Answers To Chapters 1to7

Principles of Accounts for CSEC by David Austen Answers to Chapter 1
Chapter 1
Question 1 – p. 12
a) Vehicle Asset
b) Shop fittings Asset
c) Cash at bank Asset
d) Bank loan Liability
e) Owner’s investment in the business Capital
f) Inventory Asset
g) Trade receivables Asset
h) Bank overdraft Liability
i) Trade payables Liability
j) Machinery Asset
a) Cash in hand Asset
b) Equipment Asset
c) Amounts owing to suppliers Liability
d) Furniture Asset
e) Land Asset
f) Loan from a friend Liability
g) Value of owner’s stake in the business Capital
h) Amounts owed by customers Asset
i) Cash at bank Asset
j) Fittings Asset
Total assets Capital Total liabilities
Assets = Capital + Liabilities
$ $ $
Business A 80,000 60,000 20,000

Business B 42,000 31,000 11,000
Business C 57,000 24,000 33,000
Business D 650,000 490,000 160,000
Business E 190,000 170,000 20,000
Business F 640,000 558,000 82,000

Assets = Capital + Liabilities
$ $ $
Business G 220,000 190,000 30,000

Business H 912,000 826,000 86,000
Business I 325,000 273,000 52,000
Business J 560,000 483,000 77,000
Business K 917,000 865,000 52,000
Business L 262,000 220,000 42,000
ISBN 978-1-4085-0911-1 1
a) Total assets: $123,000
b) Total liabilities: $34,000
c) Capital: $89,000
d)
Marlene’s retail unit
Balance Sheet at 31 December 2011
$ $
ASSETS CAPITAL 89,000
Furniture and fittings 64,000
Inventory 36,000 LIABILITIES
Trade receivables 10,000 Bank loan 20,000
Cash at bank 8,000 Trade payables 14,000
Cash in hand 5,000
123,000 123,000
c) Capital: $75,000
d)
Andy’s bicycle business
Balance Sheet at 28 February 2011
$ $
Equipment 78,000
Inventory 33,000 LIABILITIES
Trade receivables 9,000 Bank loan 42,000
Cash in hand 6,000
141,000 141,000
c) Capital: $382,000
ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 2

d)
Donnie’s software business
Balance Sheet at 31 October 2011
$ $ $ $
NON-CURRENT ASSETS CAPITAL 382,000
Premises 300,000
Equipment 90,000 NON-CURRENT LIABILITIES
Delivery vehicle 32,000 Bank loan 60,000
422,000
CURRENT ASSETS
Inventory 16,000
Trade receivables 14,000 CURRENT LIABILITIES
Cash in hand 4,000
42,000
464,000 464,000
e)
Donnie’s software business
Balance Sheet at 31 October 2011
$ $ $ $
CURRENT ASSETS CURRENT LIABILITIES
Cash in hand 4,000 Trade payables 22,000
Cash at bank 8,000
Trade receivables 14,000 NON-CURRENT LIABILITIES
Inventory 16,000 Bank loan 60,000
42,000
Delivery vehicle 32,000
Equipment 90,000
Premises 300,000
422,000
464,000 464,000
Answer included in ‘Model answers to selected questions’ in book

Chapter 2
Balance Sheet at 2 March 2011

$ $
Vehicle 12,000
Equipment 15,000
Bank 13,000
40,000 40,000

$ $
Vehicle 12,000
Equipment 15,000 LIABILITIES
Furniture 8,000 Payable 8,000
Bank 13,000
48,000 48,000

$ $
Vehicle 12,000
Bank 28,000 Bank loan 15,000
63,000 63,000

$ $
Vehicle 12,000
60,000 60,000


$ $
Vehicle 12,000
54,000 54,000
Balance Sheet at 2 January 2011

$ $
Premises 90,000
Vehicle 15,000
Bank 5,000
110,000 110,000

$ $
Premises 90,000
Vehicle 15,000 LIABILITIES
122,000 122,000

$ $
Premises 90,000
Equipment 24,000 Payable 24,000
146,000 146,000

$ $
Premises 90,000
154,000 154,000


$ $
Premises 90,000
134,000 134,000

A = C + L
$ $ $
Starting figures 40,000 30,000 10,000

a) Owner withdrew a cheque for $4,000 for 36,000 26,000 10,000
private use
b) Purchased new vehicle for $16,000 on credit 52,000 26,000 26,000
(+16,000) (+16,000)
c) Repaid $2,000 of a loan from the bank. The 50,000 26,000 24,000
funds were taken from the business’s bank (−2,000) (−2,000)
account
d) Purchased some machinery for $7,000 and 50,000 26,000 24,000
paid by cheque (+7,000
−7,000)
e) Paid a payable $5,000 by cheque 45,000 26,000 19,000
(−5,000) (−5,000)
f) Sold some equipment worth $3,000 and 45,000 26,000 19,000
received a cheque for this amount (−3,000
+3,000)


A = C + L
$ $ $
Starting figures 90,000 75,000 15,000

a) Paid a payable $8,000 by cheque 82,000 75,000 7,000
b) Purchased a new vehicle and paid $17,000 82,000 75,000 7,000
by cheque (+17,000
−17,000)
c) Owner withdrew a cheque for $1,000 for 81,000 74,000 7,000
private use (−1,000) (−1,000)
d) Purchased some new equipment for 91,000 74,000 17,000
$10,000 on credit (+10,000) (+10,000)
e) Repaid part of a bank loan $6,000. The 85,000 74,000 11,000
funds were taken from the business’s bank (−6,000) (−6,000)
account
f) Some old machinery worth $6,000 sold on 85,000 74,000 11,000
credit for this amount (−6,000
+6,000)
2 February (example) A vehicle has been purchased for $18,000 and paid for by cheque.
3 February The owner withdrew a cheque for $3,000 for private use.
4 February Some equipment was purchased on credit for $16,000.
5 February The payable was paid $6,000 by cheque.
2 December (example) Some equipment has been purchased on credit for $22,000.
3 December Borrowed $15,000 from the bank. The funds were paid into the business’s bank account.
4 December Some equipment worth $6,000 was sold for this amount on credit.
5 December The receivable paid $3,000 by cheque.
6 December The payable was paid $11,000 by cheque.

