Bookkeeping transactions -...

aat

AQ2016

Bookkeeping transactions

ADDITIONAL QUESTION BANK ANSWERS

AAT BTRN : BOOKKEEPING TRANSACTIONS

136 KAPLAN PUBLISHING

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© Kaplan Financial Limited, 2016

SUPPORT ANSWERS



CHAPTER 1

BUSINESS DOCUMENTS

1 LITTLE MISS MUFFINS CAKE SHOP

The product code on the invoice does not match the purchase order.

The VAT amount is incorrect, which gives an incorrect total.

There is no VAT registration number.

There is no customer address.

No purchase order or delivery reference

The purchase order shows no sign of authorisation

ANSWERS

KAPLAN PUBLISHING 139

2 BALOTELLI

Ferguson Training

Unit 1 Old Trafford Road

Champion Park

Manchester

M11 3HU

VAT reg no: 618 2201 63

To: Balotelli Supplies

11 Main Road

Manchester

M1 2PW

Purchase order no. 40

Invoice Number 123

1,000 footballs product code MC2012

VAT

Gross

10 July 2012

£1,000.00

£200.00

–––––––

£1,200.00

Terms: 30 days net

Workings:

VAT = £1,000 × 20%

= £200



3 MULTI CHOICE

C

D

All these codes might be used in a computerised accounting system.

D

ANSWERS


4 DOCUMENTS

(a) Order confirmation

(b) Price quotation

(c) Returns inwards note



5 MEANING OF TERMS

(a) Errors and omissions excepted. The seller is trying to escape liability for any errors that might accidentally be on the invoice.

(b) The quoted price does not include delivery to the customer’s premises. The customer must either collect the goods from the seller’s premises, or must arrange and pay for delivery from the seller to the customer.

(c) Cash on delivery. The customer must pay for the goods immediately that they are delivered. No credit is available after this point.

ANSWERS


6 PHIL INN

A general ledger code is used to identify the account in which the purchases of goods are recorded

A supplier code is used to identify the organisation in which the goods were purchased from

A product code is used to identify the types of products purchased



7 DOCUMENT FILES

Bank statements – Date order

Insurance documents – By class of asset

Sales Invoices – By customer and then by invoice number

ANSWERS


8 PURCHASE INVOICES

The grid stamp will contain entries for:

Purchase order number – the number of the original purchase order for the goods now being invoiced.

Delivery note number – the number on the delivery note sent with the goods.

Invoice number – a sequential number given to all purchase invoices received, for control purposes.

Cheque number – when known, the number of the cheque paying this invoice will be filled in.

Account code – the purchases ledger code for this payable.

Checked by – the employee checking the invoice and filling in the grid entries.

Date – the date the employee is filling in the grid entries.



9 PURCHASE TRANSACTION

(a) The purchaser sends a purchase order to the supplier, to confirm the goods required.

(b) The supplier sends a delivery note to the purchaser, the delivery note accompanying the goods on their way to the purchaser.

(c) The supplier sends a credit note to the purchaser, confirming that some or all of the invoiced amount can be cancelled.

ANSWERS


10 DELIVERY NOTE

The three copies of a delivery note are used as follows:

One kept by the supplier as a record of the goods delivered.

One kept by the purchaser as a record of the goods that have been delivered to them.

One signed by the purchaser on receipt of the goods and then returned to the supplier to confirm that the purchaser is happy with the goods he has received.



CHAPTER 2

BOOKS OF PRIME ENTRY

11 MEANINGS

(a) A book of prime entry is an accounting record where documents are individually recorded prior to their entry in the ledger accounts. An example in the sales system is the sales day book.

(b) The sales day book is a book of prime entry in the sales system. Each sales invoice sent out to customers is individually recorded in the sales day book. At the end of regular periods (e.g. monthly), the totals from the sales day book are posted to the general ledger accounts.

(c) The sales returns day book is another book of prime entry that can be used in the sales system. Each credit note sent out to customers is individually recorded in the sales returns day book. At the end of regular periods (e.g. monthly), the totals from the sales returns day book are posted to the general ledger accounts.

ANSWERS


12 ANALYSED SALES DAY BOOK

The advantage of maintaining an analysed sales day book is that it provides more specific information into the sales that have been generated. It could be analysed into different product types or perhaps sales within different geographical areas.



13 SALES DAY BOOK

The typical columns in a non-analysed sales day book are:

Date, Invoice Number, Customer Name, Customer ledger code, Total (Gross sales), VAT, Net (Net sales)

ANSWERS


14 PURCHASES DAY BOOK

A typical (non-analysed) purchases day book will have the following columns:

Date Invoice no Purchases ledger code

Supplier Total £

VAT £

Net £



15 TWO COLUMN CASH BOOK

A typical two column cash receipts book has the following column headings:

Date Narrative Bank £

Cash

£

VAT £

Receivables £

Other £

Cash sales£

ANSWERS


CHAPTER 3

DOUBLE ENTRY BOOKKEEPING – INTRODUCTION

16 ACCOUNTING EQUATION

The accounting equation states that:

Assets minus Liabilities = Capital

Assets are items owned and used by a business.

Liabilities are amounts owed by a business.

Capital is the amount that the owner has invested in the business. The business owes this amount back to the owner.



17 CAPITAL AND REVENUE EXPENDITURE

The expenditures qualify as follows:

Capital expenditure Revenue expenditure

Purchase of new car Annual machine rental

Cost of new factory Purchase of goods for resale

Finance director’s salary

ANSWERS


18 ACCOUNTING ENTRY

C

An increase in capital and an increase in liability both require credit entries in the appropriate accounts.

Debits and credits must match each other.



