Samuel maintains a full set of accounting records including a three column

Samuel maintains a full set of accounting records including a three column cash book. He provided the following information for October 20–5.
Oct 1 Cash $110, bank $5,150 (debit)
Trade receivables – Paul $160, Jasmine $880
Trade payables – Adele $350
4 Paid a cheque to Adele in settlement of her account of $350 less 2% discount
9 Purchased a motor vehicle, $9,500, and paid by credit transfer
12 Cash sales, $1,270, of which $1,220 was paid into the bank
15 Received a cheque, $160, from Paul
19 Took $1,000 from the bank for personal use
24 Paid office expenses in cash, $35
26 Received a cheque from Jasmine for $858 in settlement of her account of $880
29 The cheque received from Paul on 15 October was returned dishonored
30 Paid all cash into the bank except $80
a. Enter the balances in the appropriate accounts on 1 October.
b. Enter the transactions in the cash book and the ledgers. Balance the cash book on 31 October and bring down the balances on 1 November 20–5.
c. Transfer the totals of the discount columns in the cash book to the ledger.
d. Total or balance the accounts of the trade receivables and trade payables as required.

On 1 July 20–6 Mumtaz started a business. The following are her

On 1 July 20–6 Mumtaz started a business. The following are her transactions for the first two weeks of trading:

July 1 Mumtaz paid capital, $50,000, into the business bank account

2 Bought premises, $25,000, and paid by cheque

4 Bought equipment, $4,000, and paid by cheque

6 Bought goods, $1500, on credit from Mayur Vihar Traders

7 Paid advertising expenses, $60, by cheque

9 Sold goods, $200, and received a cheque

12 Sold goods, $310, on credit, to Ridhima

13 Ridhima returned damaged goods, $20

14 Paid $1000 by cheque on account to Mayur Vihar Traders

Enter these transactions in the ledger of Mumtaz. Balance the bank account and the accounts of Mayur Vihar Traders and Ridhima on 14 July and bring down the balances on 15 July 20–6.

Katie is a trader. On 1 October 20–4 she had the following

Katie is a trader. On 1 October 20–4 she had the following balances in her ledger:
                                                                            $
Capital ……………………………………………..   15000
Inventory …………………………………………    3 400
Fixtures and fittings …………………………   10100
Trade receivable – Daisy ………………….     1110
Trade payable – Zara ……………………….    1760
Loan from AB Finance ………………………   2000
Bank ………………………………………………….  4150 debit

a. Enter these balances in the appropriate accounts.

The following transactions took place in October 20–4:

October 2 Bought goods on credit from Zara, $1 500

7 Returned goods to Zara, $80

10 Repaid the loan by cheque

14 Paid Zara a cheque for the amount owing on 1 October 20–4

21 Cash received from sales of goods, paid directly into the bank, $940

28 Katie took goods for her own use, $140

30 Daisy paid the amount due by cheque

b. Enter these transactions in Katie’s ledger. Balance the bank account and Zara’s account and bring down the balances on 1 November 20–4.

A trial balance drawn up at the end of Jim’s financial year

A trial balance drawn up at the end of Jim’s financial year balanced. The following errors were then discovered:

1. Goods returned to K Weston had been debited to K Wilton.

2. Repairs to office equipment had been debited in the office equipment account.

3. An invoice, $1,000, for goods sold on credit to Jacob & Co had been recorded in the accounts as $100.

4. Goods purchased on credit from Brixton Ltd had been debited in Brixton’s account and credited in the purchases account.

a. State the type of error made in each of the errors 1–4.

b. Name two further errors not revealed by a trial balance.

Mariam is a trader. On 1 March 20–2 the balances in her

Mariam is a trader. On 1 March 20–2 the balances in her cash book were:

Cash $100 debit

Bank $494 credit

The following transactions took place in March 20–2:

March 4 Paid for repairs to office equipment by cheque, $293

7 Received a cheque from Nawaz, $110

11 Purchased motor vehicle paying by credit transfer, $5,130

13 Took $1,500 from the bank for personal use

19 Paid $286 to Anwar by credit transfer

21 Paid office expenses in cash, $67

27 Cash sales, $2,150

28 Paid wages in cash, $953

31 Paid all cash into bank except $150

a. Prepare Mariam’s cash book for March 20–2. Balance the book and bring down the balances on 1 April 20–2.

b. Explain the significance of the credit balance on the bank column on 1 March 20–2.

c. Explain why it is not possible to have a credit balance on the cash column.

d. Explain the term ‘contra’. Illustrate your answer with reference to an appropriate entry in the cash book in a.