Chapter 3
Question 1– p. 28
Vehicles
40,000
14,000
Bank
19,000 14,000
4,000 2,000
Capital
2,000 47,000
Bank loan
12,000
4,000
Equipment
27,000
4,000
Bank
8,000 4,000
2,000
700
Capital
700 29,000
Payable
2,000 6,000
First account Second account affected

Transaction affected
Account Increase/ Account Increase/
decrease decrease
Owner started business by Bank Increase Capital Increase
investing money in a business’s
bank account
Purchased a vehicle and paid by Vehicle Increase Bank Decrease
cheque
Purchased some equipment on Equipment Increase Payable Increase
credit
Owner withdrew a cheque for Capital Decrease Bank Decrease
private use
Paid the payable by cheque Payable Decrease Bank Decrease

First account Second account affected

Transaction affected
Account Increase/ Account Increase/
decrease decrease
Some furniture was purchased by Furniture Increase Bank Decrease

cheque
A bank loan was arranged. The Bank Increase Bank Loan Increase
funds were paid into the
business’s bank account
Purchased a vehicle on credit Vehicle Increase Payable Increase
Sold some unwanted furniture on Furniture Decrease Receivable Increase
credit
Repaid part of the bank loan by a Bank loan Decrease Bank Decrease
withdrawal of funds from the
Dr Vehicle Cr
14,000
Dr Bank Cr
7,000 300
6,000 9,200
2,500
Dr Capital Cr
300 17,000
Dr Payable Cr
2,500 4,000
9,000
Dr Equipment Cr
9,000
9,200
Dr Bank loan Cr
6,000
Dr Vehicle Cr
13,000
Dr Equipment Cr
8,000 800
5,000
Dr Bank Cr
4,000 1,000
Dr Cash Cr
400 200
100

Dr Capital Cr
200 24,200
Dr Payable Cr
1,000 1,200
5,000
Dr Receivable Cr
800 100
Transaction Accounts affected Increase/decrease Debit/credit
Purchased some furniture by Furniture Increase Debit

cheque
Bank Decrease Credit
Payable Decrease Debit
Paid a payable by cheque
Owner withdrew cash for Capital Decrease Debit

private use
Cash Decrease Credit
Vehicle Increase Debit
Purchased a vehicle on credit
Payable Increase Credit
Transaction Accounts affected Increase/decrease Debit/credit

Owner withdrew a cheque for Capital Decrease Debit
private use
Purchased equipment on Equipment Increase Debit
credit
Payable Increase Credit
Paid a payable in cash Payable Decrease Debit
Cash Decrease Credit
Sold some unwanted furniture Receivable Increase Debit
on credit
Furniture Decrease Credit
Received cash from a Cash Increase Debit
receivable
Receivable Decrease Credit

Debit Credit
Receiving value Giving value
In Out
Account Explanation Account Explanation
Purchased furniture and paid Furniture Receives value as Cash Gives value as
in cash new asset is money goes out of
purchased the account
Purchased machinery and Machinery Receiving value as Bank Giving value as
paid by cheque new machinery is money goes out of
purchased the account
Purchased equipment on Equipment Receiving value as Payable Giving value as
credit new equipment is supplier provides
purchased equipment
Paid the payable by cheque Payable Receiving value as Bank Giving value as
payment is made to money goes out of
supplier the account
Owner invested an additional Bank Receiving value as Capital Giving value as
amount in the business’s money goes into private resources are
bank account account transferred to the
business
Owner withdrew a cheque for Capital Receiving value as Bank Giving value as
private use money is given to money goes out of
owner the account

Debit Credit
Receiving value Giving value
In Out
Account Explanation Account Explanation
Purchased a vehicle and paid Vehicle Receiving value as Bank Giving value as
by cheque new vehicle is money goes out of
purchased account
Paid a payable by cheque Payable Receiving value as Bank Giving value as
payment is made to money is given to
supplier supplier
Sold some unwanted furniture Receivable Receiving value as Furniture Giving value as
on credit customer receives furniture leaves the
the value of the business
furniture
Received cash from a Cash Receiving value as Receivable Giving value as
receivable money is given by a money is provided by
receivable to the the customer
business
Owner increased investment Bank Receiving value as Capital Giving value as
in the business by transferring money is given to money is provided by
private funds into the the business the owner
Owner withdrew cash for Capital Receiving value as Cash Giving value as
private use money is given to money leaves the
the owner business
Transferred cash to the Bank Receiving value as Cash Giving value as
business’s bank account money goes into the money leaves the
bank cash register
Question 11– p. 31
Dr Premises Cr
Jan 1 Balance 90,000
Dr Equipment Cr
Jan 1 Balance 12,000 Jan 5 Receivable 500
3 Payable 4,100
Dr Vehicle Cr
Jan 1 Balance 9,000
Dr Bank Cr
Jan 1 Balance 3,300 Jan 2 Bank loan 1,000
6 Capital 4,000
7 Cash 200
Dr Cash Cr
Jan 1 Balance 700 Jan 4 Capital 300
7 Bank 200
Dr Capital Cr
Jan 4 Cash 300 Jan 1 Balance 100,000
6 Bank 4,000