19 KAPIL DEV

Assets Liabilities

Loan from A Lamb Wrong Receivables Wrong

Motor Vehicles Money owing to bank

Premises Inventories Wrong

Goodwill Loan from Riffle

Machinery Money owing to A Little

Cash in hand Fixtures Wrong

Capital Wrong Payables

Cash at bank Buildings Wrong

ANSWERS


20 MISSING FIGURES

Assets Liabilities Capital

£ £ £

(i) 50,000 7,200 42,800

(ii) 112,000 19,600 92,400

(iii) 67,200 17,200 50,000

(iv) 96,400 30,600 65,800

(v) 102,000 25,200 76,800

(vi) 209,600 50,600 159,000



21 CLASSIFICATION

(i) Asset (vii) Asset

(ii) Liability (viii) Liability

(iii) Asset (ix) Liability

(iv) Asset (x) Asset

(v) Liability (xi) Liability

(vi) Asset (xii) Asset

ANSWERS


CHAPTER 4

LEDGER ACCOUNTING

22 CHANGES

(i) Debit

(ii) Credit

(iii) Debit

(iv) Credit

(v) Credit

(vi) Debit

(vii) Debit

(viii) Debit

(ix) Credit

(x) Credit



23 ABIGAIL

Bank

£ Capital (1) 5,000 Sales (4) 600

£ Machine (2) 1,500 Drawings (5) 200 Electricity (6) 30 Payables (8) 500

Capital

£

£ Bank (1) 5,000

Machine

£ Bank (2) 1,500

£

Purchases

£ Payables (3) 500

£

Payables

£ Bank (8) 500

£ Purchases (3) 500

Sales

£

£ Bank (4) 600 Receivables (7) 800

Drawings

£ Bank (5) 200

£

Electricity

£ Bank (6) 30

£

Receivables

£ Sales (7) 800

£

ANSWERS


24 BASHIR

Bank

£ Capital (1) 2,000Sales (7) 400Receivables (8) 250 ––––– 2,650 –––––Bal b/d 1,370

£ Van (2) 400 Purchases (3) 700 Rent (5) 80 Drawings (6) 100 Bal c/d 1,370 ––––– 2,650 –––––

Capital

£ Bal c/d 2,000 ––––– 2,000 –––––

£ Bank (1) 2,000 ––––– 2,000 ––––– Bal b/d 2,000

Van

£ Bank (2) 400 ––––– 400 –––––Bal b/d 400

£ Bal c/d 400 ––––– 400 –––––

Purchases

£ Bank (3) 700 ––––– 700 –––––Bal b/d 700

£ Bal c/d 700 ––––– 700 –––––



Sales

£ Bal c/d 900 ––––– 900 –––––

£ Receivables (4) 500 Bank (7) 400 ––––– 900 ––––– Bal b/d 900

Receivables

£ Sales (4) 500 ––––– 500 ––––– Bal b/d 250

£ Bank (8) 250 Bal c/d 250 ––––– 500 –––––

Rent

£ Bank (5) 80 ––––– 80 ––––– Bal b/d 80

£ Bal c/d 80 ––––– 80 –––––

Drawings

£ Bank (6) 100 ––––– 100 –––––Bal b/d 100

£ Bal c/d 100 ––––– 100 –––––

ANSWERS


25 SAMUELS

Trial balance at 31 December 20X2 Dr Cr £ £ Sales 47,140 Purchases 26,500 Receivables 7,640 Payables 4,320 General expenses 9,430 Loan from father 5,000 Plant and machinery 10,500 Motor van 4,600 Drawings 7,500 Rent and rates 6,450 Insurance 1,560 Bank overdraft 2,570 Capital 15,150 ––––––– ––––––– 74,180 74,180 ––––––– –––––––



26 DEFINITION

Trial balance is a list of balances in a double entry bookkeeping system. If the records have been correctly maintained, the sum of the debit balances will equal the sum of the credit balances although certain errors, such as errors of omission of transactions, will not be disclosed by the trial balance.

ANSWERS


CHAPTER 5

ACCOUNTING FOR CREDIT SALES, VAT AND DISCOUNTS

27 AB LTD

(a) £2,000 × 20% = £400

(b) £480 × 20% = £96

(c) £4,800 × 120

20= £800

(d) £1,000 × 20% = £200



28 RECORD

960 × 20/120 = 160 VAT

960 – 160 = 800 net

Receivables

Date Detail £ Date Detail £

Sales and VAT 960

Sales


Receivables 800

VAT


Receivables 160

ANSWERS


29 SALES

You are selling 100 items at £35 each excluding VAT.

A 5% trade discount is applied and a 3% discount is offered for settlement within 5 days.

a) Calculate the net, VAT and gross amounts to appear on an invoice.

b) Calculate the amount payable if paid within 5 days. a) £ 100 × £35 3,500.00

Trade discount – 5% (175.00) 3,325.00

VAT @ 20% 665.00

On face of invoice Net: 3,325.00 VAT: 665.00 Gross: 3,990.00 b) If paid within 5 days a total of 3% is deduced from the gross amount: Gross discount = £3,990 x 3% = £119.70 Payable amount = £3,990 - £119.70 = £3,870.30



30 MORE SALES

(a) Net amount £240.00 VAT (240 × 20%) £48.00 Total £288.00

(b) Amount payable = £288 x 95% = £273.60 This equates to a gross discount of £14.40 Alternate working: £240.00 x 95% = £228.00 VAT @ 20% = £45.60 Gross amount payable = £273.60

Receivables

Sales and VAT £288.00 Bank £273.60 Discount allowed and VAT £14.40

Sales

Receivables £240.00

VAT

Receivables £2.40 Receivables £48.00

Bank

Receivables £273.60

Discounts allowed

Receivables £12.00

ANSWERS


31 MINICORP

INVOICE

Minicorp Ltd 22 The Square Wolverhampton WV2 4DD

Tel: 01902 44556

Invoice no: 1745

Tax point: 28 July 20X3

VAT reg no: 234 1116 92

Description Quantity VAT rate Unit price Amount ex VAT % £ £ Alphas 10 20 200 2,000.00

2,000.00 Trade discount (10%) (200.00) ––––––– 1,800.00 VAT at 20% 360.00 ––––––– Total amount payable 2,160.00 –––––––

Terms: 30 days credit is offered

To: Ahmed Trading 4 The High Street Stevenage Herts



INVOICE


Tel: 01902 44556

Invoice no: 1746


VAT reg no: 234 1116 92

Description Quantity VAT rate Unit price Amount ex VAT % £ £ Betas 6 20 120 720.00

720.00 Trade discount (10%) (72.00) ––––––– 648.00 VAT at 20% 129.60 ––––––– Total amount payable 777.60 –––––––

5% prompt payment discount offered if paid within 21 days

Amount payable if paid within 21 days: £738.72

To: Bertie Ltd 31 The Mall Cheltenham Gloucs

ANSWERS


INVOICE


Tel: 01902 44556

Invoice no: 1747


VAT reg no: 234 1116 92

Description Quantity VAT rate Unit price Amount ex VAT % £ £ Alphas 2 20 200 400.00 Betas 4 20 120 480.00

880.00 Trade discount (20%) (176.00) ––––––– 704.00 VAT at 20% 140.80 ––––––– Total amount payable 844.80 –––––––

5% prompt payment discount offered if paid within 21 days

Amount payable if paid within 21 days: £802.56

To: Charlie Ltd 7 The Esplanade Clacton Essex



32 MINICORP II

CREDIT NOTE


Tel: 01902 44556

Credit note no: CN144


VAT reg no: 234 1116 92

Description Quantity VAT rate Unit price Amount ex VAT % £ £ Gammas 3 20 100 300.00

