Double Entry

Question 1

Bought delivery vans worth $80 000 from Damien Dealership on credit. The business issued a cheque of $15 000 while Jordan, the owner, also paid $12000. The rest is to be repaid in the next 5 years.

Answer 1

Motor vehicles 80 000 Dr
Cash at bank 15 000 Cr
Capital 12 000 Cr
TP: Damien Dealership 53 000 Cr

Question 2

Bought $300 goods from Pax Supplies and paid by cheque.

Answer 2

Inventory 300 Dr

Cash at bank 300 Cr

Question 3

Bought $740 goods from Ron Supplies on credit.

Answer 3

Inventory 740 Dr
Trade payable: Ron Supplies 740 Cr

Question 4

Business earned $548 from the sale of goods to Jenn on credit. The cost of these goods were $240.

Answer 4

Trade receivable: Jenn 548 Dr
Sales revenue 548 Cr

Cost of sales 240 Dr
Inventory 240 Cr

Question 5

Owner deposited $568 into the business bank account.

Answer 5

Cash at bank 568 Dr

Capital 568 Cr

Question 6

$327 cash had been withdrawn from the business bank account for in-store use.

Answer 6

Cash in hand 327 Dr

Cash at bank 327 Cr

Question 7

Owner withdrew $197 from the business bank account to pay for his son’s tuition fees.

Answer 7

Drawings 197 Dr

Cash at bank 197 Cr

Question 8

Utilities amounting to $865 were paid by cheque.

Answer 8

Utilities expense 865 Dr

Cash at bank 865 Cr

Question 9

Goods sold for $520 was returned by Jarrod. The goods cost $390.

Answer 9

Sales returns 520 Dr
Cash at bank 520 Cr

Inventory 390 Dr
Cost of sales 390 Cr

Question 10

Business bought goods $478 on credit from Tim Trading.

Answer 10

Inventory 478 Dr

Trade payable: Tim Trading 478 Cr

Question 11

On 4 October 2020, $3590 worth of goods were stolen, The business made an insurance claim and the insurance company agreed to compensate $800 on 30 November 2020.

Answer 11

Impairment loss on inventory (3590-800) 2790 Dr
Insurance claim receivable 800 Dr
Inventory 3590 Cr

Question 12

Returned damaged goods $682, previously bought on credit, to Jordan.

Answer 12

Trade payable: Jordan 682 Dr
Inventory 682 Cr

Question 13

Business paid for rental space of business by cheque, $3500.

Answer 13

Rental expense 3500 Dr
Cash at bank 3500 Cr

Question 14

Business sold goods amounting to $1290 and received payment by cheque. The goods cost $200.

Answer 14

Cash at bank 1290 Dr
Sales revenue 1290 Cr

Cost of sales 200 Dr
Inventory 200 Cr

Question 15

Business paid for a printer costing $1689 by cheque.

Answer 15

Office equipment 1689 Dr
Cash at bank 1689 Cr

Question 16

Business took a loan of $3400 from OCS Bank.

Answer 16

Cash at bank 3400 Dr
Loan from OCS Bank 3400 Cr

Question 17

The owner of the business took out goods $2390 for personal use.

Answer 17

Drawings 2390 Dr

Inventory 2390 Cr

Question 18

One unit of inventory purchased at $400 was found to be damaged and is expected to be sold for $320 after repairing it at a cost of $30

Answer 18

Impairment loss on inventory 110 Dr
Inventory 110 Cr

Net realisable value=Expected selling price - additional cost
NRV=$320 - $30
=$290

Question 19

Business sold $2000 worth of inventory on credit for $5700

Answer 19

Trade receivable 5700 Dr
Sales revenue 5700 Cr

Cost of sales 2000 Dr
Inventory 2000 Cr

Question 20

Business had $5900 worth of inventory. However, $800 worth of inventory was destroyed in a fire

Answer 20

Impairment loss on inventory $800
Inventory $800