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double entry

VIEWS: 814 PAGES: 11

									Single Entry

Double Entry

Transactions recorded in: Journals and Stock Cards

Information from journals posted to ledger accounts

Preparation of Trial Balance

Preparation of accounting reports  Cash Flow Statement  Profit/Loss Statement  Balance Sheet

 A ledger account is an accounting record for the elements.  Each element (asset, (A) liability (L), owners equity (OE), revenue (R) and

expense (E) item has its own ledger account.  The left hand side of the ledger account is called the debit side.  The right hand side of the ledger account is called the credit side. Name of ledger account
Date Reference $ Date Reference $

Assets
Date Reference $ Date Reference $ Date Reference

Liabilities
$ Date Reference $

Balance

Balance

Expenses
Date Reference $ Date Reference $

Owners Equity/Capital
Date Reference $ Date Reference $

Balance

Drawings (–OE)
Date Reference $ Date Reference $

Revenues
Date Reference $ Date Reference $

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


 This exercise only includes A, L & OE elements.  This exercise excludes journals.  This exercise excludes GST.

Transaction 1. 1/1/09. Owner started business by depositing $10000 into business bank account. Identify the relevant elements for this transaction: _____________________________________________________________________ Transaction 2. 2/1/09. Business borrowed $5000 cash from ANZ Bank. Identify the relevant elements for this transaction: _____________________________________________________________________ Transaction 3. 3/1/09. Business paid $2000 cash for computer. Identify the relevant elements for this transaction: _____________________________________________________________________ Transaction 4. 4/1/09. Business paid $9000 cash for vehicle. Identify the relevant elements for this transaction: _____________________________________________________________________ Transaction 5. 5/1/09. Owner took $800 cash drawings. Identify the relevant elements for this transaction: _____________________________________________________________________ Dr.
Date Reference

Bank (A)
$ Date Reference

Cr.
$

Dr.
Date

Capital/Owners Equity (OE)
Reference $ Date Reference

Cr.
$

Dr.
Date

Computer (A)
Reference $ Date Reference

Cr.
$

Dr.
Date

ANZ Bank (L)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Vehicle (A)
$ Date Reference

Cr.
$

Dr.
Date

Drawings (—OE)
Reference $ Date Reference

Cr.
$

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


 This exercise only includes A, L & OE elements.  This exercise excludes journals and GST.

Amy Services provides its Balance Sheet at 1/3/09:
ASSETS Bank Total assets Amy Services: Balance Sheet at 1/3/09 $ EQUITIES 20000 Loan: Westpac Capital: Amy 20000 Total equities $ 2000 18000 20000

1. Enter the opening balances from the Balance Sheet into the ledger accounts below. 2. Record the following transactions into the ledger accounts: 1/3/09. Paid $500 off the Westpac Loan. Identify the relevant elements for this transaction: _____________________________________________________________________ 3/3/09. The owner, Amy, contributed $7000 cash to the business. Identify the relevant elements for this transaction: _____________________________________________________________________ 4/3/09. Paid $3000 cash for a computer. Identify the relevant elements for this transaction: _____________________________________________________________________ 5/3/09. Cash drawings $900. Identify the relevant elements for this transaction: _____________________________________________________________________ Dr.
Date Reference

Bank (A)
$ Date Reference

Cr.
$

Dr.
Date

Capital/Owners Equity (OE)
Reference $ Date Reference

Cr.
$

Dr. Dr.
Date Reference

Loan: Westpac (L)
Reference $ Date Reference

Cr.
$

Computer (A)
$ Date Reference

Cr.
$

Date

Dr.
Date

Drawings (—OE)
Reference $ Date Reference

Cr.
$

Add up the value of the total debits and credits!

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


 This exercise only includes A, L & OE elements.  This exercise excludes journals and GST.

