Financial Accounting 1

Solution 4
QUESTION 1

Date Transactions Effect on Account toAccount to

Transactions be Debited be
Credited
Apr 1 Started in business with Example: Cash RM Capital RM
RM 750 cash. Increase in cash 750 750
Increase in capital
4 Bought goods for cash RM Increase in Purchase Cash RM
110. purchase RM 110 110
Decrease in cash

5 Bought goods on credit RM Increase in Purchase Account

320 from Herdy. purchase RM 320 Payable –
Increase in Herdy RM
Account Payable 320

7 Sold goods for cash RM 64. Increase in sales Cash RM Sales RM

Increase in cash 64 64

10 Returned goods to Herdy Increase in Account Purchase

RM 50. purchase return/ Payable – return RM
return outwards Herdy RM 50
Decrease in 50
Account payable
13 Received loan RM 10,000 Increase in loan Cash RM Long term
from M Bank and repay Increase in cash 10,000 loan - M
within 2 years. Bank RM
10,000
14 Bought goods on credit RM Increase in Purchase Account
414 from Squire Enterprise. purchase RM 414 payable –
Increase in Squire
account payable Enterprise
RM 414
17 Sold goods to Square Sdn Increase in Account Sales RM
Bhd RM 100 on credit. Account receivable 100
Receivable – Square
Increase in sales Sdn Bhd
RM 100
 20 Paid Herdy’s account by Decrease in Account Cash RM
cash RM 270. Account payable Payable – 270
Decrease in cash Herdy RM
270
21 Paid advertising expenses Decrease in cash Advertising Cash RM
RM 60 by cash. Increase in expenses 60
advertising RM 60
expenses
24 Received payment from Decrease in Cash RM Account
Square Sdn Bhd RM 80. account 80 receivable
receivable – Square
Increase in cash Sdn Bhd
RM 80
28 Owner withdraw cash Increase in Drawings Cash RM
amount RM 150 for drawings RM 150 150
personal use. Decrease in cash

QUESTION 2

Date Transactions Effect on Account to Account to

Transactions be Debited be
Credited
Jan 1 Owner starts a business Example: Cash Capital
with RM 10,000 cash and Increase in cash 10,000 22,000
RM 12,000 of equipment. Increase in Equipment
equipment 12,000
Increase in capital
3 Increase in bank Bank RM Cash 5,000
Deposit cash to bank
Decrease in cash 5,000
account RM 5,000.
4 Increase in Purchase Cash RM
Bought goods RM 500 by Purchase RM 500 500
cash. Decrease in cash

5 Bought goods on credit Purchase Account

from Berjaya Enterprise Increase in RM 1,100 Payable –
RM 1,100 purchase Berjaya
Increase in Enterprise
 Account Payable RM 1,100
8 Cash RM Sales RM
Sold goods RM 400 and
Increase in cash 400 400
received cash.
Increase in sales
11 Increase in Rental Bank RM
Paid premise rental RM expenses expenses 300
300 using cheque. Decrease in bank RM 300

12 Increase in Furniture Cash RM

Bought new furniture RM furniture RM 2,000 2,000
2,000 by cash. Decrease in cash

16 Account Sales RM
Sold goods to Amna Increase in sales Receivable 3,200
Enterprise RM 3,200 on Increase in – Amna
credit. Account Enterprise
receivable RM 3,200
23 Increase in Stationery Cash RM
Bought stationery for office
expenses RM 50 50
use RM 50 by cash.
Decrease in cash
27 Sold goods by cash RM Increase in cash Cash RM Sales RM
800. Increase in sales 800 800
28 Increase in Purchase Cash RM
Restock goods RM 500 and
purchase RM 500 500
paid cash.
Decrease in cash
31 Decrease in bank Account Bank RM
Decrease in Payable – 1,100
Paid to Berjaya Enterprise
Account payable Berjaya
full amount by cheque.
Enterprise
RM 1,100