Dr Bank Loan Cr
Jan 2 Bank 1,000 Jan 1 Balance 15,000
Dr Payable Cr
Jan 3 Equipment 4,100
Dr Receivable Cr
Jan 5 Equipment 500
Ross
$ $ $ $
Premises 90,000
Equipment 15,600 NON-CURRENT LIABILITIES
Vehicle 9,000 Bank loan 14,000
114,600
CURRENT ASSETS CURRENT LIABILITIES
Receivable 500 Payable 4,100
Bank 6,500
Cash 200
7,200
121,800 121,800

Chapter 4
Question 1– p. 36
Dr Bank Cr
Feb 1 Balance 12,000 Feb 2 Purchases 1,200
21 Sales 520 4 Rent 420
8 Insurance 180
18 Rent 420
Dr Cash Cr
Feb 1 Balance 400 Feb 19 Insurance 40
5 Sales 330 24 Purchases 60
Dr Capital Cr
Feb 1 Balance 12,400
Dr Purchases Cr
Feb 2 Bank 1,200
11 Payable 840
24 Cash 60
Dr Rent Cr
Feb 4 Bank 420
18 Bank 420
Dr Sales Cr
Feb 5 Cash 330
14 Receivable 910
21 Bank 520
Dr Insurance Cr
Feb 8 Bank 180
19 Cash 40
Dr Payable Cr
Feb 11 Purchases 840
Dr Receivable Cr
Feb 14 Sales 910
Dr Bank Cr
June 1 Balance 14,400 June 2 Purchases 4,700
21 Sales 810 3 Rent 740
19 Electricity 210
Dr Cash Cr
June 1 Balance 700 June 7 Wages 580
6 Sales 490 14 Wages 490
24 Purchases 110
Dr Capital Cr
June 1 Balance 15,100

Dr Purchases Cr
June 2 Bank 4,700
11 Payable 1,470
24 Cash 110
Dr Rent Cr
June 3 Bank 740
Dr Sales Cr
June 6 Cash 490
13 Receivable 1,420
21 Bank 810
Dr Wages Cr
June 7 Cash 580
14 Cash 490
Dr Payable Cr
June 11 Purchases 1,470
Dr Receivable Cr
June 13 Sales 1,420
Dr Electricity Cr
June 19 Bank 210
Dr Equipment Cr
April 1 Balance 6,200
18 Bank 1,020
Dr Bank Cr
April 1 Balance 8,400 April 8 Drawings 240
21 Sales 720 11 Purchases 510
18 Equipment 1,020
Dr Cash Cr
April 1 Balance 300 April 13 Wages 620
5 Sales 1,230 19 Drawings 90
27 Wages 580
Dr Capital Cr
Dr Purchases Cr
April 4 Payable 3,600
11 Bank 510
Dr Sales Cr
April 5 Cash 1,230
9 Receivable 470
21 Bank 720
Dr Drawings Cr
April 8 Bank 240
19 Cash 90

Dr Payable Cr
April 4 Purchases 3,600
Dr Receivable Cr
April 9 Sales 470
Dr Wages Cr
April 13 Cash 620
27 Cash 580
Dr Fittings Cr
Oct 1 Balance 8,600 Oct 18 Cash 300
Dr Bank Cr
Oct 1 Balance 7,800 Oct 11 Rent 770
22 Payable 3,000
29 Drawings 390
Dr Cash Cr
Oct 1 Balance 700 Oct 4 Purchases 500
7 Sales 990 12 Drawings 110
18 Fittings 300
25 Receivable 210
Dr Capital Cr
Oct 1 Balance 17,100
Dr Purchases Cr
Oct 4 Cash 500
6 Payable 4,240
Dr Sales Cr
Oct 7 Cash 990
15 Receivable 440
Dr Drawings Cr
Oct 12 Cash 110
29 Bank 390
Dr Payable Cr
Oct 22 3,000 Oct 6 Purchases 4,240
Dr Receivable Cr
Oct 15 Sales 440 Oct 25 Cash 210
Dr Rent Cr
Oct 11 Bank 770

Account to be Account to be
Transaction
debited credited
Paid wages in cash Wages Cash
Purchased goods for resale on credit Purchases Payable
Owner withdrew cheque for private use Drawings Bank
Paid payable in cash Payable Cash
Sold goods on credit Receivable Sales
Sold goods for cash Cash Sales
Purchased furniture by cheque Furniture Bank
Owner made additional investment of money in the
Cash/Bank Capital
business
Paid rent by cheque Rent Bank
Received cheque from a receivable Bank Receivable
Transaction Account to be Account to be

debited credited
Paid salaries by cheque Salaries Bank
Arranged a bank loan. The funds were paid into the
Bank Bank loan
Sold goods and paid the proceeds into the bank Bank Sales
Purchased goods for resale for cash Purchases Cash
Owner withdrew cash for private use Drawings Cash
Paid payable by cheque Payable Bank
Sold goods on credit Receivable Sales
Paid bank loan interest. The funds were transferred from
Loan interest Bank
the business’s bank account
Received cash from a receivable Cash Receivable
1 January Purchased goods for resale and paid by cheque, $6,000
2 January Cash sales totalled $3,200
3 January Paid general expenses by cheque, $320
4 January Sold goods on credit, $1,730
5 January Purchased goods on credit, $2,290
1 May Sold goods on credit, $3,790
2 May Paid wages in cash, $280
3 May Purchased goods for resale and paid in cash, $170
4 May Purchased goods for resale on credit, $1,200
5 May Received cheque from receivable, $2,000
Dr Premises Cr
March 1 Balance 120,000

