8ACC HYE Notes

Exam on: 22.11.2020, Sunday

Duration: 1 hour 30 minutes

Chapter 1: T-Accounts
Last I checked, did not have anything to do with T-shirts.
T-Accounts is the very basics of accounting. It involves the transactions
being put into a table and deciding what is debit and what is credit. To
divide them into debit and credit, we must first understand the two objects.
Eg. Paid rent 500$ by cheque.
Here, the rent is an object. As we are paying the rent to stay in the
building, it will be debit.
The other object is the bank as we are paying by cheque. It will be the
bank as the cheque we are paying will be cashed out at the bank.
So the table will look like this:

Details dr cr
Rent 500
Bank 500

Another example can be:

Paid 2000$ by cheque to buy a van

Details dr cr
Van 2000
Bank 2000

We are receiving the van so it will be debit. And we are paying by cheque
so it will be credit.
Chapter 2: Trial Balance
This is probably the most simple part of accounting. All you have to
do is state the object and whether it is Cr (Credit) or Dr (Debit). Very similar
to the last one except it is in words.
Eg: Paid rent 500$ by cheque.
Here is it will be;
Rent: Dr
Bank: Cr
In the exam script, you must write like so;
Paid 2000$ by cheque to buy a van:-
Van: Dr
Bank: Cr

Notes:
- Dr (Debit) will always come before Cr (Credit)
- Bought goods = Purchases. Purchases will always be Dr (Debit)
- Sold goods = Sales. Sales will always be Cr (Credit)
- Return Inwards or Sales return will always be Dr
- Return Outwards or Purchase returns will always be Cr
- Expenses are always Dr
Eg. rent, wages, electricity, insurance, stationery
- Assets always Dr balances
Eg: computer, machinery, motor van, furniture, equipment, bank, cash,
inventory ( stock of raw materials )
[Sometimes Bank has a Cr balance, this is called Bank Overdraft, which
means business borrowing money from the bank if they run out of balance.]
- Income objects are always Cr
Eg. Rent received, commission received, interest received
- Drawings is always Dr

If anything is bought on Credit, then the person selling it to us is Credited.

Meaning, we write his name and then give Cr
Eg. Goods costing £165 are bought on credit from D. Henry
Here it will be:
Purchases: Dr
.D. Henry: Cr

Chapter 3: Income Statement