QUIZ 1
I. FILL IN THE BLANKS WITH SUITABLE WORDS
1. Accounting is a way of r……………, a…………. & s…………the t……… ....of an entity
2. Statements of Financial Position?
A list of all the assets c…………… and all the l…………. owed by a business at a
particular date. It also quantifies the amount of the o………….’ interest in the company:
e………
3. Statement of profit or loss
A statement displays items of i……………and e………… in a
r……………p…………as components of profit or loss for the period. The statement shows
whether the business has had more income than expense (p………..) or vice versa (a l……)
4. The key elements of financial statements:
a……………, l………………, e……………., i………….., e…………..
5. Accounting system has two branches: f……………….& m……………….accounting
II. ACCOUNTING CYCLE
Katherine Jones sets up a small agency that markets and distributes goods. She has
the following regular credit customers (Edwards, Erik) and credit suppliers (John, Patel).
She has the following transactions in the first week of July:
1, July: Invest ₤ 195,000 capital into the businesses
2, July: Buys some premises for ₤ 75,000 by cheque
Buys office equipment for ₤ 9,000 by cheque
Buys goods from John for ₤ 3,000 and from Patel for ₤ 1,000 both are on credit
Cash purchases of ₤ 7,000
3, July: Provide service to customer Edward on account ₤ 10,000
4, July: Sold all goods to customer Erik on account ₤ 16,000
5, July: Returns ₤ 500 goods unpaid to John as they were damaged
6, July: Pay bills for wages ₤ 4,000, electricity ₤ 2,000 and telephone ₤ 1,000
7, July: Settles half of the outstanding creditors and receives half of the money
outstanding from debtors
Required:
1. Making journal entries?
2. Post to T-accounts (Ledger accounts)
3. Balancing off the accounts
4. Trial balance after balancing off?