- You are required to open the asset and liability and capital accounts and record the following transactions for June 20X8 in the records of T. Moyo. 20X8
- June 1 Started business with $12,000 in cash.
- 2 Paid $11 700 of the opening cash into a bank account for the business.
- 5 Bought office furniture on credit from Musorowegomo Ltd for $1 900.
- 8 Bought a van paying by cheque $5 250.
- 12 Bought equipment from Mutape and Sons on credit $2 300.
- 18 Returned faulty office furniture costing $120 to Dream Ltd.
- 25 Sold some of the equipment for $200 cash.
- 26 Paid amount owing to Musorowegomo Ltd $1 780 by cheque.
- 28 Took $130 out of the bank and added to cash
- 30 E Makandiwa lent us $4 000 – giving us the money by cheque.
- Always remember the following steps.
- The first step is to identify the accounts involved.
- The second step is to identify the account “Receiving” and therefore is to be debited.
- The third step is to identify the account which is “giving” and therefore is to be credited.
- With practice you can become more proficient and will not need this checklist.
Solution
DATE | ACCOUNT DEBITED | ACCOUNT CREDITED | AMOUNT |
---|---|---|---|
1 June | Cash | Capital | $12 000 |
2 June | Bank | Cash | $11 700 |
5 June | Office Furniture | Musorowegomo | $1 800 |
8 June | Van | Bank | $5 250 |
12 June | Equipment | Mutape and Sons | $2 300 |
18 June | Musorowegomo | Office Furniture | $120 |
25 June | Cash | Equipment | $200 |
26 June | Musorowegomo | Bank | $1780 |
28 June | Cash | Bank | $180 |
30 June | Bank | E Makandiwa | $4 000 |
To revise go back to the notes on Double Entry accounting.
To access more topics to the Principles of Accounts Notes page.