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

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

 

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SALES 

 

$    

 

$   

 

Cash at bank (F) 

10,000

 

Trade accounts receivable (G) 

  

2,500

 

 

 

TRADE ACCOUNTS RECEIVABLE 

 

$     

 

$   

Sales (G) 

 

2,500  Cash at bank (I) 

  

2,500

 

 

BANK LOAN INTEREST 

 

$ 

 

$ 

Cash at bank (J) 

100 

 

 

OTHER EXPENSES 

 

$     

 

$ 

Cash at bank (K) 

 1,900 

 

 

DRAWINGS ACCOUNT 

 

$     

 

$ 

Cash at bank (L) 

 1,500 

 

 

(a) 

If you want to make sure that this solution is complete, you should go through the transactions A 

to L and tick off each of them twice in the ledger accounts, once as a debit and once as a credit. 

When you have finished, all transactions in the T-account should be ticked. 

(b) 

In fact, there is an easier way to check that the solution to this sort of problem does 'balance' 

properly, which we will meet in the next chapter. 

(c) 

On asset and liability accounts, the debit or credit balance represents the amount of the asset or 

liability outstanding at the period end. For example, on the cash at bank account, debits exceed 

credits by $6,500 and so there is a debit balance of cash in hand of $6,500. On the capital 

account, there is a credit balance of $7,000 and so the business owes Ron $7,000. 

(d) 

The balances on the revenue and expense accounts represent the total of each revenue or 

expense for the period. For example, sales for the period total $12,500.