Kellie Services provides its Balance Sheet at 1/4/09:
ASSETS Vehicle Furniture Computer Total assets Kellie Services: Balance Sheet at 1/4/09 $ EQUITIES 25000 Bank overdraft 10000 Bank of Kew Capital, Kellie 4000 39000 Total equities $ 3000 6000 30000 39000

1. Enter the opening balances from the Balance Sheet into the ledger accounts below. 2. Record the following transactions into the ledger accounts: 1/4/09. Paid $1000 off the Bank of Kew loan. 3/4/09. The owner, Kellie, contributed $2000 cash to the business. 4/4/09. Paid $7000 cash for equipment. 5/4/09. Cash drawings $900. 6/4/09. Borrowed $9000 more from the Bank of Kew. 8/4/09. Paid $8000 for Shelving Unit. 9/4/09. Owner took some furniture home for private use. $700. 10/4/09. Owner contributed personal fax to business. $1500. Dr.
Date Reference

Dr.
Date Reference

Bank (A or L)
$ Date Reference

Cr.
$

Dr.
Date

Bank of Kew (L)
Reference $ Date Reference

Cr.
$

Dr.
Date

Capital, Kellie (OE)
Reference $ Date Reference

Cr.
$

Dr.
Date

Equipment (A)
Reference $ Date Reference

Cr.
$

Vehicle (A)
$ Date Reference

Cr.
$

Dr.
Date

Drawings (—OE)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Furniture (A)
$ Date Reference

Cr.
$

Dr.
Date

Shelving Unit (A)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Computer (A)
$ Date Reference

Cr.
$

Dr.
Date Reference

Fax (A)
$ Date Reference

Cr.
$

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


Dr.
Date

Capital, Lauren (OE)
Reference $ Date Reference

Cr.
$

This exercise only includes A, L & OE elements and excludes journals and GST. Lauren Services provides its Balance Sheet at 1/5/09:
Lauren Services: Balance Sheet at 1/5/09 ASSETS $ $ Bank 26000 Office assets 20000 Equipment 10000 Total assets 56000 EQUITIES Capital, Lauren 56000 Total equities 56000 Dr.
Date

Drawings, Lauren (-OE)
Reference $ Date Reference

Cr.
$

Dr.
Date

Bank of Melbourne (L)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Vehicle (A)
$ Date Reference

Cr.
$

Enter the opening balances into the ledger accounts provided. Record the following transactions into the ledgers.
 1/5/09. Cash drawings, $1000.  3/5/09. Borrowed $9000 from Bank      

Dr.
Date Reference

Trailer (A)
$ Date Reference

Cr.
$

of Melbourne. 5/5/09. Owner took some office assets home for private use. $4000. 10/5/09. Paid $ 15000 for vehicle. 15/5/09. Owner contributed a trailer to business. $2000. 20/5/09. Paid $800 off BOM loan. 26/5/09. Cash drawings, $1500. 30/5/09. Paid $3200 for Website.
Bank (A)
Reference $ Date Reference

Dr.
Date Reference

Website (A)
$ Date Reference

Cr.
$

Work out the balance of each ledger account at the end of May. Foot. Record the footed balance in the following Trial Balance. Lauren Services: Trial Balance at 1/5/09 Ledger Account Debit $ Credit $ Bank Office assets Equipment Capital Drawings Bank of Melbourne Vehicle Trailer Website Totals

Dr.
Date

Cr.
$

Dr.
Date

Office assets (A)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Equipment (A)
$ Date Reference

Cr.
$

What would you do if the Trial Balance did not balance?

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


Dr.
Date Reference

Equipment (A)
$ Date Reference

Cr.
$

This exercise includes A, L, OE, R & E elements and excludes journals and GST. Michelle Services provides its Balance Sheet at 1/6/09:
Michelle Services: Balance Sheet at 1/6/09 ASSETS $ $ Office assets 80000 Equipment 20000 Total assets 100000 EQUITIES Bank overdraft 8000 Capital, Michelle 92000 Total equities 100000

