I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

87 

1  

 

$ 

$ 

 DEBIT  Cash 

a/c 

50 

 

CREDIT 

Sales a/c 

 

 

 

 

 

 

 

 

 

      50 

2 

B 

DEBIT receivables $50, CREDIT sales $50 

3 True 

 

4 A 

credit will increase a liability and decrease an asset, whereas a debit will decrease a liability and 

increase an asset. 

5 

Most commonly to correct an error, although it can be used to make any entry that is not recorded in a 

book of prime entry (eg prepayments, accrued expenses, depreciation). 

6 

Individual customer accounts are kept in the receivables ledger.  

 

 

 

 

 

Now try ... 

 

Attempt the questions below from the Practice Question Bank 

 

Qs 16 – 19  

 

 

 

 

 

 

 

ANSWERS TO QUICK QUIZ 

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PART C: THE USE OF DOUBLE-ENTRY AND ACCOUNTING SYSTEMS 

 

88

 

 

 

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89 

C H A P T E R 

 

 

TOPIC LIST 

SYLLABUS 

REFERENCE 

1  The trial balance 

C2(d), E1(a)–(d)

2  The statement of profit or loss 

A3(a)

3  The statement of financial position 

A3(a)

4  Balancing accounts and preparing financial statements 

C2(d), A3(a)

 

 

 

 

 

 

 

From trial balance to 

financial statements

In the previous chapter you learned the principles of double entry 

and how to post to the ledger accounts. The next step in our 

progress towards the financial statements is the trial balance. 

Before transferring the relevant balances at the end of the period 

to the statement of profit or loss and putting closing balances 

carried forward into the statement of financial position, it is usual 

to test the accuracy of double entry bookkeeping records by 

preparing a list of account balances. This is done by taking all 

the balances on every account; because of the self-balancing 

nature of the system of double entry, the total of the debit 

balances will be exactly equal to the total of the credit 

balances. 

In very straightforward circumstances, where no complications 

arise and where the records are complete, it is possible to prepare 

accounts directly from a trial balance.  

 

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