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 

 

104

 

 

1 

To test the accuracy of the double entry bookkeeping   

 

 

 

2 

True. See Section 1.4. 

3 

A 

PROFIT OR LOSS ACCOUNT 

 

 

$       

$     

Purchases 75,000 Sales  140,000

Gross profit c/d 

   65,000  

              

 

 140,000  

 140,000

Other expenses 

25,000 Gross profit b/d 

65,000

Profit for the year – to capital a/c 

 40,000  

            

 

 65,000  

 65,000

 

B is the gross profit figure, while C is the figure for purchases and D sales. 

4 

B 

When an expense account is balanced off, the balance is transferred to the profit or loss 

 

account. When a liability account is balanced off, the balance is carried forward to the next 

 accounting 

period. 

5 

The balance brought forward on the bank account is a credit figure. This means that the balance is