Dr.
Date

Capital, Michelle (OE)
Reference $ Date Reference

Cr.
$

Dr.
Date

Drawings, Michelle (-OE)
Reference $ Date Reference

Cr.
$

Dr.
Date

Bank of Sth. Yarra (L)
Reference $ Date Reference

Cr.
$

Enter the opening balances into the ledger accounts provided. Record the following transactions into the ledgers.
 1/6/09. Cash drawings, $600.  3/6/09. Borrowed $3000 from Bank       

Dr.
Date

Service Revenue (R)
Reference $ Date Reference

Cr.
$

of Sth. Yarra. 5/6/09. Provided services to customers for cash. $5000. 10/6/09. Paid wages expense $500. 15/6/09. Provided services to customers for cash. $3000. 20/6/09. Paid $600 for office expenses. 26/6/09. Cash drawings, $2000. 28/6/09. Provided services to customers for cash. $1000. 30/6/09. Paid $900 for insurance expense.
Bank (A)
Reference $ Date Reference

Dr.
Date Reference

Wages (E)
$ Date Reference

Cr.
$

Dr.
Date

Office expenses (E)
Reference $ Date Reference

Cr.
$

Dr.
Date

Insurance expenses (E)
Reference $ Date Reference

Cr.
$

Dr.
Date

Cr.
$

Dr.
Date

Office assets (A)
Reference $ Date Reference

Cr.
$

Michelle Services: Trial Balance at 30/6/09 Ledger Account Debit $ Credit $ Bank Office assets Equipment Capital Drawings Bank of Sth. Yarra Service revenue Wages Office expenses Insurance Totals

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


Dr.
Date Reference

Vehicle (A)
$ Date Reference

Cr.
$

This exercise includes A, L, OE, R & E elements and excludes journals and GST. Toni Services provides its Balance Sheet at 1/7/09:
Toni Services: Balance Sheet at 1/7/09 OWNERS EQUITY $ $ Capital, Toni 60000
Represented by:

Dr.
Date

Office assets (A)
Reference $ Date Reference

Cr.
$

Dr.
Date

ABC Finance (L)
Reference $ Date Reference

Cr.
$

ASSETS Bank Vehicle Office assets Total assets LESS LIABILITIES Loan: ABC Finance NET ASSETS

14000 30000 20000 64000 4000 60000

Dr.
Date

Drawings (-OE)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Takings (R)
$ Date Reference

Cr.
$

Enter the opening balances into the ledger accounts provided. Record the following transactions into the ledgers.  1/7/09. Cash drawings, $1200.  3/7/09. Borrowed an additional $5000 from ABC Finance.  5/7/09. Cash takings. $6000.  10/7/09. Paid rent expense $2500.  15/7/09. Cash takings. $2000.  18/7/09. Paid $990 to ABC Finance which included $90 interest expense.  20/7/09. Paid $1100 for office expenses.  22/7/09. Owner contributed office assets worth $2000 to business.  26/7/09. Cash drawings, $800.  28/7/09. Cash takings. $3000.  31/7/09. Paid $450 for cleaning expense. Dr.
Date Reference

Dr.
Date Reference

Rent (E)
$ Date Reference

Cr.
$

Dr.
Date Reference

Interest (E)
$ Date Reference

Cr.
$

Dr.
Date

Office expenses (E)
Reference $ Date Reference

Cr.
$

Dr.
Date

Cleaning expenses (E)
Reference $ Date Reference

Cr.
$

Bank (A)
$ Date Reference

Cr.
$

Dr.
Date

Capital, Toni (OE)
Reference $ Date Reference

Cr.
$

Toni Services: Trial Balance at 31/7/09 Ledger Account Debit $ Credit $ Bank Capital, Toni Vehicle Office assets ABC Finance Drawings Takings Rent Interest expense Office expenses Cleaning Totals