300.00 Trade discount (10%) (30.00) ––––––– 270.00 VAT at 20% 54.00 ––––––– Total amount 324.00 –––––––

To: Ahmed Trading 4 The High Street Stevenage Herts

ANSWERS


CREDIT NOTE


Tel: 01902 44556

Credit note no: CN145


VAT reg no: 234 1116 92

Description Quantity VAT rate Unit price Amount ex VAT % £ £ Deltas 4 20 160 640.00

640.00 Trade discount (10%) (64.00) ––––––– 576.00 VAT at 20% 115.20 ––––––– Total amount 691.20 –––––––

To: Bertie Ltd 31 The Mall Cheltenham Gloucs



CHAPTER 6

ACCOUNTING FOR CREDIT PURCHASES, VAT AND DISCOUNTS

33 PURCHASER

a) £ List price 1,000.00 Trade discount (5%) (50.00) ––––––– 950.00 VAT (£950 × 20%) 190.00 ––––––– Invoice total 1,140.00 ––––––– b) £1,140.00 c) £1,140 x 97% = £1,105.80

ANSWERS


34 THREE REASONS

Item different from order (wrong item sent)

Item not as described

Item not of satisfactory quality



35 PROMPT PAYMENT DISCOUNTS

Amount payable is calculated as: £ Net of discount amount, before VAT (98% × £2,000) 1,960 VAT at 20% (0.2 × £1,960) 392 ––––– Total payable 2,352 –––––

ANSWERS


36 MR P

Invoice

Full amount £550.00

VAT £110.00

Total £660.00

Payment – taking the discount

£660 less 4%

Discounted amount £528.00

VAT £105.60

Total £633.60

Payables

Bank £633.60 Purchases and VAT £660.00Discounts received and VAT £26.40

Purchases

Payables £550.00

VAT

Payables £110.00 Payables £4.40

Bank

Payables £633.60



Discounts received

Payables £22.00

ANSWERS


CHAPTER 7

CONTROL ACCOUNTS AND SUBSIDIARY LEDGERS

37 MISSING CELLS

Sales day book

Date Invoice No. Customer name Total £

VAT £

Net £

1/4/12 Henderson & Sons Building

660.00 110.00 550.00

1/4/12 Armstrong Carpentry 360.00 60.00 300.00

1/4/12 Mullen’s Roofing 216.00 36.00 180.00

1/4/12 Keady’s Ceilings 1,680.00 280.00 1,400.00

Total 2,916.00 486.00 2,430.00

Postings to the general ledger

Account Amount Dr or Cr

Receivables (SLCA) 2,916.00 Dr

VAT control 486.00 Cr

Sales 2,430.00 Cr

Postings to sales ledger


Henderson & Sons Building 660.00 Dr

Armstrong Carpentry 360.00 Dr

Mullen’s Roofing 216.00 Dr

Keady’s Ceilings 1,680.00 Dr



38 WILLIAMS WHOLESALE

What will be the entries in the sales ledger?

Account name Amount £

Debit

Credit

Brown’s 2,040

Raith & Son 10,500

Drogba 14,376

Bertrand 3,168

What will be the entries in the general ledger?


Debit

Credit

Sales ledger control 30,084

VAT 5,014

Sales 25,070

ANSWERS


39 CREDIT TRANSACTIONS

Sales ledger


Debit

Credit

Friedel 5,280

Naughton 10,680

General ledger


Debit

Credit

Sales ledger control 15,960

VAT 2,660

Sales returns 13,300



40 FELIX & FALL

Sales day book

Date Invoice No. Customer name Total £

VAT £

Net £

15/10/12 245 Space Creators 228.00 38.00 190.00

15/10/12 246 Moon Motors 122.40 20.40 102.00

15/10/12 247 Hot Rod’s 414.00 69.00 345.00

15/10/12 248 King of Cool 744.00 124.00 620.00

15/10/12 Total 1,508.40 251.40 1,257.00



Receivables (SLCA) 1,508.40 Dr

Sales 1,257.00 Cr

VAT 251.40 Cr

Posting to sales ledger


Space Creators 228.00 Dr

Moon Motors 122.40 Dr

Hot Rod’s 414.00 Dr

King of Cool 744.00 Dr

ANSWERS


41 EMMA

What will be the entries in the purchases ledger?


Debit

Credit

Benny’s 2,520

Tots Tumbles 1,320

Susy Snoop 3,894

Freddie Frog 1,680

What will be the entries in the general ledger?


Debit

Credit

Purchases ledger control 9,414

Purchases 7,845

VAT 1,569



42 JACOB

Purchases ledger


Debit

Credit

Delta 360

Romeo 120

General ledger


Debit

Credit

Purchases ledger control 480

Purchases returns 400

VAT 80

ANSWERS


43 GERRARD

Purchases day book

Date Invoice No. Supplier name Total £

VAT £

Net £

31/12/12 Ferguson Florals 120.00 20.00 100.00

31/12/12 Ollie & Co 240.00 40.00 200.00

31/12/12 Suarez 180.00 30.00 150.00

31/12/12 Manchester MOTs 276.00 46.00 230.00

816.00 136.00 680.00



PLCA (Payables) 816.00 Cr

Purchases 680.00 Dr

VAT 136.00 Dr

Posting to purchases ledger


Ferguson Florals 120.00 Cr

Ollie & Co 240.00 Cr

Suarez 180.00 Cr

Manchester MOTs 276.00 Cr



44 SLCA AND SALES LEDGER

The sales ledger control account in the general ledger shows the total due from receivables at any time. The subsidiary (sales) ledger contains a separate ledger account for each individual receivable. The balance on each individual account in the subsidiary (sales) ledger shows the amount due from that individual receivable.

The total of the balances on the subsidiary (sales) ledger accounts should equal the balance on the sales ledger control account in the general ledger.

ANSWERS


45 STATEMENTS

C

The sales day book is not part of the double entry system and debit and credit balances must always be equal (and opposite).



46 SALES DAY BOOK

£ £ Debit Sales ledger control account 12,000 Credit VAT account 2,000 Credit Sales account 10,000

ANSWERS


47 SALES RETURNS

£ £ Debit VAT account 200 Debit Sales returns account 1,000 Credit Sales ledger control account 1,200



48 SALES REVENUE

B

A straightforward question compared with many others! Sales are recorded at their value excluding VAT, as credit items (income).

