Cambridge IGCSE and O Level Accounting
Workbook answers
Section 1 (Chapters 1–5 of the Coursebook)
Multiple choice questions
1
D
9
2
B
10 C
3
C
11 C
4
D
12 D
5
C
13 B
6
A
14 D
7
B
15 C
8
C
D
Structured questions
1
2
Book-keeping is the detailed recording of all the financial transactions of a business. Accounting
uses the book-keeping records to prepare financial statements at regular intervals.
a Assets = Capital + Liabilities.
b i
3
4
35 000
ii
iii 23 000
192 000
b asset
c asset
d liability
e asset
f
g asset
asset
b assets − machinery increase
iv 72 000
liabilities − trade payables increase
c assets − bank decrease
1
liabilities − trade payables decrease
d assets − other receivables increase
assets − cash decrease
e assets − bank increase
liabilities − loans increase
5
Mary
Statement of financial position at 2 January 20–9
Assets
Premises
$
Liabilities
100 000 Capital (158 000 + 10 000)
$
168 000
Fixtures (30 000 + 1 000)
31 000 Trade payables (12 000 + 1 500 + 1 000) 14 500
Inventory (18 000 + 1 500)
19 500
Trade receivables (13 000 – 500)
12 500
Bank (9 000 + 500 + 10 000)
19 500
182 500
© Cambridge University Press 2018
182 500
Cambridge IGCSE and O Level Accounting
6
Kumar
Statement of financial position at 2 August 20–8
Assets
$
Liabilities
$
Machinery
55 000 Capital
80 000
Equipment
18 000 Loan (20 000 + 10 000)
30 000
Motor vehicles (15 000 + 10 000)
25 000 Trade payables (9 200 – 2 100)
Inventory (9 500 + 1 500)
11 000
Trade receivables (6 500 – 100)
6 400
Bank (5 200 – 2 100 – 1 500)
1 600
7 100
100
Cash
117 100
7
117 100
a Provide information about the assets and liabilities of the business
Provide details about the amounts owed by trade receivables and owed to trade payables
Provide details of the payments and receipts
Provide information to enable financial statements to be prepared
Ensures that no transaction is overlooked
b Enable profit or loss for the period to be calculated
Provide information for comparison with previous periods and other businesses
Assist with decision-making
Assist with monitoring the progress of a business
8
a debit rent
credit bank
b debit inventory
credit cash
c debit carriage inwards
credit cash
d debit equipment
credit WR Stores
e debit Jones
credit sales
f
credit Jones
debit sales returns
g debit drawings
2
credit purchases
9
Raminder
Cash account
Date
Details
Fo.
$
20–9
Date
Details
Fo.
$
20–9
Mar 1
Balance
b/d
31 Sales
100
840
995
940
20–9
Apl 1
Balance
© Cambridge University Press 2018
b/d
718
Mar 9
Office expenses
22
14 Drawings
Balance
200
c/d
718
940
Cambridge IGCSE and O Level Accounting
Bank account
Date
Details
Fo.
$
Date
20–9
Details
Fo.
$
20–9
Mar 1
4
Balance
b/d 2 750 Mar 18 Equipment
Wahid
13 AB Loans
280
28 Sabena
5 000
31 Balance
4 500
330
c/d
3 350
150
24 Commission receivable
8 180
8 180
20–9
Apl 1
Balance
b/d 3 350
10
Mona
Bank account
Date
Details
Fo.
$
20–4
Jan 1
Date
Details
Fo.
$
20–4
Capital 20 000 Jan 1 Rent
500
12 Aswan Traders
1 000
10 Mohamed
3 000
14 Balance
c/d 17 500
21 000 21 000
20–4
Jan 15
Balance
3
b/d 17 500
Capital account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–4
Jan 1
Bank
20 000
Rent account
Date
Details
Fo.
$
Date
Details
Fo.
$
Details
Fo.
$
20–2
Jan 1
Bank
500
Purchases account
Date
Details
Fo.
$
20–2
Jan 2
Mohamed
© Cambridge University Press 2018
3 300
Date
Cambridge IGCSE and O Level Accounting
Mohamed account
Date
Details
Fo.
$
20–4
Jan 4
Date
Details
Fo.
$
20–4
Purchases returns
10 Bank
14 Balance
100 Jan 2
Purchases
3 300
3 000
c/d
200 3 300 3 300
20–4
Jan 15
Balance
b/d
200
Fo.
$
Purchases returns account
Date
Details
Fo.
