Questions and Answers of Mastering Accounting Skills

During the month of May 20-8 Cyril Sanderson’s purchases on credit were as follows:1 May Purchases from M Booth £296, less 20 per cent trade discount 4 May Purchases from J Price £492, less 25
You are employed by Anderson and Littlewood, 22 Grange Street HULL, HN5 7BZ, suppliers of office equipment and materials. On 29 February your firm had supplied the following goods to T Woodward of 44
Adel Enterprises is a small business buying and selling goods on credit. During the month of May 20-9 the following transactions took place:3 May Bought goods from A Lucas £258, D Nicholas £326, V
SuLing Textiles imports and sells oriental items. During the month of October 20-9 the following transactions took place:2 Oct Bought goods from Hongtay Supplies £508, T Ambala £364, Jade Gane
D Withers is a wholesaler. The credit transactions listed below took place during the month of May 20-2. Enter each transaction in the appropriate book of original entry, total for the month and post
During the month of September 20-5 Oliver Stanley’s credit transactions were as follows:2 Sep Sales to E Cowan £182 4 Sep Sales to R Douglas £357 5 Sep Purchases from H Pearce £440 less 20 per
The following sales and purchases were made by Smithers during the month of May 20-6:5 May Sold on credit to Ace Furnishings, 3 desks list price £150 each, less trade discount of 33^ per cent 10 May
‘Handyman’ is a local ‘Do it Yourself’ store which divides its purchases of stock into two main departments: General Household and Garden Accessories. Purchases on credit during the month of
John Dickenson is the proprietor of a retail business which he has divided into two departments: Furniture and Electrical goods. His purchases on credit during the month of May 20-9 were:5 May
The Great Outdoors Centre manufacturers a wide range of camping and leisure products at competitive prices. The business is divided into two main departments: Garden Furniture and Camping Equipment.
M & P Harris have divided their retail business into two departments: China and Cutlery. All items of stock are bought on credit. Their purchases and purchase returns for October were:6 Oct Coghlin
Leisuretime Products are Yorkshire’s leading outdoor pursuits specialists. The business is divided into two main departments: Sports Goods and Camping Equipment.Sales on credit during the month of
City Catering Company supplies the catering trade with a variety of products.Credit sales during May were as follows;4 May Bridge House Motel 20 sets of wine glasses at £7.50 per set 4 electric food
What is the purpose of the trading and profit and loss account?
From the following trial balance of Sandra Ramsden, who has been trading for one year, you are required to draw up a trading and profit and loss account and balance sheet for the year ended 31
From the following trial balance of Pauline Ellis you are required to prepare a trading and profit and loss account for the year ended 31 May 20-7 and a balance sheet as at that date.Trial Balance as
From the following trial balance of Frederick Allen, you are required to draw up a trading and profit and loss account for the year ending 31 October 20-7 and a balance sheet as at that date.Trial
On 31 March 20-8 the following trial balance was taken from the books of James Conway:Trial Balance as at 31 March 20-8 Dr Cr££Capital on 1 April 20-7 38,200 Cash at bank 13,326 Cash in hand 234
David Nicholson is the owner of a textile business. He has completed his trading and profit and loss account for the year ended 31 December 20-2. The following balances remain in his ledger:£Net
Anne Parfitt owns a retail carpet business. After her trading and profit and loss account for the year ended 31 May 20-5 was completed, the following balances remain in her ledger:£Net profit 29,720
Ann Bannister extracted the following trial balance from her books on 31 December 20-7:Trial Balance as at 31 December 20-7 Dr Cr££Capital on 1 January 20-7 30,200 Debtors 14,950 Creditors 10,735
David Allen is the owner of an electrical business. On 30 September 20-7 the following trial balance was taken from his books:Trial Balance as at 30 September 20-7 Dr Cr££Sales 69,480 Purchases
