18 600
 (l) ? 94 000 86 200

Question 3
Transactions Account to be Account to be
  Debited Credited
Bought motor van paying by cheque    
Sold goods on credit to L. Lucas    
Bought goods on credit from P. Simpson    
Sold fixtures for cash    
Goods returned by L. Lucas    
Bought equipment on credit from Equipco Ltd    
Goods returned to P. Simpson    
Allen paid his account by cheque    
Sold furniture on credit to F. Kelly    
Returned equipment to Equipco Ltd    
Cash sales    
Furniture returned by F. Kelly    
Cash purchases    
Paid G. Fisher by cheque    

Question 4
Prepare the necessary double entry records from the following information, in the books of V.
Strange.
2015
June 1 Started business with 2500 cash
June 2 Deposited $2000 of the opening cash in a bank account of the business
June 5 Bought fixtures on credit from Office Supplies Ltd for $350
June 12 Bought machinery paying by cheque $800
June 18 Returned fixtures costing $50 to Office Supplies Ltd
June 25 Sold fixtures for cash $200
June 26 Paid part of the amount owing to Office Supplies Ltd by cheque $200
June 27 Withdrew cash from bank $150
June 28 Received a loan of $1000 from M. Small by cheque
June 29 Bought motor van paying by cheque $1500
June 30 Paid Office Supplies Ltd the balance of their account in cash $100
Question 5
From the following information, write up the necessary ledger accounts in the books of S. Cross,
for the month of August 2015

Aug 1 Started business with $8000 in the bank and $2000 in cash.
Aug 2 Bought office furniture paying by cheque $1500
Aug 5 Sold office furniture for cash $500
Aug 10 Paid Superior Machines Ltd the amount owing to them by cheque $980
Aug 15 Took $1000 from the cash till and paid it into bank
Aug 18 Bought new office furniture on credit from Antique Ltd $800
Aug 20 Received a loan of $500 in cash from G. Barnes
Aug 25 Returned office furniture costing $200 to Antique Ltd
Aug 28 Paid Antique Ltd in cash $600
Aug 30 Withdrew $200 cash from the bank for business use
Aug 31 The proprietor introduces further capital by cheque $1000

Question 6
Enter the following transactions in the appropriate accounts:
20016
July 1 Started business with $7400 cash
July 2 Paid $7000 of the opening cash into the bank
July 4 Bought goods on credit $410 from J. Watson
July 5 Bought a van by cheque $4920
July 7 Bought goods for cash $362
July 10 Sold goods on credit $218 to L. Less
July 12 Returned goods to J. Watson $42
July 19 Sold goods for cash $54
July 22 Bought fixtures on credit from Firelighters Ltd $820
July 24 F. Holmes lent us $1500 paying us the money by cheque
July 29 We paid J. Watson his account by cheque $368
July 31 We paid Firelighters Ltd by cheque $820
Question 7
Enter the following transactions in the appropriate accounts:
2016
May 1 Started business with $18000 in the bank
May 2 Bought goods on credit from B. Hinds $1455
May 3 Bought goods on credit from G. Smart $472
May 5 Sold goods for cash $210
May 6 We returned goods to B. Hinds $82
May 8 Bought goods on credit from G. Smart $370
May 10 Sold goods on credit to P. Syme $483
May 12 Sold goods for cash $305
May 18 Took $250 of the cash and paid it into the bank
May 21 Bought a printer by cheque $620
May 22 Sold goods on credit to H. Buchan $394
May 23 P. Syme returned goods to us $160
May 25 H. Buchan returned goods to us $18
May 28 We returned goods to G. Smart $47
May 29 We paid Hinds by cheque $1373
May 31 Bought machinery on credit from A. Cobb $419