Chapter 4: Transactions to General Ledger Chapter Review Solutions

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1 Introductory Accounting - Accounting to Trial Balance Chapter 4: Transactions to General Ledger Chapter Review Solutions 2. Invoice: A bill charging a customer for goods supplied or service provided on credit. Credit Note: Cheque: Receipt: A document which allows a customer a reduction in the original amount charged for goods or services supplied on credit. An order to a bank to pay a sum of money to a specified person. A written acknowledgement of money received. Bank Deposit Slip: A document prepared when depositing cash / cheques in a bank account. Cash Sale Docket: A customer receipt prepared by a cash register or hand written for a cash sales transaction. 4. T account format Account ( Name ) Account No:. Debit Side Credit Side Running balance account format Account ( Name ) Account No:. Date Details Folio Debit Credit Balance 6. 5 Categories: Assets, Liabilities, Owner's Equity, Income, Expenses. 8. ( i ) Purchase an asset ( ii ) Pay a liability ( iii ) Receive payment from an account receivable ( iv ) Borrow money 40

2 Chapter 4: Recording Transactions - Solutions 10. Balancing the ledgers. At the end of any given period, whether it is a day, week or month, the ledger accounts are closed off or balanced and the balance is then entered into the trial balance. Not every account will need to be closed off as there may be for example, an account with only one value / entry. It is important to close off the accounts in a neat, legible fashion. This will not only make it easier to see what the balance is, but will also make checking the accounts easier too. 12. Cash at Bank Date Particulars Amount Date Particulars Amount 01/6 Balance b/d 12,200 30/6 Wages 5,200 30/6 Service Revenue 7,700 Creditors 10,200 Debtors 15,400 Drawings 3,500 General Expenses 1,200 Balance c/d 15,200 01/7 Balance b/d 15,200 35,300 35, Cash at Bank 110 Jul 01 Balance b/d 6,200 Jul 04 Accounts Payable GJ07 11,500 Jul 09 Acc Receivable GJ07 10,300 Jul 15 Wages GJ07 4,200 Jul 13 Service Revenue GJ07 5,500 Jul 24 Drawings GJ07 3,000 Jul 28 Service Revenue GJ07 9,900 Jul 31 Balance c/d 13,200 31,900 31,900 Aug 01 Balance b/d 13,200 41

3 Introductory Accounting - Accounting to Trial Balance 16. ( a ) General Journal of Jake Asher GJ01 Date Particulars Folio Debit Credit Jul 01 Rent 620 1,000 GST Paid Bank 100 1,100 Rent paid 04 Bank 100 4,840 Commission Income 400 4,400 GST Collected Commission income received 06 Advertising 610 1,250 GST Paid Bank 100 1,375 Advertising paid 10 Wages 660 2,000 Bank 100 2,000 Wages paid 15 Bank 100 1,980 Commission Income 400 1,800 GST Collected Commission income received 18 Electricity GST Paid Bank Electricity paid 20 Equipment 150 1,000 GST Paid Bank 100 1,100 Equipment bought for cash 23 Accounts Payable 220 1,200 Bank 100 1,200 Account paid 28 Bank 100 1,760 Commission Income 400 1,600 GST Collected Commission income received 42

4 Chapter 4: Recording Transactions - Solutions 16. Cont d ( b ) ( c ) General Ledger of Jake Asher Bank 100 Jul 01 Balance b/d 6,500 Jul 01 Rent GJ07 1,100 Jul 04 Commission Income GJ07 4,840 Jul 06 Advertising GJ07 1,375 Jul 15 Commission Income GJ07 1,980 Jul 10 Wages GJ07 2,000 Jul 28 Commission Income GJ07 1,760 Jul 18 Electricity GJ Jul 20 Equipment GJ07 1,100 Jul 23 Accounts Payable GJ07 1,200 Balance c/d 7,975 15,080 15,080 Aug 01 Balance b/d 7,975 Furniture and Equipment 150 Jul 01 Balance b/d 12,000 Jul 31 Balance c/d 13,000 Jul 20 Bank GJ07 1,000 13,000 13,000 Aug 01 Balance b/d 13,000 Motor Vehicle 160 Jul 01 Balance b/d 25,000 GST Collected 210 Jul 31 Balance c/d 780 Jul 04 Bank GJ Jul 15 Bank GJ Jul 28 Bank GJ Aug 01 Balance b/d 780 GST Paid 215 Jul 01 Bank GJ Jul 31 Balance c/d 355 Jul 06 Bank GJ Jul 18 Bank GJ07 30 Jul 20 Bank GJ Aug 01 Balance b/d

5 Introductory Accounting - Accounting to Trial Balance Accounts Payable 220 Jul 23 Bank GJ07 1,200 Jul 01 Balance b/d 1,800 Jul 31 Balance c/d 600 1,800 1,800 Aug 01 Balance b/d 600 Capital 300 Jul 01 Balance b/d 41,700 Commission Income 400 Jul 31 Balance c/d 7,800 Jul 04 Bank GJ07 4,400 Jul 15 Bank GJ07 1,800 Jul 28 Bank GJ07 1,600 7,800 7,800 Aug 01 Balance b/d 7,800 Advertising 610 Jul 06 Bank GJ07 1,250 Rent 620 Jul 01 Bank GJ07 1,000 Electricity 630 Jul 18 Bank GJ Wages 660 Jul 10 Bank GJ07 2,000 ( d ) Assets + Expenses = Liabilities + Owner s Equity + Revenues 45, ,550 = 1, , ,800 44