John Roberts is a retail trader. On 30 April 20-5 the following trial balance was taken from his books:Trial Balance as at 30 April 20-5 Dr Cr££Capital on 1 May 20-4 24,640 Furniture and equipment
On 31 December 20-6 the following trial balance was taken from the books of James Giles:Trial Bedance as at 31 December 20-6 Dr Cr££Capital on 1 January 20-6 25,090 Equipment 6,000 Furniture and
Nicholas Davidson owns a small business. On 30 September 20-7 the following trial balance was taken from his books:Trial Balance as at 30 September 20-7 Dr Cr££Salaries 8,250 Rent and rates 1,500
Brian Stone, a sole trader, extracted the following trial balance from his books at the close of business on 31 October 20-7;Trial Balance as at 31 October 20-7 Dr Cr££Freehold land and buildings
What is depreciation? LO8
A business which prepares its accounts annually to 31 December purchased a new motor van on 1 July 20-4 costing £15,000.It is anticipated that the van will be kept for four years and depreciation is
John Preston purchased a delivery van on 1 January 20-7 costing £8,000. He anticipated he would keep it for three years, it would then be sold for an estimated figure of £2,744. He decided to
Michael Johnson purchased a new fork-lift machine costing £10,500. He expects to keep it for four years and at the end of that time its residual value is estimated to he £2,520.You are required to
Ross Brothers purchased a new machine in July 20-7 costing £3,000. It is estimated it will have a useful life of five years, and a disposal value at the end of this time of £712. Accounts are
K Gillow prepares his accounts annually to 30 June. He depreciates all his machinery at a rate of 30 per cent per annum on the reducing balance method. Details of the machines and the dates of
James Clayton purchased a motor van on 1 June 20-5 costing £10,800, paying by cheque. It was estimated he would keep it for three years, providing depreciation at a rate of 33j per cent per annum by
William Evans is a sole trader. His financial year ends on 31 December each year. On 4 January 20-5 he purchased machinery costing £15,500, paying by cheque. Evans plans to use the machinery for
The financial year end of Hodgson (Builders Merchants) Ltd is 31 December. The company’s policy is to depreciate its motor vans at 20 per cent per annum, using the straight line method, and to
On 1 March 20-7 D Nelson owes your firm £76.50. He is declared bankrupt and it is reluctantly decided to write off the debt as a bad debt on 30 March 20-7. You are required to prepare: D Nelson’s
Every business which sells goods on credit wishes to avoid bad debts. You are required to:(i) Describe the steps you would take before a new customer is allowed credit.(ii) Say how you would deal
(a) What are bad debts? Why is it necessary to write off bad debts?(b) From the information below write up the bad debts account in the books of Jean Wilder for the year 20-7. Debts written off as
Paul Simpson is a sole trader. During the year ended 31 March 20-8 the following customers were declared bankrupt:Date Customer Amount of Rate received in debt final settlement 20-7£31July J Brown
Nigel Barker runs a small business. He decided to make a provision for bad debts equal to 5 per cent of the total debtors outstanding at the end of each financial year:Total debtors£31 December 20-5
H Crawrford had a business which adjusted its provision for bad debts at the end of the financial year, at a given percentage of the total debtors. The percentage varied each year, depending on the
On 20 September 20-7 Brian Fox’s debtors totalled £12,000. He decided to write off the following as bad debts;£G Green 60 H Wilson 80 He further decided to make a provision for doubtful debts of
(a) What are the differences between bad debts written off and provision for bad debts?(b) Give two reasons for creating a provision for bad debts.(c) What is meant by bad debts recovered? How are
The following information refers to the electricity account in the ledger of John Woodstock. On 1 January 20-7 there was an unpaid bill for electricity of £246. During the year the following
From the following information you are required to write up the rates account in the ledger of E Mellon On 1 July 20-2 the rates prepaid were £725. During the year the following amounts were paid
