Page 55 - F3 -FA Integrated Workbook STUDENT 2018-19

Recording transactions and balancing the ledgers

Recording transactions

1.1 Recording cash transactions

Cash transactions are those when payment is made or received
immediately. Whether the payment is made by notes and coin, debit or
credit card or cheque is irrelevant.

Example 1

Trade discount

Mylee entered into the following transactions:

1 Paid $10,000 capital into a business bank account to start a business

2 Paid $1,200 for rent of shop premises

3 Purchased goods for resale at a cost of $2,000

4 Sold goods which had cost $300 for $500

Required:

For each of the transactions, state the accounting entries required and
show how they would be recorded in ledger accounts.

Solution

Accounting entries

Debit $ Credit $

1 Cash 10,000 Capital 10,000
2 Rent 1,200 Cash 1,200
3 Purchases 2,000 Cash 2,000

4 Cash 500 Sales revenue 500

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