ANSWERS


49 DESCRIPTION

D

The sales day book provides totals for receivables, sales revenue excluding VAT and VAT on the sales. These totals are transferred to the nominal ledger by debiting total receivables account with the gross amount payable, crediting the sales revenue account with the value of sales excluding VAT and crediting the VAT account with the amount of VAT payable.



50 TOM

C

Tom

£ £

1 January Bal b/d 500 17 January Returns out 100

12 January Sales 2,000 28 January Bank 1,600

23 January Sales 1,000 31 January Bal c/d 1,800

––––– –––––

3,500 3,500

––––– –––––

1 February Bal b/d 1,800

ANSWERS


51 DOUBLE ENTRY

£ £ Debit Purchases account 1,000 Debit VAT account 200 Credit Purchases ledger control account 1,200



52 DOUBLE ENTRY II

£ £ Debit Purchases ledger control account 240 Credit Purchases returns account 200 Credit VAT account 40

ANSWERS


53 PQ LTD

The totals for the day will be posted to the general ledger: £ £ Debit Purchases account 600 Debit VAT account 120 Credit Purchases ledger control account 720 The individual purchases will be entered in the relevant accounts in the subsidiary purchases ledger:

Credit X Ltd’s account (PL code PL23) £480 Credit Y Ltd’s account (PL code PL27) £240



CHAPTER 8

PAYMENTS AND RECEIPTS

54 NYAH’S FLORIST

Invoice 355

ANSWERS


55 NYAH CONTINUED



Bank 467.00 Dr

VAT 12.00 Cr

SLCA 395.00 Cr

Sales 60.00 Cr

Posting to subsidiary ledger


Cooper’s Corporation 77.15 Cr

Kingdon Building 63.00 Cr

Ryan’s Coffee Express 94.00 Cr

Smith’s Salon 160.85 Cr



56 VICTOR



Bank 1,264.95 Cr

VAT control 8.55 Dr

PLCA 1,213.63 Dr

Purchases 42.77 Dr

Postings to purchases ledger


Will’s Exhausts 692.07 Dr

Bumble Tyres 167.43 Dr

Paddy's Parts 41.58 Dr

Mosshill Motors 312.55 Dr

ANSWERS


57 PETTY CASH

D

£14.10 + £25.50 + £12.90 + £28.20 = £80.70.



58 DODD LTD

(a) Purple Bank plc – Words and numbers disagree

Orange Bank plc – More than six months old

Auburn Bank plc – Post-dated

Red Bank plc – Unsigned

(b)

NOTE

To: Danny Hanso

From: A Student

Date: 20 September 20X4

Subject: Checking cheques received

This note summarises the matters that you should check in respect of cheques received by the business:

date – should be no more than 6 months before today’s date and cannot be a future date

payee – should be payable to Dodd Ltd

words and numbers – the amount of the cheque should be entered in both words and numbers (and these should agree)

signature – the cheque must be signed by the drawer

Please let me know if I can be of further help to you in this matter.

ANSWERS


59 WRIGHTY


Petty cash control 50.00 Dr

Bank 50.00 Cr

Postage 32.66 Dr

Staff welfare 22.00 Dr

Travel 42.40 Dr

VAT control 7.40 Dr

Petty cash control 104.46 Cr



60 THE RIVERBANK


Postage 10.66 Dr

Tea and coffee 15.07 Dr

Travel 50.76 Dr

VAT control 9.04 Dr

Bank 45.00 Cr

ANSWERS


61 JEFFERSON


Postage 1.87 Dr


Travel 56.80 Dr

VAT control 11.36 Dr

Bank 10.00 Cr



62 VAT REGISTERED

Date Narrative Total £

VAT £

Receivables £

Other £

Cash sales£

2.6.X6 Receipt 1 12,000 12,000

2.6.X6 Receipt 2 1,200 200 1,000

The VAT element is analysed in the cash receipts book for the cash sale only. The VAT on the credit sale will have been recorded in the sales day book at the time of the sale.

ANSWERS


63 CASH RECEIPTS

£ £ Debit Cash at bank account 3,700 Credit Rent received account 500 Sales ledger control account 2,000 Cash sales account 1,000 VAT account 200



64 DOCUMENTS

a) A receivables statement reminds the receivable of the balance owing to the supplier at a particular point in time.

(b) A supplier of goods on credit will prepare an aged debt analysis to investigate the amounts due from each customer and how long the balance has been outstanding.

(c) A sales invoice will be sent to the customer to confirm the amounts payable for goods and services supplied and when the total amount is due to be paid.


Postage 1.87 Dr


Travel 56.80 Dr

VAT control 11.36 Dr

Bank 10.00 Cr

ANSWERS


65 BB LTD

BB Ltd should be most worried about the debt due from C White. It appears that no current sales have been made to this customer but old balances remain unpaid. The situation should be investigated urgently.



66 PROBLEM RECEIVABLE

You should write a polite letter to the receivable requesting payment and enquiring if there is any problem preventing prompt payment of the amounts due.

ANSWERS


67 ENTERPRISE

(a)

STATEMENT OF ACCOUNT

To: Archer Ltd ENTERPRISE LTD 21 Kirk Lane Leeds LS1 4AB

Statement date: 31 March 20X8 Tel: 0113 201407

Date Transaction Debit Credit Balance £ £ £ 1/3 Bal b/d 149.07 3/3 Inv 147 231.44 380.51 4/3 CN027 24.62 355.89 6/3 Inv 152 416.75 772.64 12/3 Inv 164 802.24 1,574.88 19/3 Payment 355.89 1,218.99 22/3 Inv 181 373.11 1,592.10


To: Forest Ltd ENTERPRISE LTD 21 Kirk Lane Leeds LS1 4AB

Statement date: 31 March 20X8 Tel: 0113 201407

Date Transaction Debit Credit Balance £ £ £ 1/3 Bal b/d 206.75 7/3 Inv 154 331.02 537.77 12/3 Inv 163 917.00 1,454.77 16/3 Payment 304.15 1,150.62 16/3 Discount 26.87 1,123.75 24/3 Inv 190 442.35 1,566.10

(b) There appears to be a problem with Forest Ltd. The payment received on 16 March appears to be in respect of invoice 154 dated 7 March (since £304.15 + £26.87 discount = £331.02).

The balance of £206.75 due at the start of the month has still not been paid. Forest Ltd should be contacted to find out why this has happened.