$
Date
Details
20–4
Jan 4
Mohamed
100
Details
$
Sales account
Date
Details
Fo.
$
Date
Fo.
20–4
Jan 7
Aswan Traders
1 700
14 Cash
1 500
Aswan Traders account
Date
Details
Fo.
$
20–4
Jan 7
Date
Details
Fo.
$
20–4
Sales
1 700 Jan 12 Bank
14 Balance
1 000
c/d
700
1 700 1 700
20–4
Jan 15 Balance
b/d
700
Commission receivable account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–4
Jan 9
© Cambridge University Press 2018
Cash
120
4
Cambridge IGCSE and O Level Accounting
Cash account
Date
Details
Fo.
$
Date
20–4
Jan 9
Details
Fo.
$
20–4
Commission receivable
120 Jan 13 Office expenses
14 Sales
1 500
20
14 Drawings
Balance
500
c/d
1 100
1 620 1 620
20–4
Jan 15 Balance
b/d 1 100
Office expenses account
Date
Details
Fo.
$
Date
Details
Fo.
$
Details
Fo.
$
20–2
Jan 13 Cash
20
Drawings account
Date
Details
Fo.
$
Date
20–2
Jan 14
Cash
11 a
500
5
Thomas
Sanele account
Date
Details
Fo.
Debit
$
Credit
$
Balance
$
20–1
June 1
Balance
June 6
Sales
450
450 dr
1 200
1 650 dr
June 10 Sales returns
June 14 Cash
June 20 Sales
1 600 dr
250
1 350 dr
590
June 26 Bank
b The balance of the account is shown after every transaction.
© Cambridge University Press 2018
50
1 940 dr
1 000
940 dr
Cambridge IGCSE and O Level Accounting
12
Jason
Bank account
Date
Details
Fo.
$
20–5
Apl 1
Date
Details
Fo.
$
20–5
Capital
39 000 Apl 2
27 Paul
1 340
28 ABC Finance Loan
10 000
Premises
25 000
24 Lynne
8 000
30 Balance
c/d 17 340
50 340 50 340
20–5
May 1
Balance
b/d 17 340
Cash account
Date
Details
Fo.
$
20–5
Date
Details
Fo.
$
20–5
Apl 1
Capital
Apl 9
Sales
1 000 Apl 6
320
Operating expenses
250
12 Carriage outwards
10
30 Wages
Balance
c/d
200
860
1 320 1 320
20–5
May 1
6
Balance
b/d
860
Capital account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–5
Apl 1
Bank
39 000
1
Cash
1 000
Premises account
Date
Details
Fo.
$
Date
Details
Fo.
$
Details
Fo.
$
20–5
Apl 1
Bank
25 000
Purchases account
Date
Details
Fo.
20–5
Apl 4
$
Date
20–5
Lynne
© Cambridge University Press 2018
9 500 Apl 20 Drawings
100
Cambridge IGCSE and O Level Accounting
Lynne account
Date
Details
Fo.
$
Date
20–5
Details
Fo.
$
20–5
Apl 24 Bank
30 Balance
8 000 Apl 4
Purchases
9 500
c/d 1 500 9 500 9 500
20–5
May 1
Balance
b/d 1 500
Operating expenses account
Date
Details
Fo.
$
Date
Details
Fo.
$
Details
Fo.
$
20–5
Apl 6
Cash
250
Sales account
Date
Details
Fo.
$
Date
20–5
Apl 9
Cash
12 Paul
320
1 460
Paul account
Date
Details
Fo.
$
Date
20–5
Details
Fo.
$
20–5
Apl 12 Sales
1 460 Apl 15 Sales returns
120
27 Bank
1 340
1 460 1 460
Carriage outwards account
Date
Details
Fo.
$
Date
Details
Fo.
$
Fo.
$
20–5
Apl 12 Cash
10
Sales returns account
Date
Details
Fo.
$
20–5
Apl 15 Paul
© Cambridge University Press 2018
120
Date
Details
7
Cambridge IGCSE and O Level Accounting
Drawings account
Date
Details
Fo.
$
Date
Details
Fo.
$
Fo.
$
20–5
Apl 20 Purchases
100
ABC Finance Loan account
Date
Details
Fo.
