Double Entry System – Practice Question 04

This is a question from the grade 10 Business and Accounting Studies textbook.

Chapter 06 – Activity 04 – page, 76

The following cash book has been prepared by the accounting clerk of Sameera’s business by including transactions that have occurred during the month of January 20xx.

Required:

1. Describe the transaction for each entry listed in the cash account in
   chronological order.
2. Record the other entries relevant to the transactions listed in the above
   cash account in the respective other accounts in the ledger of Sameera’s business.

Answers

1.

01.01         Owner invested Rs. 80 000 as capital to the business

06.01         Sold stock of goods for Rs. 60 000

07.01         Obtained a bank loan of Rs. 100 000

09.01         Purchased stock for Rs. 50 000

12.01         Purchased equipment for Rs. 80 000

15.01         Paid electricity chargers Rs. 10 000

18.01         Opened an investment of Rs. 40 000

22.01         Paid bank loan interest Rs. 10 000

25.01         Paid to a creditor Rs. 5 000

27.01         Received interest income Rs. 12 000

30.01         Received Rs. 4 000 from a debtor.

2.