Dr Vehicle Cr
Dr Equipment Cr
March 1 Balance 8,900 March 17 Bank 400
24 Bank 2,800
Dr Receivables Cr
March 1 Balance 7,300 March 15 Bank 2,800
Dr Bank Cr
March 1 Balance 6,400 March 3 Payable 1,700
5 Cash 800 10 Insurance 420
15 Receivable 2,800 18 Loan interest 120
17 Equipment 400 24 Equipment 2,800
30 Vehicle exp 230
Dr Cash Cr
March 1 Balance 800 March 5 Bank 800
4 Sales 1,470 12 Wages 580
26 Wages 630
29 Insurance 180
Dr Capital Cr
Dr Bank loan Cr
Dr Payables Cr
March 3 Bank 1,700 March 1 Balance 8,900
8 Purchases 3,200
Dr Sales Cr
March 4 Cash 1,470
22 Cash 1,280
Dr Purchases Cr
March 8 Payable 3,200
Dr Insurance Cr
March 10 Bank 420
29 Cash 180
Dr Wages Cr
March 12 Cash 580
26 Cash 630
Dr Loan interest Cr
March 18 Bank 120
Dr Drawings Cr
March 19 Cash 250
Dr Vehicle expenses Cr
March 30 Bank 230


Chapter 5
Question 1– p. 44
Trial Balance at 31 December 2010

Dr Cr
$ $
Furniture 15,200
Receivable 2,600
Bank 700
Cash 300
Capital 17,900
Payable 3,300
Purchases 4,100
Sales 3,100
Wages 1,100
Drawings 300
24,300 24,300
Trial Balance at 31 January 2011

Dr Cr
$ $
Vehicle 18,900
Receivables 3,300
Bank 1,100
Cash 500
Capital 10,200
Payables 8,400
Bank loan 6,000
Purchases 5,600
Sales 6,500
Rent 900
Drawings 800
31,100 31,100


Dr Cr
$ $
Advertising 600
Bank loan 7,000
Capital 10,500
Cash at bank 1,200
Payables 400
Receivables 900
Drawings 2,300
General expenses 700
Purchases 6,100
Sales 8,800
Vehicle 14,900
26,700 26,700
Trial Balance at 31 March 2011

Dr Cr
$ $
Capital 13,700
Cash at bank 600
Cash in hand 100
Payables 2,500
Receivables 1,400
Drawings 2,200
Electricity 300
Furniture 14,900
Loan interest 500
Purchases 7,700
Salaries 11,200
Sales 22,700
38,900 38,900
Dr Vehicle Cr
Dr Equipment Cr
11 Bank 800
Dr Receivables Cr
April 1 Balance 4,700 April 18 Bank 2,700
22 Sales 1,600

Dr Bank Cr
April 1 Balance 3,100 April 9 Rent 700
12 Cash 600 11 Equipment 800
18 Receivable 2,700 19 Drawings 600
20 Payables 2,000
Dr Cash Cr
April 1 Balance 500 April 7 Drawings 200
4 Cash 1,000 12 Bank 600
28 Wages 900
Dr Capital Cr
Dr Payables Cr
April 20 Bank 2,000 April 1 Balance 3,600
1 Purchases 1,100
Dr Sales Cr
April 1 Cash 1,000
22 Receivables 1,600
25 Cash 800
Dr Purchases Cr
April 1 Payables 1,100
Dr Drawings Cr
April 7 Cash 200
19 Bank 600
Dr Rent Cr
April 9 Bank 700
Dr Wages Cr
April 15 Cash 500
28 Cash 900
Trial Balance at 30 April 2011

Dr Cr
$ $
Vehicle 14,800
Equipment 12,000
Receivables 3,600
Bank 2,300
Cash 100
Capital 30,700
Payables 2,700
Sales 3,400
Purchases 1,100
Drawings 800
Rent 700
Wages 1,400
36,800 36,800


Chapter 6
a)
$
Sales 16,300
less Purchases 7,500
Gross profit 8,800
b)
$
Gross profit 8,800
less Total expenses 4,200
Profit 4,600
c)
Dr Bank Cr
Feb Balance 2,300 Feb Purchases 7,500
Sales 16,300 Rent 2,500
Wages of assistant 900
Insurance 800
d)
Sophie
Balance Sheet at 28 February 2011
$ $
Fittings 19,400
Bank 6,900 Payables 1,900
32,500 32,500
a)
$
Sales 22,500
Gross profit 10,700
b)
$
Gross profit 10,700
Profit 5,100

c)
Dr Bank Cr
June Balance 3,500 June Purchases 11,800
Sales 22,500 Wages 4,200
Light and heat 500
Administration expenses 900
d)
Jack
Balance Sheet at 30 June 2011
$ $
Shop premises 92,000
118,600 118,600
a)
$
Sales 9,900
Gross profit 6,700
b)
$
Gross profit 6,700
Profit 4,600
c), d), e), f)