6 Chapter 4: Recording Transactions - Solutions 18. General Journal of Colin Chan GJ01 Date Particulars Folio Debit Credit Jun 01 Bank ,000 Capital ,000 Capital invested by owner 02 Fittings 150 6,000 GST Paid Accounts Payable 220 6,600 Fittings bought on credit Rent 640 1,500 GST Paid Bank 100 1,650 Rent paid 03 Insurance GST Paid Bank Insurance paid 05 Motor Vehicle ,000 GST Paid 215 2,000 Bank ,000 Loan Payable ,000 Motor vehicle acquired 07 Motor Vehicle Expenses GST Paid Bank Fuel bill paid 08 Accounts Receivable ,500 Service Revenue ,000 GST Collected 210 1,500 Services provided on credit 09 Accounts Payable 220 2,000 Bank 100 2,000 Account paid 11 Advertising 610 1,600 GST Paid Bank 100 1,760 Advertising paid 13 Bank 100 5,000 Accounts Receivable 120 5,000 Receipts from debtors 16 Bank 100 8,250 Service Revenue 400 7,500 GST Collected Revenue received 28 Wages 660 2,250 Bank 100 2,250 Wages paid 45

7 Introductory Accounting - Accounting to Trial Balance 18. Continued General Ledger of Colin Chan Bank 100 Jun 01 Capital GJ01 30,000 30,000 Dr Jun 02 Rent GJ01 1,650 28,350 Dr Jun 03 Insurance GJ ,020 Dr Jun 05 Motor Vehicle GJ01 10,000 18,020 Dr Jun 07 M Veh Expenses GJ ,855 Dr Jun 09 Accounts Payable GJ01 2,000 15,855 Dr Jun 11 Advertising GJ01 1,760 14,095 Dr Jun 13 Accounts Receivable GJ01 5,000 19,095 Dr Jun 16 Service Revenue GJ01 8,250 27,345 Dr Jun 28 Wages GJ01 2,250 25,095 Dr Accounts Receivable 110 Jun 08 Service Revenue GJ01 16,500 16,500 Dr Jun 13 Bank GJ01 5,000 11,500 Dr Motor Vehicle 170 Jun 05 Bank and Loan GJ01 20,000 20,000 Dr Fittings 174 Jun 02 Accounts Payable GJ01 6,000 6,000 Dr GST Collected 230 Jun 08 Accounts Receivable GJ01 1,500 1,500 Cr Jun 16 Bank GJ ,250 Cr GST Paid 235 Jun 02 Fittings GJ Dr Jun 02 Rent GJ Dr Jun 03 Insurance GJ Dr Jun 05 Motor Vehicle GJ01 2,000 2,780 Dr Jun 07 M Veh Expenses GJ ,795 Dr Jun 11 Advertising GJ ,955 Dr 46

8 Chapter 4: Recording Transactions - Solutions 18. Continued Accounts Payable 210 Jun 02 Fittings GJ01 6,600 6,600 Cr Jun 09 Bank GJ01 2,000 4,600 Cr Loan Payable 260 Jun 05 Motor Vehicle GJ01 12,000 12,000 Cr Capital 300 Jun 01 Bank GJ01 30,000 30,000 Cr Service Revenue 410 Jun 08 Accounts Rec. GJ01 15,000 15,000 Cr Jun 16 Bank GJ01 7,500 22,500 Cr Advertising 605 Jun 11 Bank GJ01 1,600 1,600 Dr Wages 700 Jun 28 Bank GJ01 2,250 2,250 Dr Insurance 720 Jun 03 Bank GJ Dr Motor Vehicle Expenses 725 Jun 07 Bank GJ Dr Rent 750 Jun 02 Bank GJ01 1,500 1,500 Dr 47

9 Introductory Accounting - Accounting to Trial Balance 20. General Ledger of Amme Wal Complete and balance the following accounts. Bank /7 Capital ,000 02/7 Advertising /7 Service Income 400 3,300 15/7 Furniture 150 7,700 28/7 Wages 750 8,250 31/7 Balance c/d 36,800 53,300 53,300 01/8 Balance b/d 36,800 Accounts Receivable /7 Service Income 400 9,900 Furniture and Fittings /7 Bank 100 7,000 GST Collected /7 Bank /7 Acc Receivable ,200 GST Paid /7 Bank /7 Balance c/d /7 Acc Payable /7 Bank /8 Balance b/d 790 Accounts Payable /7 Supplies Expense

10 Chapter 4: Recording Transactions - Solutions Capital /7 Bank ,000 Service Revenue /7 Bank 100 3,000 22/7 Acc Receivable 110 9,000 12,000 Advertising /7 Bank Wages /7 Bank 100 8,250 Supplies Expense Purchases /7 Acc Payable

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