Page 375 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Answers to questions

Example 4

ZAD had a favourable balance of $216 in its business bank account as at the
start of business on 1 May 20X8. The following is a list of bank transactions for
the week ending 7 May 20X8:

2 May Paid an insurance premium of $130 by cheque.
3 May Paid an invoice for $99 from GDS after deducting 10% for prompt
payment.
4 May Received a cheque for $314 from FRD, a credit customer. FRD was
settling an invoice for $320 and had been entitled to a $6 discount.
6 May Paid employees their week’s wages of $182 by cheque.

Required:

Record these transactions in the cash books of ZAD.

Example 4: Solution

Cash receipts book:

Bank Sales ledger Discounts
Date Details $ $ allow. $
4 May FRD 314 314 6
Cash payments book:

Bank Insurance Wages Purchase Discount
Date Details $ $ $ ledger $ rec $
2 May Insurance 130 130
3 May GDS 99 99 11
6 May Wages 182 182
–––– –––– –––– ––– –––
411 130 182 99 11

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