Dr Equipment Cr
Aug 1 Balance 11,600
Dr Furniture Cr
Dr Bank Cr
Aug 1 Balance 2,900 Aug Purchases 3,200
Sales 9,900 Wages 800
Rent 700
Light and heat 600
Dr Capital Cr
31 Profit 4,600
Dr Payables Cr
Aug 1 Balance 1,100
Dr Sales Cr
Aug 31 Trading 9,900 Aug Bank 9,900

Dr Purchases Cr
Aug Bank 3,200 Aug 31 Trading 3,200
Dr Wages Cr
Aug Bank 800 Aug 31 Profit and loss 800
Dr Rent Cr
Dr Light and heat Cr

Dr Trading Account for the month ended 31 August 2011 Cr

Purchases 3,200 Sales 9,900
Gross profit 6,700
Dr Profit and Loss Account for the month ended 31 August 2011 Cr
Wages 800 Gross profit 6,700
Rent 700
Light and heat 600
Profit 4,600
g)
Amy
Balance Sheet at 31 August 2011
$ $
Equipment 11,600
Furniture 10,500 LIABILITIES
29,600 29,600
a)
$
Sales 10,300
Gross profit 8,200
b)
$
Gross profit 8,200
less total expenses 2,000
Profit 6,200
c), d), e), f)

Dr Premises Cr
Sept 1 Balance 65,000
Dr Equipment Cr

Dr Bank Cr
Sept 1 Balance 4,400 Sept Purchases 2,100
Sales 10,300 Insurance 700
Loan interest 200
Wages 1,100
Dr Capital Cr
30 Profit 6,200
Dr Bank loan Cr
Dr Sales Cr
Sept 30 Trading 10,300 Sept Bank 10,300
Dr Purchases Cr
Sept Bank 2,100 Sept 30 Trading 2,100
Dr Insurance Cr
Sept Bank 700 Sept 30 Profit and loss 700
Dr Loan interest Cr
Sept Bank 200 Sept 30 Profit and loss 200
Dr Wages Cr
Sept Bank 1,100 Sept 30 Profit and loss 1,100
Dr Trading Account for the month ended 30 September 2011 Cr

Gross profit 8,200
Dr Profit and Loss Account Cr

for the month ended 30 September 2011
Insurance 700 Gross profit 8,200
Loan interest 200
Wages 1,100
Profit 6,200
g)
Neil
Balance Sheet at 30 September 2011
$ $
Premises 65,000
87,800 87,800
a)
$
Sales 7,700
Gross profit 2,400

b)
$
Gross profit 2,400
Loss 600
c), d), e), f)

Dr Furniture Cr
July 1 Balance 11,200
Dr Equipment Cr
Dr Bank Cr
July 1 Balance 1,800 July Purchases 5,300
Sales 7,700 Rent 1,100
Light and heat 600
Wages 1,300
Dr Capital Cr
July 31 Loss 600 July 1 Balance 13,600
Dr Payables Cr
Dr Sales Cr
July 31 Trading 7,700 July Bank 7,700
Dr Purchases Cr
July Bank 5,300 July 31 Trading 5,300
Dr Rent Cr
July Bank 1,100 July 31 Profit and loss 1,100
Dr Light and heat Cr

July Bank 600 July 31 Profit and loss 600
Dr Wages Cr
July Bank 1,300 July 31 Profit and loss 1,300
Dr Trading Account for the month ended 31 July 2011 Cr

Gross profit 2,400
Dr Profit and Loss Account for the month ended 31 July 2011 Cr
Rent 1,100 Gross profit 2,400
Light and heat 600 Loss 600
Wages 1,300

g)
Winston
Balance Sheet at 31 July 2011
$ $
Furniture 11,200
15,600 15,600
a)
$
Sales 12,900
Gross profit 3,700
b)
$
Gross profit 3,700
Loss 1,500
c), d), e), f)

Dr Premises Cr
Dr Equipment Cr
Dr Bank Cr
April 1 Balance 2,700 April Purchases 9,200
Sales 12,900 Wages 3,100
Administration exp 1,300
Loan interest 800
Dr Capital Cr
April 30 Loss 1,500 April 1 Balance 83,700
Dr Bank loan Cr
Dr Sales Cr
April 30 Trading 12,900 April Bank 12,900
Dr Purchases Cr
April Bank 9,200 April 30 Trading 9,200
Dr Wages Cr
April Bank 3,100 April 30 Profit and loss 3,100
Dr Administration expenses Cr
April Bank 1,300 April 30 Profit and loss 1,300

Dr Loan interest Cr
April Bank 800 April 30 Profit and loss 800
Dr Trading Account for the month ended 30 April 2011 Cr

Gross profit 3,700
Dr Profit and Loss Account for the month ended 30 April 2011 Cr
Wages 3,100 Gross profit 3,700
Administration exp 1,300 Loss 1,500
Loan interest 800
g)
Dawn
Balance Sheet at 30 April 2011
$ $
Premises 105,000
122,200 122,200
a), d)
Dr Fittings Cr
Mar 1 Balance 21,200
24 Bank 1,300
Dr Vehicle Cr
Mar 1 Balance 16,400
Dr Receivables Cr
Mar 1 Balance 3,200 Mar 9 Bank 1,900
17 Sales 2,400
Dr Bank Cr
Mar 1 Balance 2,400 Mar 7 Rent 1,000
9 Receivables 1,900 10 Bank loan 500
30 Cash 700 18 Loan interest 400
21 Payables 1,000
22 Drawings 700
24 Fittings 1,300
Dr Cash Cr
Mar 1 Balance 500 Mar 11 Drawings 200
25 Sales` 1,400 28 Wages 800
30 Bank 700
Dr Capital Cr
Mar 31 Drawings 900 Mar 1 Balance 34,900
31 Profit 500
Dr Bank loan Cr
Mar 10 Bank 500 Mar 1 Balance 6,000