$
Date
Details
20–5
Apl 28 Bank
10 000
Wages account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–5
Apl 30 Cash
200
13 a Mar 1 Amount owed by Anwar to Akinola
Double entry: credit Anwar account for February
Mar 9 Akinola sold goods on credit to Anwar
Double entry: credit sales account
Mar 12 Anwar returned goods to Akinola
Double entry: debit sales returns account
Mar 18 Anwar paid Akinola by cheque
Double entry: debit bank account
Mar 31 Amount owed by Anwar to Akinola
Double entry: debit Anwar account for April
b Mar 10 Akinola withdrew from business bank for personal use
Double entry: credit bank account
Mar 28 Akinola withdrew goods from business for personal use
Double entry: credit purchases account
Mar 31 Total drawings for the month transferred to capital account
Double entry: debit capital account
14 a To check the arithmetical accuracy of the double entry book-keeping.
To assist in the preparation of financial statements.
b Two from:
Error of commission A transaction is entered using the correct amount and on the
correct side abut in the wrong account of the same class
Error of complete reversal
he correct amount is entered in the correct accounts but the
T
entry has been made on the wrong side of each account
Error of omission A transaction is completely omitted from the accounting
records
Error of original entry An incorrect figures is used when the transaction is first
entered in the accounting records so the double entry used the
incorrect figure
© Cambridge University Press 2018
8
Cambridge IGCSE and O Level Accounting
Error of principle A transaction is entered using the correct amount and on the
correct side but in the wrong class of account
Compensating errors These occur when two or more errors cancel each other out
c Error 1 is an error of original entry so will not affect the balancing of the trial balance.
Error 2 will affect the balancing of the trial balance as only one entry (to sales) has been
made rather than a double entry.
Error 3 is an error of omission when a transaction was completely omitted so will not affect
the balancing of the trial balance.
15
Peter
Trial balance at 31 October 20–2
Debit
Credit
$
$
600
Cash
Bank overdraft
10 500
18 200
Equipment
6 100
Fixtures and fittings
12 400
Trade receivables
13 600
Trade payables
Purchases
48 600
Sales
66 200
Sales returns
3 300
Wages
9
21 400
Office expenses
4 700
Carriage inwards
900
Operating expenses
4 000
Drawings
12 500
Capital
16
9 50 95
42 400
132 700
132 700
Maria
Amended trial balance at 31 December 20–4
Debit
Credit
$
$
Premises
60 000
Fixtures and fittings
13 500
Inventory 1 January 20–4
Trade receivables
9 500
14 200
Trade payables
Cash at bank
9 800
2 300
Loan from XY Finance
Purchases
5 000
36 100
Sales
Sales returns
© Cambridge University Press 2018
45 900
1 400
Cambridge IGCSE and O Level Accounting
Rent and rates
4 700
Wages
12 300
Operating expenses
2 500
Carriage outwards
2 600
Capital
98 400
159 100
159 100
17 a
Error 1 will cause the debit side of the trial balance to be $4 100 less than the credit side as
the drawings ledger balance has been omitted completely.
Error 2 will not affect the trial balance as it is an error of commission. The total debits will
still equal the total credits.
Error 3 will cause the debit side of the trial balance to be $2 000 less than the credit side. In
each case the debit side of an account has been under-cast.
Error 4 will not affect the trial balance as it is an error of omission. The total debits will still
equal the total credits.
b
John
Amended trial balance at 30 November 20–8
Debit
$
Purchases (174 900 + 1 000)
Credit
$
175 900
Sales
246 500
Carriage inwards
5 650
Carriage outwards
4 210
Bank overdraft (14 500 + 2 150)
16 650
Operating expenses (3 600 + 2 150)
5 750
Equipment
5 700
Motor vehicles
10
10 400
Salaries (62 590 + 1 000)
63 590
Trade receivables
21 610
Trade payables
16 440
Rent and rates
7 990
Insurance
3 200
Inventory 1 December 20–7
14 850
Loan to employee
1 000
Drawings
4 100
Capital
44 360
323 950
323 950
18 a One from:
•
makes it more convenient to use as the same types of account are kept together
•
the task of maintaining the ledger can be divided between several people
•
checking procedures can be introduced
•
may reduce the possibility of fraud.
b ii
v
nominal ledger
iii nominal ledger
purchases ledger
vi nominal ledger
© Cambridge University Press 2018
iv sales ledger
Cambridge IGCSE and O Level Accounting
19 a
Anjori
Cash Book
Date
Details
Fo.
Cash
Bank
$
$
Date
20–9
Fo.
