ZIMSEC O Level Principles of Accounts Notes: Balancing off the Accounts Example
- We have already looked at the steps you need to take when balancing off the accounts here
- We will now look at a simple example:
The following transactions took place in the books of Esnath Pasipanodya in the month of August
1 Credit sales G Wadii $310; K Huni $42; F Dube $1,100; M Shumba $309.
2 Credit purchases from T Simba $190; J Nhata $63; P Muchena $210; F Dombo $190.
8 Credit sales to K Huni $161; F Dube $224.
9 Credit purchases from J Nhata $215; F Dombo $164.
10 Goods returned to us by F Dube $31; M Shumba $82.
12 Cash paid to us by M Shumba $227.
15 We returned goods to T Simba $15; F Dombo $21.
19 We received cheques from F Dube $750; G Wadii $310.
21 We sold goods on credit to G Wadii $90; K Huni $430.
28 We paid by cheque the following: T Simba $175; F Dombo $100; P Muchena $180.
31 We returned goods to F Dombo $18.
- Enter the above transactions in personal accounts only.
- Balance off the accounts for the end of the month
- Calculate the total figures for Creditors and Debtors
|Dr||T Simba Account|
|15 August||Returns Outwards||15||2 August||Purchases||190|
|J Nhata Account|
|31 August||Balance c/d||278||2 August||Purchases||63|
|1 September||Balance b/d||278|
|P Muchena Account|
|28 August||Bank||180||2 August||Purchases||210|
|31 August||Balance c/d||30|
|1 September||Balance b/d||30|
|F Dombo Account|
|15 August||Returns Outwards||21||2 August||Purchases||190|
|28 August||Bank||100||9 August||Purchases||164|
|31 August||Returns Outwards||18|
|31 August||Balance c/d||215|
|1 September||Balance b/d||215|
|Dr||G Wadii Account||Cr|
|1 August||Sales||310||19 August||Bank||310|
|21 August||Sales||90||31 August||Balance c/d||90|
|K Huni Account|
|1 August||Sales||42||31 August||Balance c/d||633|
|1 September||Balance b/d||633|
|F Dube Account|
|1 August||Sales||1100||10 August||Returns Inwards||31|
|8 August||Sales||224||19 August||Bank||750|
|31 August||Balance c/d||543|
|1 September||Balance b/d||543|
|M Shumba Account|
|1 August||Sales||309||10 August||Returns Inwards||82|
- You are being asked to show entries in the personal accounts i.e. Purchases and Sales Ledger Accounts. Accounts in the Cash Book and General Ledger are known as nominal accounts
- General Ledger entries can be a bit daunting to new comers when it comes to balancing them as some of them are closed off at the end of the period e.g. Expense accounts are “balanced off” by transferring them to the Profit and Loss Account
- The order of the accounts in not important nor is the order of the ledgers we could have started with the Sales Ledger and the solution would still be acceptable. The accounts within the ledgers can be presented in any order
3) Here is the list of total creditors and debtors
- The total accounts payable(Trade Creditors) is: $523
- The total for accounts receivable( Trade Debtors) is: $1176
- To find these figures all you need to do is add up all the balances for creditors and debtors
To access more topics go to the Principles of Accounts Notes.