Incomeplete Records - 30%

Question 1

Accounting Equation

Answer 1

Assets - Liabilities = Proprietor’s Capital

Question 2

What is the formula for the closing balance on the Sales Ledger Control Account ?

Answer 2

Opening sales ledger control account + sales - cash receipts= sales ledger control account

Question 3

What is the formula for the closing purchase ledger control account ?

Answer 3

Opening purchase ledger control account balance + purchases - cash payments = Closing purchase ledger control account

Question 4

Whar does the bank nominal ledger account record ?

Answer 4

All the business’s transaction, which go through the bank account

Question 5

Examples of business transactions

Answer 5

Automated receipts
Cheques
Direct debits
Standing orders
Money taken of the cash account and bank account
Money taken out of the bank account to put into the cash account

Question 6

Where are items that increase the bank balance shown on the nominal ledger

Answer 6

On the Debit side

Question 7

Where are the items that decrease the bank balance shown ?

Answer 7

On the CREDIT side

Question 8

What are drawings ?

Answer 8

Then the owner takes good or money out of the business for their own personal use.

Question 9

What is the double entry for drawings ?

Answer 9

DEBIT drawings
CREDIT Cash

Question 10

What is the step by step approach to incomplete record questions

Answer 10

1. Find opening balances - you may need to find the opening capital using the accounting equation
   ( Net assets = proprietors intrest)
2. Set out the following ( as far as possible )
   - statement of profit or loss
   - statement of financial position
3. Open ‘T’ accounts
   - sales ledger control account
   -Purchase ledger control account
   - bank account
   - cash account