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


Dr.
Date Reference

Takings (R)
$ Date Reference

Cr.
$

Introducing GST clearing account. GST received and paid is recorded in the GST clearing ledger account. For most businesses, GST clearing will normally be a liability and have a credit balance since most businesses receive more GST from their customers than they pay GST to their suppliers. Transactions. 1/1/09. GST owing to ATO is $4000. Enter this opening balance. 2/1/09. Takings revenue $2000 + $200 GST. Total $2200. 4/1/09. Takings revenue $3000 + $300 GST. Total $3300. 10/1/09. Paid rent expense $1000 + $100 GST. Total $1100. 12/1/09. Paid advertising expense $800 + $80 GST. Total $880. 15/1/09. Takings revenue $1000 + $100 GST. Total $1100. 18/1/09. Paid $2750 for computer which includes $250 GST. 21/1/09. Takings revenue $900 + $90 GST. Total $990. 23/1/09. Bought vehicle for $33000 which includes $3000 GST. 25/1/09. Takings revenue $2000 + $200 GST. Total $2200. 29/1/09. Paid $550 for office expenses which includes $50 GST. 31/1/09. Takings revenue $600 + $60
Dr.
Date

Dr.
Date Reference

Rent (E)
$ Date Reference

Cr.
$

Dr.
Date Reference

Advertising (E)
$ Date Reference

Cr.
$

Dr.
Date Reference

Computer (A)
$ Date Reference

Cr.
$

Dr.
Date Reference

Vehicle (A)
$ Date Reference

Cr.
$

Dr.
Date

Office expenses (A)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Bank (A)
$ Date Reference

Cr.
$

GST clearing (L)
Reference $ Date Reference

Cr.
$

Trial Balance extract at 31/1/09 Ledger Account Debit $ Credit $ GST clearing

Assets
Balance   

Liabilities
Balance 

Owners Equity/Capital
Balance   

Revenue
 

Expenses
 

Drawings


Dr.
Date Reference

Bank (A)
$ Date Reference

Cr.
$

This exercise includes A, L, OE, R & E elements, inc. GST. Excludes journals. Perry Services provides its Balance Sheet at 1/8/09: Perry Services: Balance Sheet at 1/8/09 OWNERS EQUITY $ $ Capital, Perry 74000
Represented by:

ASSETS Bank Vehicle Office assets Total assets LESS LIABILITIES CitiBank GST clearing NET ASSETS

29000 46000 21000 96000 17000 5000 Dr. 22000 74000
Date Reference

Vehicle (A)
$ Date Reference

Cr.
$

Enter the opening balances into the ledger accounts provided. Record the following transactions into the ledgers.  1/8/09. Cash drawings, $700.  3/8/09. Paid office expenses $440 including $40 GST.  5/8/09. Cash takings $2200 inc. $200 GST.  10/8/09. Paid rent expense $1650 including $150 GST.  15/8/09. Cash takings $1000 + $100 GST.  18/8/09. Paid $880 to CitiBank which included $80 interest expense.  20/8/09. Paid $1100 for office expenses which includes $100 GST.  22/8/09. Owner contributed office assets worth $3000 to business.  26/8/09. Cash drawings, $800.  28/8/09. Cash takings $3300 inc. $300 GST.  31/8/09. Paid $451 for cleaning expenses including $41 GST. Dr.
Date

Dr.
Date

Office assets (A)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Citibank (L)
$ Date Reference

Cr.
$

Dr.
Date

Drawings (-OE)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Takings (R)
$ Date Reference

Cr.
$

GST clearing (L)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Interest (E)
$ Date Reference

Cr.
$

Dr. Dr.
Date Reference

Office expenses (E)
Reference $ Date Reference

Cr.
$

Capital (OE)
$ Date Reference

Cr.
$

Date

Dr.
Date

Cleaning expenses (E)
Reference $ Date Reference

Cr.
$

Dr.
Date Reference

Rent (E)
$ Date Reference

Cr.
$

Name: Trial Balance at 31/8/09 Ledger Account Debit $ Credit $

Preparing the Cash Flow Statement is a little messy without journals, however, give it a go! Name: Cash Flow Statement for August 2009 $ $ Cash Receipts

Cash Payments

Name: Profit/Loss Statement for August 2009 $ $ Revenue

Change in cash Add cash at start Equals cash at end

Name: Balance Sheet at 31/8/09 ASSETS $ EQUITIES $ $


								
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