Dr Payables Cr
Mar 21 Bank 1,000 Mar 1 Balance 2,800
3 Purchases 1,300
Dr Drawings Cr
Mar 11 Cash 200 Mar 31 Capital 900
22 Bank 700
Dr Sales Cr
Mar 31 Trading 4,700 Mar 4 Cash 900
25 Cash 1,400
Dr Purchases Cr
Mar 3 Payables 1,300 Mar 31 Trading 1,300
Dr Rent Cr
Mar 7 Bank 1,000 Mar 31 Profit and loss 1,000
Dr Wages Cr
Mar 14 Cash 700 Mar 31 Profit and loss 1,500
28 Cash 800
Dr Loan interest Cr
Mar 18 Bank 400 Mar 31 Profit and loss 400
b)
Trial Balance at 31 March 2011
Dr Cr
$ $
Fittings 22,500
Vehicle 16,400
Receivables 3,700
Bank 100
Cash 400
Capital 34,900
Bank loan 5,500
Payables 3,100
Drawings 900
Sales 4,700
Purchases 1,300
Rent 1,000
Wages 1,500
Loan interest 400
48,200 48,200
c)
Dr Trading Account for the month ended 31 March 2011 Cr
Gross profit 3,400
Dr Profit and Loss Account for the month ended 31 March 2011 Cr
Rent 1,000 Gross profit 3,400
Wages 1,500
Loan interest 400
Profit 500

e)
Thomas
$ $
Fittings 22,500
Receivables 3,700 Bank loan 5,500
Bank 100 Payables 3,100
Cash 400
43,100 43,100
a), d)
Dr Premises Cr
Dr Equipment Cr
Sept 1 Balance 17,400 Sept 10 Bank 1,100
Dr Receivables Cr
Sept 1 Balance 300 Sept 7 Cash 200
17 Receivables 600
Dr Bank Cr
Sept 1 Balance 2,700 Sept 4 Payables 1,800
10 Equipment 1,100 5 Insurance 300
25 Purchases 900
Dr Cash Cr
Sept 1 Balance 600 Sept 13 Wages 1,400
7 Receivables 200 22 Insurance 100
18 Sales 2,800 28 Wages 1,000
Dr Capital Cr
Sept 30 Drawings 900 Sept 1 Balance 70,100
30 Profit 2,000
Dr Bank loan Cr
Dr Payables Cr
Sept 4 Bank 1,800 Sept 1 Balance 1,900
21 Purchases 2,300
Dr Drawings Cr
Sept 11 Bank 600 Sept 30 Capital 900
24 Cash 300
Dr Sales Cr
Sept 30 Trading 8,000 Sept 9 Cash 3,300
17 Receivables 600
18 Cash 2,800
30 Bank 1,300

Dr Purchases Cr
Sept 21 Payables 2,300 Sept 30 Trading 3,200
25 Bank 900
Dr Insurance Cr
Sept 5 Bank 300 Sept 30 Profit and loss 400
22 Cash 100
Dr Wages Cr
Sept 13 Cash 1,400 Sept 30 Profit and loss 2,400
28 Cash 1,000
b)
Trial Balance at 30 September 2011
Dr Cr
$ $
Premises 66,000
Equipment 16,300
Receivables 700
Bank 1,500
Cash 4,100
Capital 70,100
Bank loan 15,000
Payables 2,400
Drawings 900
Sales 8,000
Purchases 3,200
Insurance 400
Wages 2,400
95,500 95,500
c)
Dr Trading Account for the month ended 30 September 2011 Cr
Gross profit 4,800
Dr Profit and Loss Account for the month ended 30 September 2011 Cr
Insurance 400 Gross profit 4,800
Wages 2,400
Profit 2,000
e)
Maggie
Balance Sheet at 30 September 2011
$ $
Premises 66,000
Receivables 700 Bank loan 15,000
Cash 4,100
88,600 88,600

a), d)
Dr Administration expenses Cr
Dec 1 Balance 8,250 Dec 31 Profit and loss 8,690
17 Cash 440
Dr Bank Cr
Dec 1 Balance 3,190 Dec 2 Purchases 2,200
30 Cash 6,200 8 Rent 1,250
10 Bank loan 500
22 Payables 2,600
23 Fittings 970
Dr Bank loan Cr
Dec 10 Bank 500 Dec 1 Balance 8,000
Dr Capital Cr
Dec 31 Drawings 21,810 Dec 1 Balance 31,870
31 Profit 7,990
Dr Cash Cr
Dec 1 Balance 340 Dec 15 Wages 1,620
6 Receivables 330 17 Administration
20 Sales 3,130 expenses 440
29 Sales 2,440 28 Wages 1,880
30 Bank 6,200
Dr Drawings Cr
Dec 1 Balance 21,210 Dec 31 Capital 21,810
16 Cash 600
Dr Fittings Cr
Dec 1 Balance 8,920
23 Bank 970
Dr Loan interest Cr
Dec 1 Balance 640 Dec 31 Profit and loss 640
Dr Payables Cr
Dec 22 Bank 2,600 Dec 1 Balance 3,480
Dr Purchases Cr
Dec 1 Balance 83,470 Dec 31 Trading 85,670
2 Bank 2,200
Dr Receivables Cr
Dec 1 Balance 570 Dec 6 Cash 330
13 Sales 210
Dr Rent Cr
8 Bank 1,250