The following information refers to the stationery account in the ledger of M Whiteley. On 1 May 20-5 there was a stock of stationery valued at £158, during the year the following amounts were paid
James Grant runs a small mail order business. On 1 January 20-7 there was £500 owing for rent in respect of the business premises. During the year the following payments were made for rent, by
The following information refers to the rates account in the ledger of K. Parker. On 1 January 20-7 the rates prepaid were £525. During the year the following payments were made for rates, by
The following information is available in respect of the electricity account in the ledger of M. Summers. On 1 July 20-6 there was an unpaid bill for electricity of £287. During the year the
The following information refers to the packing materials account in the ledger of David Dyson: LO2£On 1 June 20-4 there was a stock of packing materials valued at: 350 Packing materials purchased
During the year ended 31 December 20-4 Nigel Giffard paid the following amounts for rent: LO2 18 January £686 for the half year ended 31 March 20-4 10 July £890 for the half year ended 30 September
James Conway commenced trading on 1 January 20-7, on which date he acquired premises at an annual rental of £2,700. On 1 May 20-7 he sub-let a section of the premises at an annual rental of
(i) L George rents his premises at an annual rental of£1,200. On 1 June 20- 3 George had paid his rent up to the end of July, and during the year ended 31 May 20-4 he made the following payments for
(i) Kite Sportswear rent their premises at an annual rental of £5,712. On 1 May 20-6 they had paid rent up to the end ofJune 20-6. During the year ended 30 April 20-7 the following payments were
On 31 December 20-7 the following trial balance was extracted from the books of Michael Silverwood:Dr Cr ££Debtors 6,480 Creditors 2,360 Stock (1 January 20-7)4,340 Motor vehicle 11,500 Equipment
The following trial balance was taken from the books of Robert Witham at 31 December 20-6:££Capital (1 January 20-6)11,700 Drawings 2,100 Rent and rates 1,340 Wages and salaries 2,711 Purchases
fJulie Bright is a business consultant. On 30 June 20-3 the following trial balance was extracted from her books:££Freehold premises 27,000 Office equipment 3,500 Cash in hand 390 Fixtures and
On 31 May 20-6 the following trial balance was extracted from the books of R. Colebrook:Dr Cr££Capital 29,250 Drawings 4,600 Bank and cash 9,200 Salaries and wages 23,000 Purchases and sales 35,000
On 30 April 20-5 the following trial balance was extracted from the books of Robert Owen:££Capital 1 May 20-4 30,640 Furniture and equipment 10,500 Sales 46,800 Postage and stationery 1,750 Returns
W Sims is self-employed as a painter and decorator. On 31 May 20-7 the following trial balance was extracted from his books;££Income from decorating Commissions received 29,000 from builders 950
David Courtman is a business consultant. On 31 May 20-8 the following balances remain in his ledger;££Freehold premises 65,950 Office equipment 14,600 Petty cash 324 Rates 7,216 Loan - City Bank
E Sweet is a confectionery wholesaler. On 31 March 20-2 the following trial balance was extracted from his books:Dr Cr££Capital at 1 April 20-1 20,000 Fixtures and fittings 5,000 Debtors and
Elaine Mellor is a toy wholesaler. At the close of husiness on 31 March 20-9 she extracted the following trial balance from her books:Dr Cr££Purchases and sales 17,620 38,330 Stock 1 April 20-8
B Stanley is a sole trader. The following trial balance was extracted from his books on 31 December 20-5:Capital (at 1 January 20-5)31,660 Drawings 4,500 Freehold land and buildings 28,000 Motor van
What are assets? LO6
What are liabilities? LO6
What is capital? LO6
In your notebook make two headings like this: LO6 Assets Liabilities now place each of the following items under the correct heading:• Motor van• Creditors• Cash at bank• Office equipment•
Now place each of the following items under the correct heading: LO6 Assets Liabilities• Premises• Debtors• Creditors• Motor vehicle• Office furniture • Capital • Cash in hand
A firm has the following assets and liabilities: LO6 rCapital X22,250 Debtors 5,825 Cash at bank 1,500 Creditors 2,450 Office equipment 8,425 Stock of goods 9,250 What is the total of the assets?
