Cambridge IGCSE and O Level Accounting

Coursebook answers

Chapter 4

 Answer
 Answerss to
to test
test yo
yours
urself
elf que
questi
stions
ons

Test yourself 4.1

1 One rom:
• makes it more convenient to use as the same types o account are kept together
• the task o maintaining the ledger can be divided between several people
• checking procedures can be introduced
• may reduce the possibility o raud.
2 a nominal ledger
b nominal ledger
c purchases ledger
d nominal ledger
e nominal ledger
f sales ledger

Test yourself 4.2

1 A contra entry appears on both sides o the cash book. It appears in the debit column o either
the cash or bank and the credit column o the other account. 1
2 Business cash is paid into the bank and cash is withdrawn orm the bank or business use.

Test yourself 4.3

1 It is impossible to take out more cash than is physically present in the cash box, so there can
never be an overdrawn cash balance.
2 A bank overdra occurs when the money taken rom the bank is greater than the balance in the
bank. This represents the amount owed to the bank.
3 Cash discount may be allowed to encourage credit customers to pay their accounts promptly/
within a set period o time.
4 A dishonoured cheque is a cheque received which the customer’s bank reuses to pay. This may
may be
because there is not enough money in the bank account or because there is an error on the cheque.

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Cambridge IGCSE and O Level Accounting

 Answer
 Answerss to
to exa
exam-sty
m-style
le que
questi
stions
ons
1 B
2 a
Mariam
Cash book
Date Details Fo. Cash Bank Date Details Fo. Cash Bank
$ $ $ $

20 –2 20 –2
Mar 1 Balance b/d Mar 1 Balance b/d
  7 Nawaz 4 Repairs to ofice equipment
  27
27 Sales 2 150 11 Motor vehicle 5 130
  31
31 Cash c 1 080 13 Drawings 1 500
Balance c/d 6 513 19 Anwar 286
  21 Ofice expenses 67
  28
28 Wages 953
  31
31 Bank c 1 080
2 250 8 703 Balance c/d 2 150 8 703
2 250 7 703 2 250 7 703
20 –2 20 –2

Apl 1 Balance b/d Apl 1 Balance b/d  

b The credit balance represents a bank overdra when more money was taken rom the
account than the amount in the bank.
2
c It is not possible to spend more money than there is in the cash box.
d A contra entry occurs when business cash is transerred to the bank or when cash is
withdrawn rom the bank or business use. A contra entry took place on March when all
the cash except $150 was paid into the bank.
3 A
4 B
5 a–d 

Samuel
Cash book
Date Details Fo. Discount Cash Bank Date Details Fo. Discount Cash Bank
allowed received
$ $ $ $ $ $
20 –5 20–5
Oc t 1 Balances b/d 5 150 Oct 4 Adele 7 343
12 Sales 250 1 220 9 Motor vehicle 9 50 0
15 Paul 160 19 Drawings 1 000
26 Jasmine 22 8 58 24 Ofice expenses 35
30 Cash c 45 29 Paul (dis.chq) 160
31 Balance c/d 3 570 30 Bank c 45
22 160 11 003   31
31 Balance c/d 7 180 11  003
11

22 160 11 003 7 160 11 003

20–5 220 –2
Nov 1 Balance b/d 280 Nov 1 Balance b/d 3 570

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Cambridge IGCSE and O Level Accounting

Sales ledger
Paul account
Date Details Fo. $ Date Details Fo. $
20–5 20 –5
Oct 1 Balances b/d 160 Oct 15 Bank 160
  29 Bank (dis chq) 160 Oct   31 Balance
Oct c/d 160
320 320
20–5
Nov 1 Balance b/d 160

Jasmine account
Date Details Fo. $ Date Details Fo. $
20–5 20 –5
Oc t 1 Balances b/d 88 0 Oct 26 Bank 85 8
880 Discount 322
8 80 8 80

