PORT MORESBY TECHNICAL COLLEGE

BUSINESS ACCOUNTING MANAGEMENT

DIPLOMA DEPARTMENT
P.O. Box 1969 Port Moresby National Capital District, Papua New Guinea
TEL: +675 775 69 693 FAX: +675 321 1057 Principal: +675 321 4502

NC4 Accounting 1: Topic 1 – Accounting Equations

Review Exercise: Group Work 2:
Student’s Name: Date:
Class / Group: Score: /20 marks
1. Please provide the deviations of the assets below: (5 marks)

Asset Definition
Accounts receivable

Goodwill

Corporate Intellectual Property

Patent

Copyright

Licenses and Permits

Marketable securities

Prepaid insurance
Brand

Trade secrets

Short – term deposits

Cash

Machinery

Tools

Office Equipment

Land

Building

Cash equivalent
2. Please complete the table below: (2 marks)
Account Debit Credit
Asset Increase Decrease
Liability Decrease Increase
Owner’s equity Decrease Increase
Revenue Decrease Increase
Expenses Increase Decrease

3. Kindly complete the table below with the accounts (Assets, Liabilities, Owner’s Equity, revenue
and Expenses) affected. The first one is completed for you as an example. (3 marks)

No
. Business Transaction Debit Credit
1 Sale for cash Cash Revenue
2 Sale on credit Accounts Receivable Revenue Account
3 Receive cash in payment of an account receivable Cash Account Accounts Receivable
4 Purchase supplies from supplier for cash Expense Account Cash Account
5 Purchase supplies from supplier on credit Expense Account Cash Account
6 Purchase inventory from supplier for cash Inventory Account Cash Account
7 Purchase inventory from supplier on credit Expense Account Accounts Payable Account
Wages expenses and
8 Pay employees payroll tax accounts Cash Account
9 Take out a loan Cash Account Loans Payable Account
10 Repay a loan Loans Payable Account Cash Account

4. Mr. Cloudy Lomo is the sole of Lomo Trading. Lomo Trading is a business which special in trade
store business. Below are Lomo Trading’s business transactions. Kindly analyze the business
transactions below for the month of February 2022 and prepare journal entries of the same. The first
one is done for you as an example. (10 marks)

Date Business Transaction

1 Feb 2022 Mr. Cloudy Lomo contributed K10,000 towards his trading business.
2 Feb 2022 Purchased K5,000 stock with cash
3 Feb 2022 Purchased a refrigerator for K1,500 in cash
5 Feb 2022 Paid a wages of K200 in cash
7 Feb 2022 Engaged a security company to guard the store on credit basis of K500 per month.
10 Feb 2022 Bought a food warmer from a friend for K3,000. Paid K1400 in cash and promised
to pay a K600 later.
13 Feb 2022 Paid two months rentals in advance of K300 per month.
18 Feb 2022 He recorded cash sales of K10,000 and a credit sales of K6,000.00 for the first two
weeks for the month of February 2022
21 Feb 2022 He purchased new stock worth of K7,500.
22 Feb 2022 He purchase new stock worth of K2,500 on account.
24 Feb 2022 He borrowed K5,000 from his elder to expand its business.
25 Feb 2022 He paid a commission of K300 in cash to a guy who connected him to a major
Supplier to buy supplier on credit.
25 Feb 2022 He paid obtained a loan of K20,000 from NDB business to expand its business.
26 Feb 2022 He purchase a Toyota Hilux open back utility for a price of K15,000.00
26 Feb 2022 He assisted one of his brother to meet his school fees who studies electro technology
with a cash of K2,500 in cash
27 Feb 2022 He again recorded a cash sales of K8,000 and credit sales of K4,000 in the next two
weeks of the mot of February 2022.
28 Feb 2022 He paid K600 wages, K500 rentals and K750 for electricity. All paid in cash.
 Date

1 Feb 2022

2 Feb 2022

3 Feb 2022

5 Feb 2022

7 Feb 2022

10 Feb 2022

13 Feb 2022

18 Feb 2022

21 Feb 2022

22 Feb 2022

24 Feb 2022

25 Feb 2022

25 Feb 2022

26 Feb 2022

26 Feb 2022

27 Feb 2022

28 Feb 2022