Dr Sales Cr
Dec 31 Trading 152,300 Dec 1 Balance 141,300
3 Cash 5,220
13 Receivables 210
20 Cash 3,130
29 Cash 2,440
Dr Vehicle Cr
Dec 1 Balance 13,500
Dr Wages Cr
15 Cash 1,620
28 Cash 1,880
b)
Dr Cr
$ $
Administration expenses 8,690
Bank 1,870
Bank loan 7,500
Capital 31,870
Cash 720
Drawings 21,810
Fittings 9,890
Loan interest 640
Payables 880
Purchases 85,670
Receivables 450
Rent 14,480
Sales 152,300
Vehicle 13,500
Wages 34,830
192,550 192,550
c)
Dr Trading Account for the year ended 31 December 2010 Cr
Gross profit 66,630
Dr Profit and Loss Account Cr

for the year ended 31 December 2010
Administration Gross profit 66,630
expenses 8,690
Loan interest 640
Rent 14,480
Wages 34,830
Profit 7,990

e)
Bill
$ $ $ $
NON-CURRENTASSETS CAPITAL 18,050
Vehicle 13,500
Fittings 9,890 NON-CURRENT LIABILITIES
23,390 Bank loan 7,500
CURRENT ASSETS
Receivables 450 CURRENT LIABILITIES
Bank 1,870 Payables 880
Cash 720
3,040
26,430 26,430

Chapter 7
Dr Cash Cr
Feb 1 Balance 450 Feb 8 Drawings 150
14 Sales 1,200 24 Wages 990
28 Balance c/d 510
1,650 1,650
Mar 1 Balance b/d 510
Dr Bank Cr
Oct 1 Balance 2,200 Oct 6 Payables 1,400
12 Cash 500 12 Insurance 300
17 Receivables 1,300 24 Drawings 400
31 Balance c/d 1,900
4,000 4,000
Nov 1 Balance b/d 1,900
Dr Bank loan Cr
May 10 Bank 600 May 1 Balance 8,000
31 Balance c/d 7,400
8,000 8,000
June 1 Balance b/d 7,400
Dr Payables Cr
31 Balance c/d 1,700 28 Purchases 1,400
4,600 4,600
Jan 1 Balance b/d 1,700
Dr Cash Cr
Aug 1 Balance 370 Aug 12 Purchases 120
14 Sales 130 28 Drawings 210
31 Balance c/d 170
500 500
Sept 1 Balance b/d 170
Dr Capital Cr
Aug 31 Drawings 11,900 Aug 1 Balance 39,400
31 Balance c/d 45,900 31 Profit 18,400
57,800 57,800
Sept 1 Balance b/d 45,900

Dr Premises Cr
Dr Receivables Cr
Aug 1 Balance 3,600 Aug 31 Balance c/d 5,300
26 Sales 1,700
5,300 5,300
Dr Payables Cr
Aug 31 Balance c/d 4,200 Aug 1 Balance 2,100
11 Purchases 800
25 Purchases 1,300
4,200 4,200
Dr Bank Cr
Jan 1 Balance 3,240 Jan 8 Rent 1,050
15 Cash 620 14 Drawings 450
28 Cash 290 29 Salaries 2,140
31 Balance c/d 510
4,150 4,150
Feb 1 Balance b/d 510
Dr Payables Cr
Jan 31 Balance c/d 6,190 Jan 1 Balance 4,150
16 Purchases 2,040
6,190 6,190
Feb 1 Balance b/d 6,190
Dr Capital Cr
Jan 31 Drawings 3,870 Jan 1 Balance 62,100
77,180 77,180
Dr Fittings Cr
Jan 1 Balance 14,900
Dr Equipment Cr
Jan 1 Balance 4,980 Jan 31 Balance c/d 8,050
18 Bank 3,070
8,050 8,050

Dr Purchases Cr
Oct 14 Bank 3,820 Oct 31 Trading 5,910
29 Payables 2,090
5,910 5,910
Dr Sales Cr
Oct 31 Trading 7,070 Oct 5 Cash 1,250
11 Bank 3,780
7,070 7,070
Dr Rent Cr
Oct 11 Bank 3,750 Oct 31 Profit and loss 3,750
Dr Drawings Cr
Oct 15 Bank 1,980 Oct 31 Capital 1,980
Dr Receivables Cr
Oct 1 Balance 4,240 Oct 29 Bank 6,280
25 Sales 2,040
6,280 6,280
Dr Trading Account for the month ended 31 October 2011 Cr

Gross profit 1,160
7,070 7,070
Dr Sales Cr
April 30 Trading 5,810 April 7 Bank 3,720
5,810 5,810
Dr Wages Cr
April 14 Cash 2,640 April 30 Profit and loss 4,910
28 Cash 2,270
4,910 4,910
Dr General expenses Cr
April 6 Bank 320 April 30 Profit and loss 410
18 Cash 90
410 410
Dr Insurance Cr
April 17 Bank 560 April 30 Profit and loss 560

