Professional Documents
Culture Documents
Introduction
Basic Accounting
What is Accounting?
Debit
ASSETS
CAPITAL
Credit
LIABILITIES
Credit
Debit
FIXED ASSETS
ASSETS
Assets which have a long
life
bought
with
the
intention
to use
ISDC
ACCOUNTING
COLLEGE-9143342,
www.isdcedu.weebly.com
Resource
owned by
a business, which 8154724.
has a
them in the business and not
value
with the intention to simply sell
them
Premises
Land
Building
Fixture & Fittings
Motor Vehicles
Machinery
Debtors/Credit Customers
ASSETS
Cash inCURRENT
Hand
Cash at Bank
assets of an organization
ClosingThe
stock
are constantly changing
Prepaidthat
Expenses
Account
Receivable
their form and are circulating
from cash to goods and cash
again.
LIABILITIES
Which of the following statement
shows calculation of capital?
The borrowing or loan taken by the business.
A
Assets +
LONG TERM LIABILITIES
Capital = Liabilities
B
Liabilities
An=
amount
Capital
Assets owed that does not
have to be repaid within
the =
next
C
Capital
accounting
period (Usually liability
Assets
+ Liabilities
D
Capital =
for more than one year)
Assets Liabilities
CURRENT LIABILITIES
Which one of the following is a
Amount owed by a business to
liability?
other organizations and individuals
that should be paid within
onefor
A
Creditors
financial period. (Usually one year)
goods
6.
A firm
receives money from its debtors by cheque.
What is the effect on assets & liabilities?
Effects upon Assets
Liabilities
Reduce Bank
Debtors
Increase Bank
Debtors
Increase Cash
Loan
Increase Stock
Capital
7.
B
Motor
correct figure:
Vehicles
CAPITAL
=Cash at bank
ASSETS
LIABILITIES
C
The investment contributed by the
Brain
Storm to an organization Machinery
to enable it to
D proprietors
function. The amount of the value of assets
7850
Circle
correct option
for every given question and evaluate your knowledge
ofthe
a business
less liabilities.
Liability can be defined as:
8200
Effects upon
Reduce
Decrease
Increase
Decrease
Identify the
Assets
Liabilities
Capital
1250
6600
2800
11000
1150
1120
6540
1120
9550
A
Cash
balance
5420
B
Loan from J
owners
C
Buildings
8.
A sole trader
D
Customers
ISDC ACCOUNTING
COLLEGE-9143342,
8154724. www.isdcedu.weebly.com
has premises 25000, bank 1500, stock
22500 and sundry creditors 5000. What is
the capital?
Which of the following is not an asset?
Overall rating:
you listen to my lecture
9-9>Bravo
7-9>Good
JOURNAL ENTRIES
Basic Accounting
Left Hand side of (T) a/c
increase in Asset
Decrease in Liabilities
Decrease in Capital
DEBIT
CREDIT
Step (2)
Step (3)
transaction.
or decreasing.
EXERCISE 2.1
Prepare journal entries for the month ended 31 December 2008 in the books of G Powell to
record the following transaction:
Dec
Dec
Dec
Dec
planers Ltd.
Dec
8
Sold some of the office furniture-not
suitable for the firm- for 60 on credit to J walker.
Dec
10
Dec
21
Dec
23
750 by cheque.
60 in cash
EXERCISE 2.2
Prepare journal entries for the month ended 30 june 2008 in the books of C Williams to
record the following transaction:
June
June
June
June
12
June
18
June
25
June
28
June
30
June
30
cash
by cheque.
use.
by cheque.
EXERCISE 2.3
Prepare journal entries for the month ended 30 June 2008 in the books of C Walsh to record
the following transaction:
June
June
June
June
June
12
June
15
June
19
June
21
Young Ltd.
800
Jarvis.
25
June
30
bank account
cheque 300.
EXERCISE 2.4
Prepare journal entries for the month ended 30 March 2008 in the books of Jason Jarvis to
record the following transaction:
March
March
March
March
March
15
March
17
March
24
March
31
800.
EXERCISE 2.5
Prepare journal entries for the month ended 31 July 2008 in the books of Allen Border to
record the following transactions:
July
July
8000 cash.
cheque.
ISDC ACCOUNTING COLLEGE-9143342, 8154724. www.isdcedu.weebly.com
July
July
12
July
15
July
18
July
23
July
25
July
28
by cash.
by cheque.
cash.
`
cheque.
bank account.
cheque 200.
Brain Storm
CIRCLE THE CORRECT OPTION FOR EVERY GIVEN QUESTION AND EVALUATE YOUR
KNOWLEDGE
6.
7.
10.
Dr.
Dr.
Dr.
Dr.
Creditors
Machinery
Creditors
Machinery
Cr.
Cr.
Cr.
Cr.
Machinery
Cash
Machinery
Creditors
LEDGER ACCOUNT
Basic Accounting
Ledger Account is prepared for recording individual information of business transaction.
Sales
300
0
Sales
Smith account
sales
500
0
Sales
account
Alex account
600
0
Roger
Smith
Alex
3000
5000
6000
Balance
b/d
1000
0
5000
1500
0
8600
Roger
3000
Rent
Purchase
1200
2000
Balance c/d
8600
1500
0
Types of Account
Sales, Purchase, Return inward, Return outward, Carriage inward &
Waterhouse expense
Incomes: Discount received, Bad debts recover, Rent receivable
Expenses: Discount allowed, Bad debts, Carriage outward, Heat & Light,
Rent, Postage & stationary, Insurance, Salaries & Other operating
expenses.
Fixed Assets: Land & Building, Premises, Office furniture, Machinery
Current Assets: Debtors, Bank, Cash, Prepaid expense, Stock
ISDC ACCOUNTING COLLEGE-9143342, 8154724. www.isdcedu.weebly.com
Closed by
Trading Account
Profit & Loss
account
Profit & Loss
account
Balance c/d
Balance c/d
Balance c/d
Balance c/d
STOCK
Basic Accounting
Stock, i.e. the products or supplies of a business on hand or in transit at any time. For
manufacturing business types of inventory are raw materials, work in progress and finished
goods. Ending stock treated as current assets in balance sheet
Debtors a/c
Mr X
Sales a/c
3000 debit
Mr Y
3000 credit
In case of goods sold for cash, bank or to credit customer, SALE ACCOUNT is prepared
Receive faulty Goods of 500 from
Mr Y
Mr X
500 debit
Debtors a/c
500 credit
Mr Y
Mr X
Purchase a/c
Creditors a/c
4000 debit
Mr Z
4000 credit
In case of goods purchased by cash, bank or from credit supplier, PURCHASE ACCOUNT is
prepared
Return faulty Goods of 600 to Mr Z
Mr X
ISDC ACCOUNTING COLLEGE-9143342, 8154724. www.isdcedu.weebly.com
Mr Z
Creditors a/c
Reurned Outward a/c
600 debit
600 credit
EXERCISE 4.1
In the book of Bob Marley the following transaction took place for the month
ended 30 January 2009:
1 Jan
2 Jan
9 Jan
11 Jan
12 Jan
13 Jan
14 Jan
19 Jan
20 Jan