1.

a) State (i) the most appropriate source document and (ii) the book of original entry which Satar should use for
each of the transactions below.

Transaction (i) Source Document (ii) Book of Original Entry

Satar returned some goods Debit note Return Outwards
previously purchased
The total cash sales for the week Cash Bill / Cash Register Slip Cash book
was from the cash register was
recorded
Sold an old computer (no longer Email General Journal
suited for use) on credit to
Golden Grove Primary School,
acceptance of the offered was
given by email.
A customer, Jalan Rodney was Sales Invoice Sales Day Book
sold a large quantity of goods on
credit
Satar purchased postage stamps Petty Cash Voucher Petty Cash Book
totaling a small value

2. A) Prepare Satar’s Three column cash book from the transactions below, and balance the cash book
appropriately.

February 1. Balances brought forward, cash $350 ; bank overdraft $5000.

2 Thompson who had an account balance of $8000 paid in full by cheque, after deducting 5%
cash discount.

3 Paid rent by cheque $700.

7 Paid Paul $970 by cheque, having deducted 3% cash discount.

10 Received a cheque of $3000 from a friend as a loan

15 Paid wages in cash $300

16 Transferred $1700 from bank to cash

25 Cash Sales $450

27 Cash withdrawn for persona; use $150

28 Paid in full Nixon’s Outstanding balance of $700, less 5% cash discount by cheque.
 SATAR’S THREE COLUMN CASH BOOK
DATE DETAILS FOLIO DISC. CASH $ BANK$ DATE DETAILS FOLIO DISC CASH$ BANK $
ALLOW$ REC’D $
Feb 1 Balance b/f 350 Feb 1 Balance 5000
2 Thompson 400 7600 3 Rent 700
10 Loan 3000 7 Paul 29 940
16 Bank c 1700 15 Wages 300
25 Sales 450 16 Cash c 1700
27 Drawings 150
28 Nixon’s 35 665
28 Balance C/f 400 2500 10600 Balance c/f 64 2050 1595
March Balance b/f 2050 1595 2500 10600
1

b. What is the significance of the opening credit balance of $5,000 in the cash book?

This means that the credit balance goes into the bank account

c. Suggest reason why Satar gave a 5% cash discount to Thaompson on February 2, 2023.

This is the balance trade discount

d. What is the name given for the transaction that occurred on February 16, 2023.

Contra Entry

3. Fifee’s Hairdressing Salon specializes in providing hairdressing services and selling beauty supplies.
Fifee made the following transactions during the month of February 2023.

 On February 1, sold $900 worth of goods for cash.

 On February 2, brought $1500 worth of goods from Mac & Co. on credit
 On February 3, returned $300 worth of goods to Mac. & Co.
 On February 4, brought $10000 worth of equipment by cheque.

Complete the form below by stating for each transaction:

 Which account to debit and which account to credit

 The type (classification) of account
 The effect of the transaction on the account

Date Name of Account Type of Account Effect of transaction on

Accounts (tick the
appropriate column)
1 FEB INCREASE DECREASE
DEBIT: CASH REAL 
CREDIT: SALES NOMINAL 
2 FEB DEBIT: PURCHASES NOMINAL 
CREDIT: Mac & Co. PERSONAL 
3 FEB DEBIT: Mac & Co. PERSONAL 
CREDIT: R. OUTWARDS NOMINAL 
4 FEB DEBIT: Equipment REAL 
CREDIT: BANK real 
b. Fifee paid off her account with Mac & Co. on February 5 by cheque. Prepare the account of Mac & Co. in the
purchases Ledger to show all transactions up to the payment on February 5.

Trade Payable: Mac & Co. A/C

Date Details Folio Amount $ Date Details Folio Amount
FEB 2 Mac& Co. 1500 FEB 1 sales 900
FEB 4 Equipment 10000 FED 3 R. Outwards 300
FEB 5 Balance b/f 10,300 11,500
11,500 FEB 5 Balance c/d 10,300

4. The following information represents the balances of ledger accounts of VIP Enterprises for year ending 31
December 2022.

$
Premises 105520
Capital 220690
Vehicles 75000
Equipment 72190
5- year bank loan 25600
Inventory 12500
Cash 9300
Bank 6800
Trade Receivables (debtors) 10600
Trade Payables (Creditors) 23000
Drawings 2900
Sales 123620
Purchases 45700
Miscellaneous Expenses 52400

(a) Prepare VIP Enterprises’ Trial Balance for the year ended 31 December 2022.

Transactions Debit $ Credit$

Premises 105 520
Capital 220 690
Vehicles 75 000
Equipment 72 190
5- year bank loan 25600
Inventory 12 500
Cash 9 300
Bank 6 800
Trade Receivables (debtors) 10 600
Trade Payables (Creditors) 23 000
Drawings 2 900
Sales 123620
Purchases 45 700
Miscellaneous Expenses 52 400
392 910 392 910
b. Using the information given in the trade, complete the table below.

ASSETS LIABILITIES INCOME EXPENSES

NON- CURRENT NON- CURRENT
CURRENT ASSETS CURRENT LIABILITY
ASSETS LIABILITY
Vehicles Cash Bank Loan Trade Capital Miscellaneous Expenses
Premises Inventory payables Sale
Equipment Trade Drawing
Receivables
Bank