4. Double Entries

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 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 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 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(+) 250

Cr Interest income(+) 250