Term : I Grade : IX

Subject: Accounts WS : 1

Name: …………………………………………….… Date: 15/06/2022

Topic =The Fundamentals of Accounting

Unit 1 Fundamentals of Accounting

Chapter 1.1 Purpose of Accounting

1. Complete the table by writing a definition of each of the following accounting terms.

Accounting term Definition

Assets

Liabilities

Capital

Inventory

Trade receivables

Trade payables

2 State three ways in which the accounting equation can be expressed.

………………………………………………………………………………………………………………………………………………

………...................................................................................................................

………...................................................................................................................

3 Complete the following table by inserting the missing figures.

Assets Liabilities Capital

$ $ $
126 500 84 500 ……….
163 250 ……….. 125 000
……….. 19 380 79 000
205 340 112 590 ………..
4 Complete the table by placing a tick (✓) in the correct column to indicate whether
each item is an asset or a liability.

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 Asset Liability
Premises
Loan from AB Loans
Inventory
Trade payables
Motor vehicle
Balance at bank
Loan to employee
Trade receivables

5 Bonile provided the following information at 1 January 20–9:

Premises $125 000, machinery $78 500, loan from XY $40 000, fixtures and fittings $23
200, inventory $11 820, trade payables $12 320, trade receivables $9 870, balance at
bank $8 630.

Prepare a statement of financial position on 1 January 20–9 using the information.

Insert the figure for the capital.

Bonile
Statement of financial position at 1 January 20–9

Assets $ Liabilities $

6 State the effect the following transactions would have on the items in Leo’s statement
of financial position.

Transaction Effect on assets Effect on liabilities

Paid $400 by cheque to a trade payable

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 Transaction Effect on assets Effect on liabilities

Purchased additional machinery, $5000, by cheque

Chapter 1.2: Introducing double entry

1 Insert the missing words in the following sentences.

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 1. In double entry, the account which is receiving or gaining value is .................. and the
account giving value is ..................

2. Goods obtained for resale are ................. to the ................. account. If the goods are
to be paid for at a later date the account of the supplier is .................

3. The cost of repairing a motor vehicle would not be recorded in the ................. account
as it does not ................. the value of the motor vehicle.

4. Where commission is both received and paid by a business, the business will maintain
two commission accounts – a ................. ................. account and
a .................. .................. account.

5. When the owner of a business uses his own money to purchase a machine for the
business, the .................. account will be debited and the .................. account will be
credited.

2 Complete the following table:

Transaction Account to be Account to be

debited credited
The owner introduced $60 000 capital into a
business bank account
Paid rent of premises by cheque
Purchased goods for resale on credit from AK
Supplies
Nelson, a credit customer, returned goods
Purchased office equipment by cheque
Received a loan from AN Loans which was paid into
the business bank

3 Complete the following table:

Account debited Account credited Transaction

Bank Sales Goods sold and the proceeds paid into the
business bank
Office expenses Bank
Rashida Purchases returns
Commission
Bank
receivable
Office
Capital
equipment
Bank loan Bank

4 Sabena started a business on 1 February. The following transactions took place in her
first two weeks of trading:
Feb 1 Sabena transferred $60 000 into a business bank account
4 Paid one month’s rent of premises by cheque, $400
6 Purchased office equipment, $5000, paying by cheque
8 Purchased good on credit from Martin, $3100
9 Paid advertising expenses by cheque, $215

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 11 Sold goods, $800, and received cash which was paid into the bank
immediately
13 Sabena asked the bank about the possibility of a loan of $10 000
14 Wilma, a credit customer, returned goods, $60

A Select the relevant figures and write up the bank account for the two weeks ended 14
February.
Sabena
Bank account
Date Details $ Date Details $

B List the items you have not included in the bank account and give a reason for their
omission.

Item not included in bank account Reason

C State how much money there was in the bank account at the close of business on 14
February.

$ ............................

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