6 ACCOUNTS

1. ACCOUNTS

2. What is an Account ? An account is a brief and systematic record of transactions which are similar in nature.

4. ‘T’ format • NAME OF ACCOUNT Dr Cr DEBIT CREDIT Left side Right side

7. ‘T’ format • ASSETS, ACCOUNT Dr Cr DEBIT CREDIT

8. ‘T’ format • LIABILITY ACCOUNT Dr Cr DEBIT CREDIT

9. a) John began business with cash in hand $5000 on 1 January 2010. General Journal Date Particulars Debit Credit $ $ 2010 Jan 1 5000 Cash in hand 5000 Capital-John John began business with cash $5000.

10. b) John began business with a bank loan of $8000 on 1 January 2010. General Journal Date Particulars Debit Credit $ $ 2010 Jan 1 8000 Cash in hand 8000 Loan from bank John began business with a bank loan of $8000.

11. John used $2000 to buy a motor vehicle • for business use on 16 March 2010. General Journal Date Particulars Debit Credit $ $ 2010 Mar 16 2000 Motor Vehicle 2000 Cash John bought a motor vehicle worth $2000.

12. John repaid bank loan of $1500 using cash on 27 Oct 2010. General Journal Date Particulars Debit Credit $ $ 2010 Oct 27 1500 Loan from Bank 1500 Cash John repaid the bank loan.

13. John sold goods at $16000 on credit to • ABC Ltd on 26 November 2010. General Journal Date Particulars Debit Credit $ $ 2010 Nov 26 16000 Debtors (ABC Ltd) 16000 Sales Sales worth $6000 to ABC Ltd.

14. f) John received money for goods from ABC Ltd $10,000 on 11 Dec 2010. General Journal Date Particulars Debit Credit $ $ 2010 Dec 11 10,000 Cash 10,000 Debitors