Dr Payables Cr
April 29 Bank 3,770 April 1 Balance 1,040
17 Purchases 2,730
3,770 3,770
Dr Profit and Loss Account for the month ended 30 April 2011 Cr
Wages 4,910 Gross profit 12,880
General expenses 410
Insurance 560
Profit 7,000
12,880 12,880
Receivables
Date Details Dr Cr Balance
$ $ $
June 1 Balance 4,800 Dr
11 Sales 3,450 8,250 Dr
17 Bank 3,600 4,650 Dr
24 Sales 1,400 6,050 Dr
30 Bank 2,900 3,150 Dr
Payables
$ $ $
Aug 1 Balance 2,700 Cr
5 Purchases 7,400 10,100 Cr
11 Purchases 1,200 11,300 Cr
18 Bank 6,300 5,000 Cr
24 Bank 3,500 1,500 Cr
Cash
$ $ $
May 1 Balance 630 Dr
8 Office expenses 170 460 Dr
17 Drawings 80 380 Dr
22 Sales 1,050 1,430 Dr
22 Bank 1,200 230 Dr

Payables
$ $ $
May 1 Balance 1,820 Cr
17 Purchases 1,440 3,260 Cr
25 Bank 2,300 960 Cr
Bank
$ $ $
Sept 1 Balance 1,420 Dr
8 Rent 520 900 Dr
11 Drawings 200 700 Dr
11 Sales 1,600 2,300 Dr
18 Cash 750 3,050 Dr
27 Purchases 1,580 1,470 Dr
Bank loan
$ $ $
Sept 1 Balance 10,000 Cr
10 Bank 600 9,400 Cr
15 Bank 3,000 12,400 Cr
a), b), e), f)
Dr Bank Cr
Dec 1 Balance 2,040 Dec 5 Payables 5,840
8 Receivables 6,400 14 Purchases 1,290
18 Equipment 860
31 Balance c/d 450
8,440 8,440
Jan 1 Balance b/d 450
Dr Capital Cr
Dec 31 Drawings 17,780 Dec 1 Balance 124,650
152,340 152,340

Dr Cash Cr
Dec 1 Balance 310 Dec 23 Wages 1,450
31 Balance c/d 750
2,490 2,490
Jan 1 Balance b/d 750
Dr Drawings Cr
Dec 1 Balance 17,490 Dec 31 Capital 17,780
28 Cash 290
17,780 17,780
Dr Equipment Cr
Dec 1 Balance 12,200 Dec 31 Balance c/d 13,060
18 Bank 860
13,060 13,060
Dr General expenses Cr
Dr Insurance Cr
Dr Payables Cr
Dr Premises Cr
Dr Purchases Cr
Dec 1 Balance 142,300 Dec 31 Trading 143,590
14 Bank 1,290
143,590 143,590
Dr Receivables Cr
Dec 1 Balance 3,140 Dec 8 Bank 6,400
1 Sales 4,560 31 Balance c/d 1,300
7,700 7,700
Dr Sales Cr
Dec 31 Trading 245,300 Dec 1 Balance 238,560
1 Receivables 4,560
22 Cash 2,180
245,300 245,300

Dr Vehicle Cr
Dr Wages Cr
23 Cash 1,450
68,290 68,290
c)
Dr Cr
$ $
Bank 450
Capital 124,650
Cash 750
Drawings 17,780
Equipment 13,060
General expenses 2,080
Insurance 3,650
Payables –
Premises 88,000
Purchases 143,590
Receivables 1,300
Sales 245,300
Vehicle 31,000
Wages 68,290
369,950 369,950
d)
Dr Trading Account for the year ended 31 December 2010 Cr
Gross profit 101,710
245,300 245,300
Profit and Loss Account

Dr for the year ended 31 December 2010 Cr
General expenses 2,080 Gross profit 101,710
Insurance 3,650
Wages 68,290
Profit 27,690
101,710 101,710

g)
Mike
$ $ $ $
Premises 88,000
Vehicle 31,000
Equipment 13,060
132,060
CURRENT ASSETS
Receivables 1,300
Bank 450
Cash 750
2,500
134,560 134,560

Answers To Chapters 1to7

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Principles of Accounts for CSEC by David Austen Answers to Chapter 1

Total assets Capital Total liabilities

Assets = Capital + Liabilities

Business A 80,000 60,000 20,000

Total assets Capital Total liabilities

Business G 220,000 190,000 30,000

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 2

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 3

Balance Sheet at 2 March 2011

Balance Sheet at 3 March 2011

Balance Sheet at 4 March 2011

Balance Sheet at 5 March 2011

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 4

Balance Sheet at 6 March 2011

Balance Sheet at 2 January 2011

Balance Sheet at 3 January 2011

Balance Sheet at 4 January 2011

Balance Sheet at 5 January 2011

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 5

Balance Sheet at 6 January 2011

Total assets Capital Total liabilities

Starting figures 40,000 30,000 10,000

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 6

Total assets Capital Total liabilities

Starting figures 90,000 75,000 15,000

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 7

First account Second account affected

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 8

First account Second account affected

Some furniture was purchased by Furniture Increase Bank Decrease

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 9

Transaction Accounts affected Increase/decrease Debit/credit

Purchased some furniture by Furniture Increase Debit

Owner withdrew cash for Capital Decrease Debit

Transaction Accounts affected Increase/decrease Debit/credit

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 10

Account Explanation Account Explanation

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 11

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 12

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 13

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 14

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 15

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 16

Transaction Account to be Account to be

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 17

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 18

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 19

Trial Balance at 31 December 2010

Trial Balance at 31 January 2011

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 20

Trial Balance at 31 December 2010

Trial Balance at 31 March 2011

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 21

Trial Balance at 30 April 2011

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 22

ISBN 978-1-4085-0911-1 © Nelson Thornes 2011 23

Gross profit 8,800

Gross profit 10,700