3. Double entry

Question 1

Contribution by owner. Eg Owner contributed Bank $500 and furniture $700

Answer 1

Dr Cash at Bank(+) 500
Dr Fixtures and fittings(+) 700
Cr Capital(+) 1200

Question 2

Drawings of assets by owner for own used.Eg owner draws of motor vehicles $5000 for own use

Answer 2

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

Question 3

Drawings of goods by owner.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/chequeEg Business bought motor vehicles $2000 by cheque

Answer 4

Dr Motor Vehicles(+) 2000

Cr 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 bought assets on credit. Eg Business bought motor vehicles $2000 on credit from Breezy Ltd

Answer 6

Dr Motor Vehicles(+) 2000

Cr Trade payable, Breezy Ltd(+) 2000

Question 7

Business bought goods by cash/cheque. Eg Business bought goods $600 for resale by cheque.

Answer 7

Dr   Inventory(+)              600
Cr        Cash at bank(-)        600

Question 8

Business bought goods on credit. Eg Business bought goods $600 on credit from Peter.

Answer 8

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

Question 9

Business bought goods on credit. Eg Business bought goods $600 on credit from Redhill.

Answer 9

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

Question 10

Business return goods that were bought by cash/cheque. Eg Business returned goods worth $120 that was previously purchased by cheque.

Answer 10

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

Question 11

Business return goods that were bought on credit. Eg Business returned goods worth $120 that was bought on credit from supplier John.

Answer 11

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

Question 12

Business paid credit supplier Mary $400

Answer 12

Dr Trade Payable, Mary(-) 400

Cr Cash at bank (-) 400

Question 13

Business paid supplier with cash discount. E.g Business owed supplier, John $400. Business paid john by cheque with cash discount of 10%

Answer 13

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

Question 14

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

Answer 14

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

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

Question 15

Sold goods on credit. Eg Business sold goods worth $400 to customer, Kelvin on credit for $700

Answer 15

Dr Trade Receivable, Kelvin (+) 700
Cr Sales Revenue (+) 700

Dr     Cost of Sales (+)    400
Cr           Inventory (-)          400

Question 16

Customer returned goods that were sold to him by cash/cheque. Eg Cash Customer, Ali who bought goods for $70, returned the goods to business. The worth of the goods is $50

Answer 16

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

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

Question 17

Customer returned goods that were sold to him on credit. Eg Customer, Helen who bought goods for $260 on credit, returned the goods to business. The worth of the goods is $200

Answer 17

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

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

Question 18

Customer, Sally owing $300 paid business.

Answer 18

Dr Cash at Bank (+) 300

Cr Trade Receivable, Sally (-) 300

Question 19

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

Answer 19

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

Question 20

Business obtain a bank loan $3000

Answer 20

Dr Cash at bank(+) 3000

Cr Bank loan(+) 3000

Question 21

Business repaid the bank loan $2000

Answer 21

Dr Bank loan(+) 2000

Cr Cash at bank(-) 2000

Question 22

Paid Expenses. Eg Business paid salary $500

Answer 22

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

Question 23

Received income. Eg Business received interest $250

Answer 23

Dr Cash at Bank(+) 2500

Cr Interest income(+) 2500