68 BIGGS

(a)


To: Brazil Ltd BIGGS LTD 18 Green Lane Livingston EH54 6BT

Statement date: 30 June 20X5 Tel: 0144 716029

Date Transaction Debit Credit Balance £ £ £ 2/2 Inv 2430 206.92 206.92 13/3 Inv 2461 308.44 515.36 20/3 Inv 2472 179.16 694.52 30/3 Payment 301.00 393.52 30/3 Discount 7.44 386.08 7/4 Inv 2499 448.74 834.82 10/5 Inv 2516 91.22 926.04 22/5 Inv 2529 307.14 1,233.18 6/6 Inv 2544 269.87 1,503.05 17/6 Inv 2558 406.10 1,909.15

(b)

MEMORANDUM

To: Z Zidane

From: A Student

Date: X-X-20X5

Subject: Brazil Ltd

I have studied the sales ledger account and aged debt analysis for Brazil Ltd at 30 June 20X5 and have certain concerns:

(i) The debt due to us from Brazil Ltd has grown rapidly over the last few months. We should not allow the debt to grow further unless we are confident that this company will be able to settle the amounts due.

(ii) Brazil Ltd appears to be routinely taking more than the 60 days credit that we allow. For example, invoice 2430 dated 2 February 20X5 is still outstanding.

Please let me know if you wish me to take this matter further.

ANSWERS


69 HEADINGS

A typical cash payments book will have the following column headings:

Date Details Cheque no Ledger code

Total £

VAT £

Net £



70 DISCOUNTS RECEIVED

If a business receives a prompt payment discount, it is entered into the discounts received day book.

At regular intervals, the discount received day book is totalled and the amounts are posted to the general ledger accounts: £ £ Debit Purchases ledger control account X Credit Discounts received X Credit VAT X

ANSWERS


71 PARIS

Paris Ltd

£ £ Cash book – payment 1,950 Balance b/d 2,000 Discounts received book – discount received 50 –––––

–––––

2,000 –––––

2,000 –––––



72 PETTY CASH

An imprest system provides better control, since at any time the contents of the petty cash box (cash plus paid vouchers) must equal the amount of the imprest float. It can therefore be quickly checked at any time that no cash has gone missing.

ANSWERS


73 PETTY CASH COUNT

The total of the contents of the petty cash box is £65 + £14 + £111 = £190, whereas it should be £200. £10 appears to be missing and should be investigated. If everything is double checked but still adds up to £190, then it is possible that £10 has been lost or stolen.



74 PETTY CASH FLOAT

Cash requisition = total of paid vouchers = £56. There will then be cash totalling £56 + £44 = £100 as required.

ADVANCED ANSWERS



CHAPTER 2

BOOKS OF PRIME ENTRY

75 JUNIORS

PURCHASES DAY BOOK

Date Inv/CNno

Supplier Total £

VAT £

Pre- school

£

Board games

£

Other£

8.5.X4 00148 Renfree Ltd 175.44 29.24 146.20

00149 Goldspink Ltd 483.80 80.63 403.17

00150 Evans Ltd 101.52 16.92 84.60

00151 Sandford Ltd 256.12 42.68 213.44

00152 Richings Ltd 371.54 61.92 309.62

00153 Asforis Ltd 260.22 43.37 216.85

00154 Wiseman Ltd 74.24 12.37 61.87

00155 McClean Ltd 84.72 14.12 70.60

CN0077 Aaron Ltd (50.40) (8.40) (42.00)

CN0078 Calvin Ltd (87.79)

–––––––

(14.63)

––––––

––––––

––––––

(73.16)

––––––

TOTALS 1,669.41

–––––––

278.22

––––––

363.05

––––––

175.07

––––––

853.07

––––––

ANSWERS


76 STEVENS LTD

PURCHASES DAY BOOK

Date Supplier Total £

VAT £

Zone 1 £

Zone 2 £

Zone 3 £

14.9.X2 Bradley Ltd 252.00 42.00 210.00

Hannah Ltd 564.24 94.04 470.20

Spearritt Ltd 482.40 80.40 402.00

Lee Ltd 1,291.20 215.20 1,076.00

O’Meara Ltd 381.12 63.52 317.60

Cattermole Ltd 74.92 12.48 62.44

Barrett Ltd 129.36

–––––––

21.56

––––––

107.80

––––––

––––––– ––––––

TOTALS 3,175.24

–––––––

529.20

––––––

719.80

––––––

1,138.44

–––––––

787.80

––––––



CHAPTER 3

DOUBLE ENTRY BOOKKEEPING – INTRODUCTION

77 BUSINESS EXPENDITURE

(a) Revenue

(b) Capital

(c) Capital

(d) Capital

(e) Revenue

(f) Revenue

(g) Revenue

(h) Capital

(i) Revenue

(j) Revenue

ANSWERS


78 MARK WAUGH

Total assets = Liabilities + Capital

Fixtures 12,000 Payables 8,400

Motor vehicle 30,000 Brother's loan 18,000

Inventories 21,000 Capital ?????

Bank 16,800

Cash in hand 600

––––––– –––––––

80,400 80,400

––––––– –––––––

Hence Capital = Assets – Liabilities = 80,400 – 26,400 = 54,000



CHAPTER 4

LEDGER ACCOUNTING

79 HASTINGS PLC

Trial balance at 30 June 20X1

Account name Debit £

Credit £

Administration overheads 5,743.90

Irrecoverable debt 575.33

Bank account 9,116.61

Capital 48,281.35

Non-current assets 62,432.00

PAYE/NIC liability 5,222.38

Petty cash control 156.96

Purchases 165,819.41

Purchases ledger control account 28,233.49

Purchases returns 7,242.96

Sales 372,238.56

Sales ledger control account 70,098.61

Sales returns 10,387.54

Selling and distribution overheads 7,806.45

Inventory 39,012.25

Sundry expenses 1,898.43

VAT control 16,713.76

Wages/salaries expense 104,885.01

TOTALS 477,932.50 477,932.50

ANSWERS


80 ROBERT DEMPSTER

(i) Cash at bank account

£ £

(a) Capital 10,000 (e) Vans Galore 2,000

(f) Woodside Rugby Club 65 (e) Surgiplast Ltd 150

(g) Drawings 130

Balance c/d 7,785

–––––– ––––––

10,065 10,065

–––––– ––––––

Balance b/d 7,785

(ii) The separate entity concept is the principle underlying the treatment of the owner's private expenses paid by the business. This concept requires the transactions of a business to be recorded separately from those of the owner of a business. Consequently, this payment could not be analysed as 'electricity' as it is not the electricity expense of the business. It may be thought of as a withdrawal of cash from the business by the owner.



