Basic Accounting eBook | 45 Zackry, a furniture distributor had the following transaction in June 2021. June2021 Transactions Debit Credit 5 Commenced business with cash in handrm5000 and cash at bank RM100000 6 Bought cupboards worth rm2200 paid bycheque. 8 Purchased stationery worth rm200 by cash. 10 Paid rent for rm650 by cheque. 12 Cash sales for rm6000, bank in the amount onthe same day. 15 Took rm150 study table for own use. 18 Purchased shelves, tables and chairs for RM17,000 and paid by cheque 21 Paid carriage outwards by cash for rm150 24 Bought vehicle on credit from Suria Motor worthRM30,000 27 Brought in furniture from his house for businessuse worth RM800 28 Paid salary of RM1,200 by cash. Tutorial / Exercise
Basic Accounting eBook | 46 Ledger format: XXXX ACCOUNT (Account Name) Date Item Amount (RM) Date Item Amount (RM) DEBIT SIDE CREDIT SIDE Posting to ledger Step how to record the transaction into the ledger? a. Identify the account involve in the transactions 1 b. Identify the debit/credit of the account involve 2 c. Prepare the ledger involve based on the ledger format 3 d. Write the ledger title ( at least 2 account involved) 4 e. Record the Date, item and Amount. Do make sure record in the correct side of debit and credit d. To close the account: select the greater amount either on debit or credit side e. Write down the total bot for both debit & credit side and calculate the amount for a balance to carried down ( bal c/d) f. End the closing account process with transfer the Balance c/d to Balance brought down (bal b/d) for the next month record.
Basic Accounting eBook | 47 Example 2 Questions: Please prepare a related ledger based on transaction below and close them:On 20 April 2021, pay rental by cash at RM750. Step 1: From this transaction there are 2 accounts involve: - o Rental Account an expense o Cash Account an asset. Step 2: Rental account is under expense category and increase >> DebitCash account is under asset and decrease >> Credit Step 3 & 4: Prepare 2 ledger/account that involve and write the ledger title we decide in step 1. Rental Account Cash Account Step 5: Based on double entry decide in Step 2, record the date, item and amount. 2021 RM 2021 Apr Apr 20 Rental 750 20 Cash 750 Note: Debit and Credit is based on the ledger title not the item record in the account. Rental Account Record details in Rental account on Debit side Record details in Cash account on Credit side Cash Account
Basic Accounting eBook | 48 Step 6: Debit Rental account amount on debit is greater then credit side, so wefollow the amount as the total to write both debit and credit side. Debit Cash account amount on credit is greater than debit side, so we follow theamount as the total to write both debit and credit side. Rental Account Cash Account 2021 RM 2021 RM Apr Apr 20 Cash 750 20 Rental 750 750 750 750 750 Step 7: Complete credit side of Rental account with amount (total – transactionon credit side if incurred) and write it as Balance c/d, Date: last day of the monthComplete debit side of Cash account with amount (total – transaction on credit side if incurred) and write it as Balance c/d, Date: last day of the month. Rental Account Cash Account 2021 RM 2021 RM 2021 RM 2021 RM Apr Apr Apr Apr 20 Cash 750 30 Bal c/d 750 30 Bal c/d 750 30 Rental 750 750 750 750 750 Apr Apr 1 Bal b/d 750 1 Bal b/d 750 Step 8: Lastly, brought down the Balance c/d to opposite side below the totalfigure for the next month entry. Rental Account Cash Account 2021 RM 2021 RM 2021 RM 2021 RM Apr Apr Apr Apr 20 Cash 750 30 Bal c/d 750 30 Bal c/d 750 20 Rental 750 750 750 750 750 Apr Apr 1 Bal b/d 750 1 Bal b/d 750
Basic Accounting eBook | 49 Q Example Please prepare a related ledger based on transaction below and close all of them a. On 11 Mac 2011, Bought equipment on credit from Zaidi Enterprise, RM20, 000 Solutions: Equipment Account Zaidi Enterprise Account 2020 Jan RM 2020 RM Jan 2020 Jan RM 2020 Jan RM 11 Zaidi Ent 20000 31 Bal c/d 20000 31 Bal c/d 20000 11 Equipment 20000 20000 20000 20000 20000 Apr 1 Bal b/d 20000 Apr 1 Bal b/d 20000 Tutorial / Exercise 1. Below are the business transactions for Manis Enterprise for April 2020.Please do record them in the relevant ledgers. April 01 Brought in Rm4500 cash and Rm5700 bank into business 07 Sold goods to Max Ltd. RM9900. 11 Paid for advertising RM790 by cash. 16 Cash sales RM320 21 Purchased goods from Thick Ltd Rm6600 25 Received cheque from Max Ltd RM2000 and give discount RM50.