A firm has the following assets and liabilities: LO6 cCapital X17,500 Office furniture 1,750 Motor van 6,450 Creditors 3,000 Stock of goods 3,230 Machinery 4,900 Cash at bank 420 Debtors 3,750 What
A firm has the following assets and liabilities: LO6 Fixtures and fittings£10,200 Office equipment 2,275 Capital 15,000 Stock of goods 1,750 Creditors 1,800 Debtors 2,825 Cash at bank What is the
Complete the table by calculating and filling in the missing figure; LO6 Assets Liabilities Capital(a) 42,000 17,300?(b) 87,500?61,000(c) ?19,950 39,800(d) 71,450 22,750?(e) 64,500?39,500
Complete the table by calculating and filling in the missing figure: LO6 Assets Liabilities Capital(a) 51,500 19,700?(b) ?27,500 64,700(c) 57,750?38,800(d) 63,330 14,500?(e) ?17,850 63,150
Complete the table by calculating and filling in the missing figure: LO6 Assets Liabilities Capital(a) 65,000?32,250(b) ?16,750 27,900(c) 78,350 18,900?(d) ?12,750 18,350(e) 45,000?20,200
Complete the table by calculating and filling in the missing figure: LO6 Assets Liabilities Capital(a) 47,200 18,250?(b) 51,500?16,450(c) ?27,800 28,900(d) 31,150 17,250?(e) 48,750?26,650
On 21 January, David Nicholson decides to buy some office equipment costing £1,500, paying by cheque. Draw up his balance sheet to show the effect of this transaction. LO6
On 31 January, David Nicholson bought further goods on credit, costing £1,800 and managed to persuade a business associate, A Goodson, to lend him £5,000; this was placed in the business bank
William Dyson sets up a new business - he has the following assets and liabilities: premises £7,000, stock of goods £3,250, motor vehicle £5,750, creditors £2,200, debtors £3,950, loan from D
From the following information calculate the amount of Andrew Foster’s capital and draw up his balance sheet as at 31 March 20-8: debtors £4,950, motor vehicles £5,700, creditors £3,490,
Peter Smart has the following balance sheet as at 31 May 20-8: LO6 Balance Sheet as at 31 May 20-8 Assets£Liabilities£Motor vehicle 2,000 Capital 6,600 Premises 5,000 Creditors 400 Stock of goods
Julie Chang has the following balance sheet as at 30 September 20-8: LO6 Balance Sheet as at 30 September 20-8 Assets £Liabilities £Fixtures and fittings 2,000 Capital 10,600 Stock of goods 1,500
Tim Sanderson has the following balance sheet as at 30 November 20-8: LO6 Balance Sheet as at 30 November 20-8 Assets£Liabilities£Motor vehicle 8,000 Capital 13,750 Stock of goods 700 Creditors
Look at the following typical business transactions and work out which accounts are involved in each transaction. In every case, think what has happened and decide which account has received value
Complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited for each transaction;(a) Bought goods on credit - from E Russell _ (b) Bought
Complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited for each transaction:(a) Sold goods and received cash(b) A customer, G
Dean Sayer started a new business on 1 May. In your ledger write up the double entry accounts needed to record the following transactions:May 1 Started a new business with £7,000 in cash 2 Opened a
M Daswani started a new business on 1 June. In your ledger write up the double entry accounts needed to record the following transactions:June 1 Started a new business by placing £10,000 in a
Jill O'Connor started a new business on 1 August. In your ledger write up the double entry accounts needed to record the following transactions:Aug 1 Started a new business with £5,000 in cash 3
For each of the following transactions complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited:(a) Paid motor expenses in cash Debit
For each of the following transactions complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited:(a) Bought goods, paying in cash
For each of the following transactions complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited:(a) Paid electricity bill by cheque
For each of the following transactions complete the blank spaces by inserting the name of the account to be debited and the name of the account to be credited:(a) Goods are returned to R Bright
A Oldridge started a new business on 1 May20-7. In your ledger write up the double entry accounts needed to record the following transactions:May 1 Started business with £5,000 in a business bank
KWilson started a new business on 1 June 20-7. In your ledger write up the double entry accounts needed to record the following transactions:Jun 1 Started business with £10,000 in cash 2 Bought
D Shelley started a new business on 1 August 20-7. In your ledger write up the doulsle entry accounts needed to record the following transactions:Aug 1 Started business with £5,000 in a business
T Garside started a new business on 1 October 20-8. In your ledger write up the double entry accounts needed to record the following transactions:Oct 1 Started business with £7,000 in the business
F Patel started a new business on 1 November 20-8. In your ledger write up the double entry accounts needed to record the following transactions:Nov 1 Started business with £4,000 in a business bank
Brian Stones runs a small retail business. In your ledger write up the double entry accounts needed to record the following transactions for the month of March 20-8. At the end of the month balance
Ron Stewart is a wholesaler; on 1 January 20-8 he had the following balances in his ledger:Dr Cr££Capital 6,800 A Frazer 880 Motor vehicle 3,800 A Hodges 1,100 J Jennings 740 Bank 2,040 7,680 7,680

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