81 TRIAL BALANCE

Trial balance is a list of balances on the ledger accounts. If the totals of the debit and credit balances on the trial balance are not equal, then an error or errors have been made either:

(a) in the posting of the transactions to the ledger accounts or

(b) in balancing of the accounts or

(c) in the transferring of the balances from the ledger account to the trial balance.

ANSWERS


CHAPTER 5

ACCOUNTING FOR CREDIT SALES, VAT AND DISCOUNTS

82 CHUNG TRADING

SALES DAY BOOK

Date Invoice no

Customer name Total £

VAT £

Wood £

Plumbing £

Roofing £

14.3.X1 14243 Abacus Ltd 723.16 120.52 86.40 367.20 149.04

14.3.X1 14244 Baltic Ltd 366.00 61.00 180.00 – 125.00

14.3.X1 14245 Chittenden Ltd 580.26 96.71 185.25 79.80 218.50

––––––– –––––– –––––– –––––– ––––––

Total 1,669.42 278.23 451.65 447.00 492.54

––––––– –––––– –––––– –––––– ––––––



83 BONIFACE LTD

(a)

SALES RETURNS DAY BOOK

Date Credit note no

Customer name

Total £

VAT £

01 £

02 £

03 £

04 £

4.11.X7 CN812 Agate Ltd 115.20 19.20 96.00

4.11.X7 CN813 Borax Ltd 77.40 12.90 64.50

4.11.X7 CN814 Carfax Ltd 12.00 2.00 10.00

–––––– ––––– ––––– ––––– ––––– –––––

Total 204.60 34.10 10.00 96.00 – 64.50

–––––– ––––– ––––– ––––– ––––– –––––

(b)

MEMORANDUM

To: Abi Kanobe

From: A Student

Date: 4 November 20X7

Subject: The role of credit notes

This memo explains the role of credit notes in a sales system. When goods are sold, they are despatched to the customer and we send an invoice detailing the amount due.

However it is possible that the customer may believe that they should pay less than the invoiced amount. Perhaps the goods were damaged in transit, so the customer will have to incur costs to repair them or will ask us to take them back. Perhaps we accidentally overcharged the customer in our invoice.

If we agree that some or all of the debt described in the invoice should be cancelled, we acknowledge this by issuing a credit note to the customer. The customer can subtract the credited amount from the invoiced amount and only needs to pay the net amount.

Please let me know if you require any further explanation of this matter.

ANSWERS


84 CREDIT CONTROL

B



CHAPTER 6

ACCOUNTING FOR CREDIT PURCHASES, VAT AND DISCOUNTS

85 ALEX STUDENT

Ward & Ward 15 Tyne

Oakland Retail Park Moortown NM18 9AA

Miss James Dickens & Co 154 Upton Street London EC1N 8AB

27 July 20X1

Dear Miss James

Re: Invoice 117761

We have today received your invoice 117761 for the total of £2,000 including VAT. On checking the details of the invoice I have noticed that the VAT calculation is incorrect, also giving an incorrect gross (total) amount. The VAT has been calculated as £400, when in fact it should be £320. The revised gross amount should be £1,920.

Can you please raise a credit note for £80 in respect of this error and forward it for my attention.

Should you require any additional information, please contact me.

Yours sincerely

Alex Student

Accounting Technician

ANSWERS


86 HAUSER LTD

(a) The following discrepancies can be identified:

ATI graphics cards with a code ATI346 were ordered, costing £40 + VAT each, but cards with a code ATI348 costing £48 + VAT each were supplied.

6 processors were ordered and invoiced for, but only 5 seem to have been delivered.

(b)

MEMORANDUM

To: Rosemary Smith

From: Accounts assistant

Date: X-X-XX

Subject: Order made to PC Traders

I have compared the purchase order, delivery note and purchase invoice in respect of order number 2177 to PC Traders Ltd.

I have noted two discrepancies:

although we ordered ATI346 graphics cards, we were supplied with slightly more expensive ATI348 graphics cards

although we ordered and were invoiced for 6 AMD processors, it appears that only 5 were delivered to us.

Perhaps you are already aware of these matters and have already sanctioned the delivery of higher quality graphics cards than originally ordered. Perhaps we have already received a credit note in respect of the undelivered processor.

If this is not the case, please advise me of any action that you would like me to take concerning these apparent discrepancies.



CHAPTER 7

CONTROL ACCOUNTS AND SUBSIDIARY LEDGERS

87 SALES RETURNS DAY BOOK

(a)