Basic Accounting eBook | 50 2. U&U Enterprise running a business on furniture. The transactions for themonth of July are as below. You are required to prepare related ledger. July 1 Start a business with cash in hand RM20,000 and bank RM30,000. 6 Bought a vehicle on credit from Ehsan Transport RM75,000. 8 Purchase goods from Gogo RM50,000 by credit. 12 Paid advertising expense with cash RM300 14 Sold goods RM50,000 to Rose on credit. 16 Rose has returned the goods worth RM3,000. 19 Rose sent cheque to settle her RM10,000 debts 25 Paid to Gogo with cheque RM8,800 after received RM1,200 discount. 26 U&U took goods for his personal used RM5,000. 30 Paid salary to worker RM500 by cash. 3. Yuna is the owner of Yuna’s Cake in Penang. Following are balance as at 1 July2022: RM Office equipment 8500 Cash at bank 12000 Debtor: Siti Catering 1500 Account payable: Xoxo Bhd 3000 Capital 19000 Business transactions for July 2022 are as follows: July 12 3 8 12 15 28 Transactions Yuna withdrew cash from the bank account for office use worth RM500 Credit sales to Siti Catering worth RM2220 Siti Catering returned expired cupcakes worth RM220 Yuna made additional contribution to capital by buying in a machine worth RM1000 Yuna paid shop lot rental by cheque worth RM650
Basic Accounting eBook | 51 4. The following are the list of balances of Delima Trading (selling various typesof clothes) as at 01 July 2020. Cash at bank RM28,000 Payable Account –Merah Trading RM40,000 Land and building RM300,000 Receivable Account – Melati Enterprise RM15,000 Capital RM ? During the month of July, the following transactions too place: Jul 8 Received cash from Melati enterprise RM3,000. Cash Discount 150 18 Owner brought in Vehicle costing RM25,000 as additional capital 20 Bought clothes RM8,500 on credit from Merah Trading 22 Sold clothes RM7,000 (Gross) on credit to Melati Enterprise less trade discount 10% 23 Owner withdrew cash RM1,000 from business bank account for personal use 24 Owner took clothes RM400 for business advertising purposes 25 Owner took clothes RM200 for her daughter’s birthday present 30 Paid administrative expenses RM700 by business cash at bank 31 Withdrew business cash at bank RM1,200 for office use
Basic Accounting eBook | 52 REFERENCE Accounting Tools: Accounting CPE Courses and Books. (2022). Retrieved from AccountingTool Web Site: www.Accountingtools.com Alan Sangster, F. W. (2021). Business Accounting 1 Vol 1 13th edn. UK: Pearson EducationLimited. Averkamp, H. (2003). Explanation: AccountingCoach. Retrieved from Accounting Coach: www.accountingcoach.com Definition: Business Dictionary. (2022). Retrieved from Business Dictionary Web Site:www.businessdictionary.com Kie, h. S. (2020). Fundamental of Accounting. Shah Alam: Oxford Fajar Sdn Bhd. Media, B. L. (2021). CIMA - F1 Financial Reporting and Taxation. United Kingdom: BPP Learning Media Ltd. S John Gabriel, A. M. (2010). Financial Accounting. New Delhi: Tata McGrawHill Education Private Limited. Shaari, I. (2004). Account Principles. Malaysia: Pearson/Prentice Hall.
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