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Practice Questions - Books of Original Entry

The document provides details of 6 questions regarding accounting transactions for various businesses. The transactions include purchases and sales on credit, returns, payments, discounts, and other activities which need to be recorded in journals, ledgers, and a trial balance. Accounting equations must be maintained and books closed accurately for each set of transactions provided.

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759 views3 pages

Practice Questions - Books of Original Entry

The document provides details of 6 questions regarding accounting transactions for various businesses. The transactions include purchases and sales on credit, returns, payments, discounts, and other activities which need to be recorded in journals, ledgers, and a trial balance. Accounting equations must be maintained and books closed accurately for each set of transactions provided.

Uploaded by

RealGenius (Carl)
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Fundamentals of Accounting

Unit 3 - Books of Original Entry

Question 1

The following transactions occurred at ARH Enterprises for the month of October, 2017

October 1 Sold goods on credit to D. Scott $1 000


October 7 Purchased goods on credit from Y Singh $ 4000 less 20% trade discount
October 8 Goods returned by D. Scott $250
October 9 Sent an invoice to C Letty $3 500
October 15 Goods returned to Y Singh $800
October 20 Received invoice from C Benjy $4 600
October 31 Sold goods on credit to D. Scott $500

(a) Prepare the appropriate Day Books


(b) Prepare the appropriate ledgers
(c) Extract a trial balance as at October 31, 2017

Question 2

The following transactions relate to LTA Traders.

2017
Januar
y
01 Credit Sales: T. Thompson $56; L. Rodriquez $148; K. Barton $145.
03 Credit Purchases: P. Potter $144; H. Harris $25; B. Spencer $76.
07 Credit Sales: K. Kelly $89; N. Mendez $78; N. Lee $257.
09 Credit Purchases: B. Perkins $24; H. Harris $58; H. Miles $123.
11 Goods returned by us to: P. Potter $12; B. Spencer $22.
14 Goods returned to us by: T. Thompson $5; K. Barton $11; K. Kelly $14.
17 Credit purchases: H. Harris $54; B. Perkins $65; L. Nixon $75.
20 Goods returned by us to B. Spencer $14.
24 Credit sales: K. Mohammed $57; K. Kelly $65; O. Green $112.
28 Goods returned to us by N. Mendez $24.
31 Credit sales: N. Lee $55.

REQUIRED:
You are to enter up the sales, purchases, returns inward and returns outward day books from
the following details, then post the items to the relevant accounts in the sales and purchases
ledgers. The totals from the day books are then to be transferred to the accounts in the General
Ledger.
Question 3

The following transactions relate to Readers’ Delight.

2016
July
01 Credit purchases from: K. Hill $380; M. Norman $500; N. Senior $106.
03 Credit sales to: E. Rigby $510; E. Phillips $246; F. Thompson $356.
05 Credit purchases from: R. Morton $200; J. Cook $180; D. Edwards $410;
C. Davis $66.
08 Credit sales to: A. Green $307; H. George $250; J. Ferguson $185.
12 Returns outward to: M. Norman $30; N. Senior $16.
14 Returns inward from: E. Phillips $18; F. Thompson $22.
20 Credit sales to: E. Phillips $188; F. Powell $310; E. Lee $420.
24 Credit purchases from: C. Ferguson $550; K. Ennevor $900.
31 Returns inward from: E. Phillips $27; E. Rigby $30.
31 Returns outward to: J. Cook $13; C. Davis $11.

REQUIRED:
You are to enter the above transactions in the books of original entry, post to personal
accounts, and show the transfers to the General Ledger.

Question 4

From the following information for Felix Compton, record the transactions in the appropriate
journals and then post to the ledger. All transactions are on credit.

May 5 Purchased goods from J. Walker, for $1,000, invoice no. 101
May 3 Purchased goods from M. Miller for $1,250, invoice no.102
May 9 Purchased goods from J. Cutler for $900, invoice no. 103
May 10 Notified M. Miller that goods were faulty and was allowed $50 credit.
Credit note No. 002
May 11 Issued invoice no. 201 to K. Kyle for $3,500.
May 13 K.Kyle returned goods worth $800, credit note no. 003
May 15 Issued invoice no. 202 to J. Irving for $3,500.
May 18 Returned goods worth $300 to J. Walker, credit note no. 001

Question 5

Johnny Warm carries on business as a wholesale shoe dealer. On January 1, 2009 his position
was as follows: Stock of goods $3,500,000; Motor vehicle $1,500,000; Cash at bank $2,500,000;
Cash in hand $100,000; Accounts Receivable (B. Banks) $400,000; Loan $500,000; Accounts
Payable -(R. Frank) $450,000.
During January 2009 he had the following transactions:

1 - Sold goods on credit to M. Murray, $460,000.


4 - Bought goods on credit from Dalton Sisters Ltd, $370,000
7 - Paid wages $150,000 by cheque.
10 - Received $350,000 cash less 5% discount from B. Banks. The amount was banked
forthwith.
14 - Cash sales, $300,000.
17 - Paid R. Frank $280,000 by cheque and received 2½ % discount.
20 - Put $200,000 into the bank and bought stationery $15,000 cash.
25 - Returned damaged goods to Dalton Sisters Ltd, $15,000.

Required:
(a) Prepare Johnny Warm’s opening Journal.
(b) Pass the above transactions through the Journal, Cash Book and Ledger. Close the books
on January 31, 2009, bring down the balances and extract a Trial Balance as at that date.

Question 6

Simon Soldier carries on business as a wholesale dealer of household goods. On October


1, 2011 his position was as follows:

Stock of goods $6,500,000; Motor vehicle $2,500,000; Cash at bank $4,500,000; Cash in
hand $300,000; Accounts Receivable (P. Seller) $400,000; Loan $500,000; Accounts
Payable-(L. Lender) $500,000. During October 2011 he had the following transactions:

October 2011
1- Bought goods on credit from F. Kerry $350,000.
4- Sold goods on credit to Dodd Brothers Ltd, $600,000
7- Bought stationery $55,000 cash.
10- Received $300,000 cash less 2½ % discount from P. Seller and banked the
amount.
14- Cash sales $600,000.
17- Paid L. Lender $300,000 less 5% discount by cheque.
20- Cashed a cheque for $400,000 and paid wages $100,000.
25- Sold goods on credit to T. Tryer $200,000.
31- Banked $380,000.

Required:
(a) Show Simon Soldier’s opening financial position.
(b) Pass the above transactions through the Journal, Cash Book and Ledger. Close the
books on October 31, 2011, bring down the balances and extract a Trial Balance
as at that date.

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