SALES RETURNS DAY BOOK

Date Credit note no

Customer name Total £

VAT £

Net £

5.11.X4 CN255 Roberts Ltd 283.20 47.20 236.00

6.11.X4 CN256 Kitchener Ltd 85.80 14.30 71.50

8.11.X4 CN257 Haig Ltd 96.00 16.00 80.00

8.11.X4 CN258 Jellicoe Ltd 185.76 30.96 154.80

9.11.X4 CN259 Kitchener Ltd 367.20 61.20 306.00

11.11.X4 CN260 Anglesey Ltd 112.80 18.80 94.00

11.11.X4 CN261 Roberts Ltd 27.12 4.52 22.60

–––––––– –––––– ––––––

Totals 1,157.88 192.98 964.90

–––––––– –––––– ––––––

(b) General ledger accounts

Sales returns account

£

11.11.X4 SRDB 964.90

£

VAT account

£

11.11.X4 SRDB 192.98

£

Sales ledger control account

£

£

11.11.X4 SRDB 1,157.88

ANSWERS


(c) Subsidiary (sales) ledger accounts

Roberts Ltd

£

£

5.11.X4 SRDB 283.20

11.11.X4 SRDB 27.12

Kitchener Ltd

£

£

6.11.X4 SRDB 85.80

9.11.X4 SRDB 367.20

Haig Ltd

£

£

8.11.X4 SRDB 96.00

Jellicoe Ltd

£

£

8.11.X4 SRDB 185.76

Anglesey Ltd

£

£

11.11.X4 SRDB 112.80



88 GENERATIONS LTD

General ledger

Purchases

£ £

18.8.X5 Bal b/d 4,562.12

24.8.X5 PDB 312.21

Purchases returns

£ £

18.8.X5 Bal b/d 904.77

24.8.X5 PRDB 28.50

VAT

£ £

24.8.X5 PDB 62.42 18.8.X5 Bal b/d 1,170.22

24.8.X5 PRDB 5.70

Purchases ledger control account

£ £

24.8.X5 PRDB 34.20 18.8.X5 Bal b/d 1,412.90

24.8.X5 PDB 374.63

Subsidiary ledger

Burton Ltd PL03

£ £

18.8.X5 Bal b/d 24.72

24.8.X5 PDB 4067 85.94

Frakes Ltd PL07

£ £

18.8.X5 Bal b/d –

19.8.X5 PDB 4063 31.44

McFadden Ltd PL12

£ £

18.8.X5 Bal b/d 87.92

22.8.X5 PDB 4066 52.23

ANSWERS


Meaney Ltd PL13

£ £

18.8.X5 Bal b/d 106.07

22.8.X5 PDB 4065 25.30

Sirtis Ltd PL19

£ £

22.8.X5 PRDB CN124 14.40 18.8.X5 Bal b/d 14.10

Spiner Ltd PL20

£ £

18.8.X5 Bal b/d 54.16

21.8.X5 PDB 4064 54.92

Stewart Ltd PL22

£ £

24.8.X5 PRDB CN125 19.80 18.8.X5 Bal b/d 41.02

19.8.X5 PDB 4062 124.80



CHAPTER 8

PAYMENTS AND RECEIPTS

89 VASE LTD

A £ Amount to top up petty cash 500 Increase in float (50) –––– 450 Cash paid in by staff (photocopying) 25 –––– 475 Cash paid to employee in return for cheque (90) –––– Petty cash expenses in the month 385 ––––

ANSWERS


90 GLOBAL LTD

(a) The following differences can be identified:

CN 1402 on statement but not on ledger account.

Inv 2200 is for £102.97 on statement but £120.97 on ledger.

Inv 2450 is for £57.06 on statement but £77.06 on ledger.

We are told that the statement is accurate, so we can enter the credit note CN 1402 on the ledger account and we must amend the amounts on the ledger for invoices 2200 and 2450 to £102.97 and £57.06 respectively.

(b) The terms of the discount offer a 2% deduction if payment is made within one week rather than waiting a maximum of 60 days which is approximately 9 weeks. The question is therefore whether it is worthwhile earning 2% for paying 8 weeks early.

2% over 8 weeks is equivalent to 2% × 8

52 = 13% annually

Since this 13% return is better than the 10% overdraft rate, the discount should be accepted.

(c) Invoice 2161 can now be paid since a credit note for £8.08 has been raised to settle the dispute.

Invoice 2182 should not be paid until the dispute is resolved.

The April transactions should now be paid, since they will be overdue by the time of the next statement.

The May transactions do not have to be paid yet; they should be delayed for payment until the next monthly statement is received, except for invoice 2506 which is eligible for the discount.

Total payable is therefore: £ Inv 2161 20.31 CN 1402 (8.08) Inv 2200 (as per statement) 102.97 Inv 2314 67.05 CN 1419 (50.00) Inv 2506 (0.98 × £41.35) 40.52 –––––– 172.77 ––––––



91 LEWIS LTD

R E M I T T A N C E A D V I C E

Company name: Global Ltd Address: 4 The Rise Bigtown BG2 1FG

Date: 3 June 20X2

Date Our ref Amount Discount taken Paid £ £ £ 02.2.X2 Inv 2161 20.31 20.31 04.3.X2 CN 1402 (8.08) (8.08) 11.3.X2 Inv 2182 41.30 12.4.X2 Inv 2200 102.97 102.97 15.4.X2 Inv 2314 67.05 67.05 20.4.X2 CN 1419 (50.00) (50.00) 02.5.X2 Inv 2377 27.11 07.5.X2 Inv 2389 44.56 19.5.X2 Inv 2410 92.30 21.5.X2 Inv 2450 57.06 28.5.X2 Inv 2506 41.35 0.83 40.52

Total paid

To: Lewis Ltd 12 High Street Bigtown BG1 2DE

£ 172.77

ANSWERS


92 ARCHER LTD

(a), (c)

PETTY CASH BOOK

Receipts Payments

Date Details Total £

Date Details Voucherno

Total £

VAT £

Postage £

Office Expenses

£

Travel £

14.8.X8 Bal b/d 200.00 15.8 Window cleaner

2417 20.00 20.00

Printer cartridge

2418 12.00 2.00 10.00

17.8 Postage 2419 6.55 6.55

Refresh-ments

2420 2.40 0.40 2.00

Train fare 2421 18.74 18.74

18.8 News-papers

2422 1.08 1.08

Headache pills

2423 3.50 3.50

20.8 Taxi fare 2424 18.00 3.00 15.00

Stationery 2425 4.80 0.80 4.00

––––––

20.8 Bal c/d 112.93

––––––

–––––

–––––

–––––

–––––

200.00

––––––

200.00

––––––

6.20

–––––

6.55

–––––

40.58

–––––

33.74

–––––

21.8.X8 Bal b/d 112.93

Bank 87.07

(b) The vouchers for the week total £87.07, so this is the amount of the cheque required to return the petty cash to its imprest level.



(d) General ledger accounts

VAT account

£ £

20 Aug Petty cash book 6.20 14 Aug Bal b/d 4,760.24

Postage account

£ £

14 Aug Bal b/d 602.41

20 Aug Petty cash book 6.55

Office expenses account

£ £

14 Aug Bal b/d 890.74


Travel expenses account

£ £

14 Aug Bal b/d 752.49


ANSWERS


93 JOHN FIELD LTD

(a), (b), (c) PETTY CASH BOOK


Date Narrative Total£

Cleaning£

Motorexps

£

Post £

Stationery£

Travel £

01 May Cash book 300 02 May Postage 18 18 03 May Travelling 12 12 04 May Cleaning 15 15 07 May Petrol 22 22 08 May Travelling 25 25 09 May Stationery 17 17 11 May Cleaning 18 18 14 May Postage 5 5 15 May Travelling 8 8 18 May Stationery 9 9 Cleaning 23 23 20 May Postage 13 13 24 May Van service 43 43 26 May Petrol 18 18 27 May Cleaning 21 21 29 May Postage 5 5 30 May Petrol 14

–––

––– 14

–––

–––

–––

––– 286 77 97 41 26 45

––– Bal c/d 14

–––

–––

–––

–––

–––

––– 300

––– 300

–––

01 Jun Bal b/d 14 Cash book 286

(d) At the end of the month, the totals of the expenditure columns must be debited to the relevant expense accounts in the general ledger:

£ £ Debit Cleaning expense account 77 Motor expenses account 97 Postage account 41 Stationery account 26 Travelling expense account 45 Credit Petty cash control account 286 The petty cash box will then be restored to its imprest:

£ £ Debit Petty cash control account 286 Credit Cash book 286



94 SQUAD LTD

(a)

