POFA (ACCT 100) Tutorial: Week 2 Chapter 2 - The Recording Process Topics Covered

POFA (ACCT 100)
Tutorial: Week 2
Chapter 2 | The Recording Process
Topics Covered:
1) Journal Entry
2) Posting to Ledger Accounts
3) Preparing a trial balance
Practice Questions
1. In the first month of operations, the total of the debit entries to the cash account amounted to $900
and the total of the credit entries to the cash account amounted to $600. What is the balance in cash
account?
___________________
2. During February 2019, its first month of operations, the owner of Farya Enterprises invested cash
of $50,000. Farya Enterprises had cash revenues of $8,000 and paid expenses of $14,000. Assuming
no other transactions impacted the cash account, what is the balance in Cash at February 28?
___________________
3. Ibrahim set up a small business offering tutoring services. His first set of transactions are shown
below:
1/1/ 2020 Invested PKR 100,000 in the business

5/1/2020 Purchased equipment PKR 80,000 paying PKR 50,000 in cash and signing a note payable
for the remainder
15/1/2020 Billed for tuitions provided worth PKR 30,000 (PKR 20,000 received in cash and PKR 10,000
on credit)
20/1/2020 Repaid PKR 15,000 against note payable
21/1/2020 Collected PKR 8,000 of tuitions receivable
31/1/2020 Paid rent PKR 50,000 (for January)
Required:
a) Record the given transactions

b) Post the journal entries into the ledger (T-accounts)
c) Prepare a trial balance as at January 31, 2020
4. Byte Repair Service Ltd.
Sean Browne owns and manages a computer repair service, which had the following trial balance on
December 31, 2016.
Summarized transactions for January 2017 were as follows.

1. Advertising costs, paid in cash, £1,000.
2. Additional supplies acquired on account £4,000.
3. Miscellaneous expenses, paid in cash, £1,100.
4. Cash collected from customers in payment of accounts receivable £13,000.
5. Cash paid to creditors for accounts payable due £15,000.
6. Repair services performed during January: for cash £5,000; on account £9,000.
7. Wages for January, paid in cash, £3,000.
8. Dividends during January were £2,000
Required:
(a) Prepare journal entries to record each of the January transactions
(b) Open T-accounts for each of the accounts listed in the trial balance, and enter the opening
balances for 2017.
(c) Post the journal entries to the accounts in the ledger.
(d) Prepare a trial balance as of January 31, 2017.
TRIAL BALANCE | ERRORS
5. For each of the four independent cases, state whether the error would cause unequal totals in
the trial balance. If the error causes unequal totals, indicate the amount of difference between
the columns and state whether the debit or credit is larger.
i. A payment of $800 to a creditor was recorded by a debit to Accounts Payable of $80 and a credit
to Cash of $800.
ii. A $480 payment for a printer was recorded by a debit to Computer Equipment of $48 and a credit
to Cash for $48.
iii. An account receivable in the amount of $2,500 was collected in full. The collection was recorded
by a debit to Cash for $2,500 and a debit to Accounts Payable for $2,500.
iv. An account payable was paid by issuing a check for $800. The payment was recorded by debiting
Accounts Payable $800 and crediting Accounts Receivable $800.
6. JASON COMPANY LTD.
Your review of the ledger reveals that each account has a normal balance. You also discover the
following errors.
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Utilities Expense were
each understated £100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on
postings made, the correct balances were £2,570 and £8,960, respectively.
3. A debit posting to Salaries and Wages Expense of £200 was omitted.
4. A £1,000 cash dividend was debited to Share Capital—Ordinary for £1,000 and credited to Cash
for £1,000.
5. A £520 purchase of supplies on account was debited to Equipment for £520 and credited to
Cash for £520.
6. A cash payment of £450 for advertising was debited to Advertising Expense for £45 and credited
to Cash for £45.
7. A collection from a customer for £420 was debited to Cash for £420 and credited to Accounts
Payable for £420.
Required:
Prepare a correct trial balance. Note that the chart of accounts includes the following:
Dividends and Supplies.

POFA (ACCT 100) Tutorial: Week 2 Chapter 2 - The Recording Process Topics Covered

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

POFA (ACCT 100) Tutorial: Week 2 Chapter 2 - The Recording Process Topics Covered

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

POFA (ACCT 100) Tutorial: Week 2 Chapter 2 - The Recording Process Topics Covered

Uploaded by

Copyright:

Available Formats

POFA (ACCT 100)

Chapter 2 | The Recording Process

1/1/ 2020 Invested PKR 100,000 in the business

a) Record the given transactions

Summarized transactions for January 2017 were as follows.

TRIAL BALANCE | ERRORS

6. JASON COMPANY LTD.

You might also like