1. Double Entry

Question 1

Contribution of asset by owner to business.

Eg John contributed $500 cash to business.

Answer 1

Dr Cash in hand 500

Cr Capital 500

Question 2

Withdrawal of assets by owner for personal use.

Eg owner draws of motor vehicles $5000 for own use

Answer 2

Dr   Drawings(+)       5000
Cr       Motor vehicles (-)     5000

Question 3

Withdrawal of assets by owner for own use.

Eg. Drawings of goods $40 by owner for own use

Answer 3

Dr    Drawings(+)      40
Cr         Inventory(-)      40

Question 4

Business bought assets by cash/cheque.

Eg Business bought motor vehicles $2000 by cheque.

Answer 4

Dr Motor Vehicles(+) 2000

Cr Cash in hand / Cash at bank(-) 2000

Question 5

Business bought assets on credit.

Eg Business bought motor vehicles $2000 on credit from John

Answer 5

Dr Motor Vehicles (+) 2000

Cr Trade Payable, John (+) 2000

Question 6

Business withdraw goods $400 to give customers as free sample

Answer 6

Dr   Advertising expenses(+)     400
Cr    Inventory(+)                                 400

Question 7

Business bought goods by cash/cheque.

Eg Business bought goods $600 for resale by cheque.

Answer 7

Dr   Inventory(+)              600
Cr        Cash in hand / Cash at bank(-)        600

Question 8

Business bought goods on credit.

Eg Business bought goods $600 from Peter on credit.

Answer 8

Dr   Inventory (+)              600
Cr        Trade Payable, Peter (+)       600

Question 9

Business returned goods worth $120 that was previously purchased by cheque.

Answer 9

Dr     Cash at Bank(+)    120
Cr         Inventory (-)         120

Question 10

Business returned goods worth $120 that was previously purchased on credit from John.

Answer 10

Dr     Trade Payable, John (-)    120
Cr           Inventory (-)                     120

Question 11

Business paid credit supplier, Peter $400

Answer 11

Dr Trade Payable, Peter(-) 400

Cr Cash at bank (-) 400

Question 12

Business owed supplier, Helen $400, and paid cheque with cash discount of 10%.

Answer 12

Dr Trade Payable, Helen(-) [100%] 400
Cr Cash at bank(-) [90%] 360
Cr Discount received (+) [10%] 40

Question 13

Sold goods by cash/cheque.

Eg Business sold goods worth $300 to customer by cheque for $500.

Answer 13

Dr Cash at bank (+) 500
Cr Sales Revenue (+) 500

Dr     Cost of Sales (+)    300
Cr           Inventory(-)           300

Question 14

Credit sales of goods.

Eg Business sold goods worth $400 to customer, Peter by on credit for $700

Answer 14

Dr Trade Receivable, Peter (+) [Selling price] 700
Cr Sales Revenue (+) [selling price] 700

Dr     Cost of Sales (+) [cost price]      400
Cr           Inventory (-) [cost price]              400

Question 15

Cash Customer returned goods.

Eg Customer, Peter who bought goods $70 by cash, returned the goods to business. The worth of the goods is $50

Answer 15

Dr Sale returns(+) 70
Cr Cash at bank (-) 70

Dr   Inventory (+)            50
Cr      Cost of Sales (-)      50

Question 16

Credit Customer returned goods.

Eg Credit Customer Alan, who bought goods $260 returned the goods to business. The worth of the goods is $200

Answer 16

Dr Sale returns(+) 260
Cr Trade receivable, Alan (-) 260

Dr   Inventory(+)              200
Cr      Cost of Sales (-)           200

Question 17

Customer, Jim owing $300 paid business.

Answer 17

Dr Cash at Bank (+) 300

Cr Trade Receivable, Jim (-) 300

Question 18

Customer, Daniel owing $300 paid business with cash discount of 10%.

Answer 18

Dr Cash at Bank(+) [90%] 270
Dr Discount allowed(+) [10%] 30
Cr Trade Receivable, Daniel (-) [100%] 300

Question 19

Business obtain a bank loan $3000.

Answer 19

Dr Cash at bank(+) 3000

Cr Bank loan(+) 3000

Question 20

Business repaid the bank loan $2000.

Answer 20

Dr Bank loan(+) 2000

Cr Cash at bank(-) 2000

Question 21

Business paid salary $500.

Answer 21

Dr    Salary(+)         500
Cr           Cash at bank(-)    500

Question 22

Business received interest $250.

Answer 22

Dr Cash at Bank(+) 2500

Cr Interest income(+) 2500