CASH RECEIPTS BOOK


VAT £

Cash sales £

Receivables £

4.9.X5

4.9.X5

4.9.X5

4.9.X5

4.9.X5

4.9.X5

4.9.X5

Cash sales

A Strider

M Kenzie

D Mello

B Thomas

B Rock

M Frick

Total

120.00

247.25

104.62

349.20

427.26

126.10

307.14

–––––––

1,681.57

–––––––

20.00

––––––

20.00

––––––

100.00

–––––––

100.00

–––––––

247.25

104.62

349.20

427.26

126.10

307.14

–––––––

1,561.57

–––––––

DISCOUNTS ALLOWED BOOK


VAT £

Net £

4.9.X5

4.9.X5

D Mello

B Rock

Total

10.80

3.90

–––––––

14.70

–––––––

1.80

0.65

––––––

2.45

––––––

9.00

3.25

–––––––

12.25

–––––––

Proof of cross-cast:

£ VAT 20.00 Receivables 1,561.57 Cash sales 100.00 –––––––

Total receipts 1,681.57 –––––––

ANSWERS


(b)

£ Credit VAT 20.00 Credit Receivables 1,561.57 Credit Sales 100.00 and Debit Discounts allowed 12.25 Debit VAT 2.45 Credit Receivables 14.70



95 SOLID LTD

(a)

CASH RECEIPTS BOOK


VAT £

Receivables£

Cash sales

£

14.2.X8

14.2.X8

14.2.X8

14.2.X8

14.2.X8

14.2.X8

14.2.X8

D Asher

L Maffiah

G Mann

A Burrell

M Morgan

D Skatt

Cash sales

74.62

174.60

107.64

422.91

176.40

150.00

480.00

–––––––

1,586.17

–––––––

80.00

––––––

80.00

––––––

74.62

174.60

107.64

422.91

176.40

150.00

–––––––

1,106.17

–––––––

400.00

–––––––

400.00

–––––––

DISCOUNTS ALLOWED BOOK


VAT £

Net £

14.2.X8

14.2.X8

L Maffiah

M Morgan

5.40

3.60

–––––––

9.00

–––––––

0.90

0.60

–––––––

1.50

–––––––

4.50

3.00

–––––––

7.50

–––––––

ANSWERS


(b) General ledger accounts

VAT

£

DAB 1.50

£

CRB 80.00

Receivables

£

£

CRB 1,106.17

DAB 9.00

Sales

£

£

CRB 400.00

Discounts allowed

£

DAB 7.50

£



(c) Sales ledger accounts

D Asher

£

£

CRB 74.62

L Maffiah

£

£

CRB 174.60

DAB 5.40

G Mann

£

£

CRB 107.64

A Burrell

£

£

CRB 422.91

M Morgan

£

£

CRB 176.40

DAB 3.60

D Skatt

£

£

CRB 150.00

ANSWERS


96 BROWN LTD

(a)

CASH PAYMENTS BOOK

Date Details Cheque no

Total £

Purchases ledger

£

Other £

31.5.X2 B Able 122177 723.78 723.78

Mann Ltd 122178 556.98 556.98

Sykes & Sons 122179 689.00 689.00

Dickens Ltd 122180 879.95 879.95

Barber & Co 122181 364.84 364.84

Ward & Ward 122182 287.66

–––––––

287.66

–––––––

TOTALS 3,502.21

–––––––

3,502.21

–––––––

(b) General ledger

Account : Purchase ledger control

Debit Credit

Date Details Amount £


25 May Balance b/d 52,225.25

31 May Cash book – payments 3,502.21

Discounts received 23.24

Account : Purchases

Debit Credit






Account : Discount received

Debit Credit



25 May Balance b/d 257.90

31 May DRB 23.24

(c) Purchase ledger

Account : B Able

Debit Credit




31 May Cash book – payment 723.78


Account : Barber & Co

Debit Credit





Account : Dickens Ltd

Debit Credit






ANSWERS


Account : Mann Ltd

Debit Credit





Account : Sykes & Sons

Debit Credit






Account : Ward & Ward

Debit Credit







97 RUNNERS LTD

(a)

CASH PAYMENTS BOOK

Date Details Cheque no

PL code

Total £

VAT £

Purchases ledger

£

Cash purchases and other

£

31.8.X7 Jackson Ltd 12042 PL17 123.06 123.06

Radcliffe Ltd 12043 PL31 310.40 310.40

Merry Ltd 12044 PL24 425.62 425.62

Francis Ltd 12045 PL12 979.20 979.20

Wells Ltd 12046 PL36 506.50 506.50

Lewis Ltd

Cash purchases

12047

12048

PL21 227.48

360.00 60.00

227.48

300.00

––––––– ––––– –––––––

––––––

TOTALS 2,932.26

–––––––

60.00

–––––

2,572.26

–––––––

300.00

––––––

DISCOUNTS RECEIVED BOOK


VAT £

Net £

31.8.X7

Radcliffe Ltd

Francis Ltd

9.60

40.80

50.40

–––––––

1.60

6.80

8.40

–––––––

8.00

34.00

42.00

–––––––

42.

44

ANSWERS


(b) General ledger

Purchases ledger control account

£ £

31 Aug Cash book – payments 2,572.26 25 Aug Bal b/d 8,264.70

DRB 50.40

VAT account

£ £

31 Aug Cash book – payments 60.00 25 Aug Bal b/d 1,916.54

31 Aug DRB 8.40

Purchases account

£ £

25 Aug Bal b/d 17,042.19

31 Aug Cash book – payments 300.00

Discounts received account

£ £

25 Aug Bal b/d 2,166.95

31 Aug DRB 42.00

(c) Subsidiary ledger

Francis Ltd PL12

£ £


DRB 40.80

Jackson Ltd PL17

£ £

31 Aug Cash book – payments 123.06 25 Aug Bal b/d 502.93

Lewis Ltd PL21

£ £




Merry Ltd PL24

£ £


Radcliffe Ltd PL31

£ £


DRB 9.60

Wells Ltd PL36

£ £


ANSWERS


98 ALPHA

C Alpha's ledger

account for Beta Beta's

statement £ £ Initial balance 4,140 8,950 Payment not yet allowed for (4,080) PPD disallowed 40 Goods returned, not yet recorded −

––––– (380)

––––– Adjusted balances 4,180

––––– 4,490

––––– The remaining discrepancy is £4,490 − £4,180 = £310.



99 SUPPLIER STATEMENT

B

You think that you owe £150 more than the supplier has stated. With items, A, C and D the result would be that the supplier will state that you owe more, not less, than you think.

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