FUN PACK 2

Question 1

State 2 double entry rules.

Answer 1

1. Every debit entry will have a corresponding credit entry.

2. The total amount of debits must be equal to the total amount of credits.

Question 2

Give the double entry to record purchase of inventory by cheque, $400

Answer 2

Dr Inventory $400

Cr Cash at bank $400

Question 3

Give the double entry to record credit purchase of inventory, $1 600.

Answer 3

Dr Inventory $1 600

Cr Trade payable $1 600

Question 4

Give the double entry to record payment of rent by cheque, $1 800.

Answer 4

Dr Rent expense $1 800

Cr Cash at bank $1 800

Question 5

Give the double entry to record the purchase of office furniture on credit, $6 000

Answer 5

Dr Office furniture $6 000

Cr Other payable $6 000

Question 6

Give the double entry to record the cash sale of inventory $450. The inventory cost $280.

Answer 6

Dr Cash in hand $450
Cr Sales revenue $450
Dr Cost of sales $280
Cr Inventory $280

Question 7

Give the double entry to record the credit sale of goods to Rachel, $600. The cost of the inventory sold was $390.

Answer 7

Dr Trade receivable Rachel $600
Cr Sales revenue $600
Dr Cost of sales $390
Cr Inventory $390

Question 8

The owner took inventory $300 for own use. The double entries are:

Answer 8

Dr Drawings $300

Cr Inventory $300

Question 9

The owner paid for his personal expenses $1 700 with business cheque. The double entries are:

Answer 9

Dr Drawings $1 700

Cr Cash at bank $1 700

Question 10

The owner brought into business a computer worth

$1 800. The double entries are:

Answer 10

Dr Office equipment $1 800

Cr Capital $1 800

Question 11

Write off Wong’s debt of $320 as irrecoverable.

Answer 11

Dr Allowance for impairment of trade receivables $320

Cr Trade receivable Wong $320

Question 12

Give double entries to record the return of cheque by the bank, $280. This cheque was received from Anne.

Answer 12

Dr Trade receivable Anne $280

Cr Cash at bank $280

Question 13

Give double entries to record the depreciation of motor vehicles, $3 800

Answer 13

Dr Depreciation on motor vehicles $3 800

Cr Accumulated depreciation on motor vehicles $3 800

Question 14

Give double entries to record accrued interest $300.

Answer 14

Dr Interest expense $300

Cr Accrued interest expense $300

Question 15

Give the double entries to record a cheque issued to credit supplier Tom, $440, to settle a debt of $480 in full.

Answer 15

Dr Trade payable Tom $480
Cr Cash at Bank $440
Cr Discount received $40

Question 16

Give the double entries to record loan borrowed, $6000.

Answer 16

Dr Cash at bank $6 000

Cr Loan $6 000

Question 17

Give double entries to adjust prepaid insurance, $50

Answer 17

Dr Prepaid insurance expense $50

Cr Insurance expense $50

Question 18

Business returned goods $300 to credit supplier Poh.

Answer 18

Dr Trade payable Poh

Cr Inventory $300

Question 19

Credit customer Ho returned goods sold to him at $60. The goods returned cost $48. What are the double entries needed?

Answer 19

Dr Inventory $48
Cr Cost of Sales $48
Dr Sales returns $60
Cr Trade receivable Ho $60

Question 20

Give the double entries to post profit for the year $1350 to capital.

Answer 20

Dr Profit and Loss $1 350

Cr Capital $1 350