Abdul maintains a petty cash book with an imprest amount of $150,

Abdul maintains a petty cash book with an imprest amount of $150, which is restored on the first day of each month.
He provided the following information on 31 August:
                                                                          $
Total of sundry expenses column ………… 13
Total of postage column ……………………… 19
Total of cleaning column …………………….  45
Total of ledger accounts column …………. 62

a. Explain the imprest system of petty cash.
b. State the total amount spent by the petty cashier in August.
c. State the double entry which will be made for the total of the sundry expenses column on 31 August.
d. State how the double entry will be made in the ledger for the items in the ledger accounts column.
e. State what entry will appear for petty cash in the statement of financial position on 31 August.
f. State how much the petty cashier will receive on 1 September to restore the imprest.

Waseem had the following assets, liabilities and capital on 1 April 20–6: 

Waseem had the following assets, liabilities and capital on 1 April 20–6:
                                                              $
Premises ……………………………   100,000
Machinery ……………………………. 48,000
Fixtures ………………………………..   8,800
Cash ………………………………..            590
Cash at bank …………………………..3,320
Trade receivables ……………………4,130
Inventory ………………………………..5,140
Trade payables ……………………….4,980
Capital ………………………………..165,000

a. Explain the meaning of each of the terms ‘assets’, ‘liabilities’ and ‘capital’.

b. State why the assets are always equal to the total of the liabilities and capital.

c. Complete the following table to state the effect of each transaction which took place on 2 April 20–6. The first one has been completed as an example. If the transaction does not affect the assets or liabilities write ‘no effect’.

d. Prepare the statement of financial position on 2 April 20–6 after these transactions have taken place.

Shilpa is a sole trader. She pays all receipts into the bank

Shilpa is a sole trader. She pays all receipts into the bank at the end of each day’s trading and all payments are made by cheque, except for those less than $20 which are regarded as petty cash items.

She provided the following information:

a. Write up the petty cash book for the week ended 28 February 20–9. Use analysis columns for refreshments, cleaning, motor expenses and ledger accounts. Balance the book on 27 February 20–9 and restore the imprest on 28 February 20–9.

b. Write up the cash book for the week ended 28 February 20–9.Balance the book at 28 February 20–9 (after the restoration of the petty cash imprest).

Mahendra started a business on 1 November 20–7. He provided the following

Mahendra started a business on 1 November 20–7. He provided the following information for his first month of trading:

Nov 1 Introduced $160 000 capital into the business, of which $158 500 was transferred into a business bank account and the rest was placed in the business cash box
2 Purchased premises, $95 000, paying by credit transfer
5 Bought goods for resale, $2 600, on credit from Duleep
10 Returned goods, $150, to Duleep
14 Paid general expenses in cash, $275
19 Paid rates in cash, $395
21 Sold goods on credit to Anila, $124 Paid carriage on good sold, $95, in cash
24 Paid Duleep $1 000 by cheque on account
28 Took goods costing $250 for personal use
30 Rented out part of the premises and received $260 rent by cheque

a. Enter these transactions in the cash book and ledgers. Balance the cash book and Duleep’s account. Bring down the balances on 1 December 20–7.

b. Prepare a trial balance on 30 November 20–7.
Mahendra is considering allowing credit customers a cash discount for prompt payment.

c. Explain the effect that this suggestion may have on Mahendra’s cash flow. 

d. State how this discount would be recorded if Mahendra decided to proceed with this suggestion.

The following balances appeared in the books of Fabice on 30 June

The following balances appeared in the books of Fabice on 30 June 20–7:
                                                                                                     $     
Machinery and equipment ……………………………………. 108,000
Motor vehicles ……………………………………………………….   31,000
Trade payables ……………………………………………………….    7,800
Balance at bank ……………………………………………………..     3,830
Trade receivables …………………………………………………..   11,500
Carriage inwards ……………………………………………………        380
Carriage outwards …………………………………………………        440
Sales …………………………………………………………………….. 131,000
Purchases …………………………………………………………….. 101,900
Rent receivable ……………………………………………………..     3,600
Rent payable …………………………………………………………     8,400
Inventory ………………………………………………………………   13,200
Commission receivable …………………………………………     1,950
Administration expenses ………………………………………     9,600
Capital …………………………………………………………………..           ?

a. State two reasons why a trial balance is prepared.

b. Prepare a trial balance for Fabice on 30 June 20–7, inserting a figure for the capital account.

c. Name and explain three errors which will not be revealed by a trial balance.