Look again at Tom's delivery vehicles account on page 21.

Referring to Tom's transaction of 3 May draft ledger accounts and complete the entries for each of the following separate possibilities:

(a) Tom sold the vehicle for £4,000 cash.

(b) Tom sold the vehicle to Parkhill Motors on credit.

(c) Parkhill Motors paid £1,000 by cheque and agreed to pay the outstanding

£3,000 at a later date.

Note that whichever of the above circumstances applies there is a debit entry for each credit entry. Also the description of each account is the name of the other account affected by the transaction.
Understanding double-entry book-keeping is important. If you follow what we have done in this chapter so far, fine. If not, you should look through it again before attempting the following exercise. Practising it is the best way to master double-entry book-keeping.

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