Chapter 1 - Double entry for cash transactions


 WORKED EXAMPLE

 The following transactions took place in the business of Jack Sparrow during the month of January 2019.




Account to debit

Account to credit

Jan

1

Started business with cash $ 13 500




3

Purchased goods by cash $ 4 400




5

Sold goods for cash $ 5 300




7

Purchased equipment by cash $ 800




10

Paid wages by cash $ 1 500




13

Purchased goods by cash $ 3 500




18

Paid insurance by cash $ 600




25

Sold goods for cash $ 3 700




29

Received commission by cash $ 700




31

Withdrew cash for own use $ 600



 

 

DR                                                                                  In the ledger of Jack Sparrow                                                                      CR

Date

Details

Amount

Date

Details

Amount

CASH ACCOUNT





























































CAPITAL ACCOUNT

























PURCAHSES ACCOUNT































REVENUE(SALES) ACCOUNT































EQUIPMENT ACCOUNT

























WAGES ACCOUNT

























INSURANCE ACCOUNT

























COMMISSION RECEIVABLE ACCOUNT































DRAWINGS ACCOUNT



























Trial Balance as at 31st January 2019

Title of Account

DR

CR

Cash



Capital



Purchases



Revenue(Sales)



Equipment



Wages



Insurance



Commission Received



Drawings








 Q1. The following transactions took place during the month of January 2012. 

Jan


1

3

7

10

15

18

20

24

27

31

Started business with cash $ 11 000.

Purchased goods for cash $ 2 300

Sold goods for cash $ 3 500

Purchased motor van by cash $ 2 400.

Paid wages by cash $ 2 50

Paid electricity by cash $ 400

Received commission by cash $ 200

Withdrew cash for personal use $ 300

Purchased goods by cash $ 2 800

Sold goods for cash $ 3 500