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Accounts Exercises

The document contains transactions to be entered in Ajay's ledger for January. It lists dates and details of goods sold and purchased on credit by Ajay, returns, payments and loans. It also contains additional transactions on January 1 regarding Ajay starting the business and various initial expenses paid.

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Malaahat Bhugeloo
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22 views2 pages

Accounts Exercises

The document contains transactions to be entered in Ajay's ledger for January. It lists dates and details of goods sold and purchased on credit by Ajay, returns, payments and loans. It also contains additional transactions on January 1 regarding Ajay starting the business and various initial expenses paid.

Uploaded by

Malaahat Bhugeloo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Enter these transactions in Ajay’s ledger.

January 21- Ajay sold goods, $245, on credit to Xavier Traders

- 22- Xavier Traders returned damaged goods, $55, to Ajay


 23- Ajay purchased goods, $820, on credit from Varun
 25- Xavier Traders paid their account by cheque
 27- Ajay returned faulty goods, $44, to Varun
 30- Ajay gave Varun a cheque for $700 on account

Double entry records for expenses and income

Enter these transactions in Ajay’s ledger.

January 1- Ajay began business with a capital of $80 000 in the business bank account

- 1 He paid rent of premises, $400, by cheque


- 2 Fixtures and equipment costing $30 000 were bought and paid for by cheque
- 3 He paid insurance, $250, by cheque
- 3 A short-term loan of $10 000 was received from AB Loans
- 5 A motor vehicle costing $9 000 was bought and paid for by cheque
- 5 He paid motor expenses, $50, by cheque
- 6 A long-term loan of $5 000 was received from Ajay’s sister Mallika
- 7 Part of the premises were rented out to another business and a cheque for $95 was received

For each of the following transactions, state the name of the account which will be debited and the
name of the account which will be credited.

a. Paid rates by cheque


b. Bought machinery and paid by cheque
c. Received commission by cheque for work done for another business d Repaid, by cheque,
money borrowed from XYZ Loan Co
d. The owner of a business invested more money in the business.
e. The owner of a business took an unused motor vehicle for personal use.
f. The owner of a business took goods for personal use.

1. Explain how to balance a ledger account.


2. Explain the meaning of the term credit purchases.
3. State two reasons why it may be necessary to return goods to a supplier. 4
4. State an alternative name for sales returns.
5. Explain the difference between carriage inwards and carriage outwards.
Debit credit

1 bank Capital 15000


1 cash Capital 5000
2 premises Cash 8000
3 furniture Bank 2000
4 purchases Bank 5000
5 bank Sales 1500
6 insurance Bank 600
7 Motor vehicle Bank 3000
8 Motor expenses Bank 50
9 purchases Bank 2000
10 Bank Sales 2400
10 wages Bank 400
11 Sales return Bank 1200
12 cash Purchases return 900
13 cash Insurance 100
13 Drawings Bank 200
14 cash Purchases return 800
15 Amna cash 1000

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