Purchases ledger
Adele account
Date Details Fo. $ Date Details Fo. $
20–5 20 –5
Oc t 4 Balances 343 Oc t 1 Balance b/d 350
Discount 3577
35 3
350 350

Nominal ledger
Motor vehicles account
Date Details Fo. $ Date Details Fo. $
20–5
Oc t 9 Bank 9 500

Sales account
Date Details Fo. $ Date Details Fo. $
20–5
Oct 12
12 Cash 5550
55 50
Bank 1 220

Drawings account
Date Details Fo. $ Date Details Fo. $
20–5
Oct 19 Ba
Bank 1 00 0

Ofice expenses account

Date Details Fo. $ Date Details Fo. $
20–5
Oct 24 Cash 35

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Cambridge IGCSE and O Level Accounting

Discount allowed account

Date Details Fo. $ Date Details Fo. $
20–5
Oct 31 Total or month 22

Discount received account

Date Details Fo. $ Date Details Fo. $
20–5
Oct 31 Total or month 7

6 a–c
Kalpana
Cash book
Date Details Fo. Discount Cash Bank Date Details Fo. Discount Cash Bank
allowed $ received
$ $ $ $ $
20 –8 20 –8
Feb 1 Balances b/d 100 Feb 1 Balance b/d 48 0
15 Sales 10 60 0 11 Purchases 390
19 Srivastava 6 194 Carriage inwards 10
25 Rent 40 0 21 General 75
receivable expenses
28 Cash c 335 23 A hm e d 8 312
Balance c/d 78 27 Repairs to ixtures
Re 15
28 Bank c 335 4
6 160 1 003 28 Balance c/d 7 100 1 207
6 510 1 207 8 510 1 207
20–8 20 –8
Mar 1 Balance b/d 100 Mar 1 Balance b/d 78

Sales ledger
Srivastava account
Date Details Fo. $ Date Details Fo. $
20–8 20 –8
Feb 1 Balances b/d 200 Feb 7 Sales returns 50
3 Sales 300 19 Bank 194
Discount 6
28 Balance c/d 250
500 500
20–8
Mar 1 Balance b/d 250

Purchases ledger
Ahmed account
Date Details Fo. $ Date Details Fo. $
20–8 20 –8
Feb 23 Bank 312 Feb 1 Balance b/d 320
Discount 8
320 320

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Cambridge IGCSE and O Level Accounting

Nominal ledger
Premises account
Date Details Fo. $ Date Details Fo. $
20–8
Feb 1 Balance b/d 60 0 0 0

Fixtures and ittings account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 1 Balance b/d 5 500

Capital account
Date Details Fo. $ Date Details Fo. $
20–8
Feb 1 Balance b/d 65 50 0

Sales account
Date Details Fo. $ Date Details Fo. $
20–8
Feb 3 Srivastava 300
Fe 15 Bank 600
Cash 10

Sales returns account 5

Date Details Fo. $ Date Details Fo. $

20–8
Feb 7 Srivastava 50

Purchases account
Date Details Fo. $ Date Details Fo. $
20–8
Feb 11 Bank 390

Carriage inwards account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 11 Bank 10

General expenses account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 21 Cash 75

Rent receivable account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 21 Cash 40 0

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Cambridge IGCSE and O Level Accounting

Repairs to ixtures account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 27 Bank 15

Discount allowed account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 28 Total or month 6

Discount received account

Date Details Fo. $ Date Details Fo. $
20–8
Feb 28 Total or month 8

  d
Kalpana
Trial Balance at 28 February 20–8
Debit Credit
$ $
Cash 100
Bank 78
Srivastava 250
6
Premises 60 0 00
Fix tures and ittings 5 500
Capital 65 0 00
Sales 910
Sales returns 50
Purchases 390
Carriage inwards 10
General expenses 75

Rent receivable 40 0
Repairs to ix tures 15
Discount allowed 6
Discount received 8
66 396 66 396

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