Incomplete Records

Question 1

What are the Dr and Cr on a Receivables Ledger Control Account?

Answer 1

Dr: Bal b/d , Credit Sales
Cr: Bank, Disc All, Contra, Bad debt, Sales Returns, Bal c/d

Question 2

What are the Dr and Cr on a Payables Ledger Control Account?

Answer 2

Dr: Bank, Purchase Returns, Discounts Rec, Contra, Bal c/d
Cr: Bal b/d, Credit Purchases

Question 3

What is a kep point to note about the balance in a bank statement and the balance in the cash book?

Answer 3

The bank statement shows the balance from their perspective so if a balance on a bank statement is in credit that means there is a debit potivie bank balance in the business records

If the bank account balance is overdrawn then there is a credit balance.

Question 4

How to find out a missing value in a ledger account?

Answer 4

Try to 100% complete the Dr side and the Cr side of the account, the opposite side of the figure your trying to find out.

For example, Payables ledger account and trying to find out the purchases. Purchases is on the credit side of the account, so try and fill out the debit side completely first.

Question 5

What are the bank T accounts Dr and Cr’s?

Answer 5

Dr - Amounts from Credit Customers, Interest received, Cash sales banked
Cr - Amounts to Credit Suppliers, General Expenses, Purchases, Drawings, loan

Question 6

What is the formula for Margin?Using 25% as an example

Answer 6

Here gross profit is expressed as 25% for this example:
Sales - 100%
COGS - 75%
Gross Profit - 25%

Question 7

What is the formula for Markup? Using 30% as an example

Answer 7

Here the markup in this example is 30%:
Sales - 135%
COGS - 100%
Gross Profit - 35%

Question 8

For a makrup question, if you have the Sales figure (221,000) only how would you find out the 100% of COGS, use 30%

Answer 8

221,000 (sales) x 1.3 = 170,000 COGS

Question 9

What is the double entry for goods drawn by the owner in cash and goods for their own use?

Answer 9

Drawings of cash:
Dr - Drawings
Cr - Cash

Drawings of goods:
Dr - Drawings
Cr - Purchases

Question 10

At what value are the drawings of goods recorded at?

Answer 10

Cost of the business not the sale price

Question 11

If the owner withdraws two units for his personal use how will COGS look?

Answer 11

Sales

COGS:
Opening Invenotry
Purchases
- Drawings (2 x cost price)
- Closing Inventory

Gross profit = Sales - COGS