CAMBRIDGE INTERNATIONAL AS & A LEVEL ACCOUNTING

Language worksheet 1.1

Cash transactions
Crystal opens a new clothes shop in her local town. She carries out a number of cash transactions to start the
business. The accountant has suggested the accounts that she will use to record the transactions. State if each
account will be a debit or a credit transaction.

Account to debit Account to credit

Transaction
(received into the account) (what is given)
Crystal deposits the capital that she has invested to start the
bank a/c capital a/c
business into the business bank account

Purchased clothes to sell to customers Purchases a/c Bank a/c

Receives a bank loan via a bank transfer Bank A/c Bank loan A/c

Purchased equipment (till, fixtures and fittings, etc.) and paid by Bank a/c
Equipment A/c
debit card

Returned some damaged clothes that were not in the correct Bank a/c Purchase return a/c
condition to resell to customers

Bought lighting for the shop by cheque Lighting a/c Bank a/c

Carriage inwards paid by debit card Carriage inwards a/c Bank a/c

Paid electricity by debit card Electricity a/c Bank a/c

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 CAMBRIDGE INTERNATIONAL AS & A LEVEL ACCOUNTING

Match the definition with the term by drawing arrows.

The additional delivery cost paid by a business in excess of the

Drawings purchase price of the goods purchased for resale. It is added to the
cost of goods by the supplier.

Posting The money invested in a business by its owner(s).

Purchases returns Money the business owner takes out of the business for personal use.

Sales returns The process of recording financial transactions in ledger accounts.

Purchased goods that are sent back to the supplier who agrees to
Carriage inwards
accept them back and return any money paid.

Where a customer who has already bought goods sends them back to
Capital
the seller.

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 CAMBRIDGE INTERNATIONAL AS & A LEVEL ACCOUNTING

Language worksheet 2.1

Credit transactions
Complete the missing words in the passage below.
sell.
immediately for the goods they (2)…………….
Businesses do not always require their customers to pay (1)……………
later
When a purchase or sale occurs but the payment or receipt of money happens (3)……………, it is known as
cash
a credit transaction. They can be contrasted with (4)…………… transactions that involve immediate
payments
(5)…………….

credited
A sale on credit is (6)…………… to the sales account by the accountant and (7)……………
debited to an
account in the customer’s name. The customer who owes the business money becomes known as a trade
receivable.
(8)…………….

The bookkeeping entries for a credit purchase is (9)……………

debit to the purchases account and
(10)……………
credit to an account in the supplier’s name. The supplier that the business (11)……………
owes

money to becomes known as a trade (12)…………….

payable.

month
Customers that buy on credit may be given (13)…………… or even longer to pay. The sale is recorded on the day
received.
of the sale. The payment is recorded later when the money is (14)…………….

risky
It can be (15)…………… for a business to sell goods one day but then wait a month or more before
receiving payment from the customer. How can the business be certain that the customer will pay?
afford
Can the customer (16)…………… to pay? Is the customer trustworthy or might they try to
(17)……………
avoid paying?

trade
Discounts may be offered by a business. Businesses may offer a (18)…………… discount to encourage
increase
customers to buy from them regularly and (19)…………… cash
sales in the future. A (20)……………
earlier.
discount is an allowance given to encourage a customer to pay (21)…………….

Cambridge International AS & A Level Accounting – Malpas, Seagrove & Whatford © Cambridge University Press 2021 1
 CAMBRIDGE INTERNATIONAL AS & A LEVEL ACCOUNTING

Topic worksheet 1.1

Cash transactions
Henri has just opened a new business and has made the following financial transactions. Open the
necessary ledger accounts and post the following financial transactions to them. All transactions used the
bank account.

Nov 1 Henri started his business by paying $35 000 into his business bank account.
2 Purchased fixtures and fittings, $10 000.
3 Paid rent for his shop, $800.
4 Bought goods for resale, $4 000.
Sold some goods, $1 500.
5 Paid carriage outwards for delivery to a customer, $20.
6 Bought a delivery vehicle, $1 000.
7 Received rent for subletting part of the office, $200.
8 Bought more goods for resale, $3 000.
9 Paid for electricity, $120.
10 Withdrew $200 in drawings.
Paid postage, $40.
11 Sold goods, $2 050.
12 Bank interest received, $5.

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