Cash
Bank
$
$
20–9
May 1
Balance
9
C Wright
12
Sales
19
Cash
31
Balance
200
b/d
4 960 May 4
Western Stores
1 310 15
Carriage outwards
950
19
c
c/d
1 150
2 120
Bank
40
c
900
900 11
Drawings
500
2 370 26
Insurance
1 420
30
Motor vehicle
5 500
31
Balance
c/d
9540
210
1 150
20–9
Jun 1
Details
9540
20–9
Balance
210
b/d
Jun 1
Balance
b/d
2 370
b A contra entry is an item appearing on both sides of the cash book. They occur when cash is paid
into the business bank account and when cash is withdrawn from the bank for business use.
c It is not possible to take out more cash than is available so the cash balance can never be
brought down as a credit balance. It can only be either a debit balance or a nil balance.
d The cash balance is an asset and the bank balance is a liability.
11
20 a
Vikram
Cash Book
Date
Details
Fo Discount Cash Bank Date
allowed
$
$
Details
Fo Discount Cash Bank
received
$
20–3
$
$
20–3
Nov 1
Balance
7
High Street
Stores
135
b/d
30 Balance
8
c
b/d
50
192 20 Marine
Traders
1 000
c/d
3 150
High Street
Stores
(dis. chq)
1 670
26 Valley
Stores
29 Bank
Nov 1 Balance
50
17 Sales
23 Seafresh
Foods
24
936
15
735
3 959 29 Cash
1 000
30 Wages
Balance
8
1 135
20–3
Dec 1
$
860
c/d
5 871
275
39
1 135
5 871
20–3
Balance
© Cambridge University Press 2018
b/d
275
Dec 1 Balance
b/d
3 959
Cambridge IGCSE and O Level Accounting
b To encourage customers to pay their accounts promptly.
c 24/(936 + 24) × 100 = 21/2%
d Valley Stores account credit side ‘Discount allowed 8’
e The total of the discount allowed column is transferred to the debit side of the discount
allowed account and the total of the discount received column is transferred to the credit
side of the discount received account.
21 a–c
Sara
Cash Book
Date Details
Fo Discount
allowed
$
Cash
Bank
$
$
Date
3
Fo Discount
received
$
20–7
Jul 1
Details
Bank
$
$
20–7
Capital
20 000 Jul 3
Cash
5
Rent
200
Bank
10 HiFinance
Loan
c
200
6 000 13 Motor
vehicle
31 Honey
Farm
50
350
1 950 17 Motor
expenses
150
22 Beeline & Co
45
31 Balance
20–7
50
Aug 1 Balance
b/d
200
27 950
30
20 045
20
c/d
30 20 045
45
200 27 950
Sara
Sales Ledger
Honey Farm account
Details
Fo.
$
20–7
Jul 20 Sales
Date
Details
Jul 25 Sales returns
31 Bank
Discount
2100
© Cambridge University Press 2018
Fo.
$
20–7
2 100
5 900
1 455
29 Carriage
inwards
Date
Cash
100
1 950
50
2100
12
Cambridge IGCSE and O Level Accounting
Purchases Ledger
BeeLine & Co account
Date
Details
Fo.
$
Date
20–7
Details
Fo
$
20–7
1 455
Jul 22 Bank
Discount
31 Balance
45
c/d
Jul 7
Purchases
1500
28 Purchases
930
930
2 430
2 430
20–7
Aug 1 Balance
b/d
930
Fo.
$
Nominal Ledger
Capital account
Date
Details
Fo.
$
Date
Details
20–7
Jul 1
20 000
Bank
Rent account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
Jul 5
350
Bank
Purchases account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
Jul 7
BeeLine & Co
1 500
28
BeeLine & Co
930
HiFinance Loan account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
Jul 10 Bank
6 000
Motor vehicles account
Date
Details
Fo.
$
20–7
Jul 13 Bank
© Cambridge University Press 2018
5 900
Date
Details
Fo. $
13
Cambridge IGCSE and O Level Accounting
Motor expenses account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
150
Jul 17 Cash
Sales account
Date
Details
Fo. $
Date
Details
Fo.
$
20–7
2 100
Jul 20 Honey Farm
Sales returns account
Date
Details
Fo.
$
Date
Details
Fo.
$
Fo.
$
20–7
100
Jul 25 Honey Farm
Carriage inwards account
Date
Details
Fo.
$
Date
Details
20–7
20
Jul 28 Cash
14
Discount allowed account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
50
Jul 31 Total for month
Discount received account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–7
Jul 31 Total for month
© Cambridge University Press 2018
45
Cambridge IGCSE and O Level Accounting
d
Sara
Trial balance at 31 July 20–7
Debit
Credit
$
$
Cash
30
Bank
20 045
BeeLine & Co
930
Capital
Rent
Purchases
20 000
350
2 430
HiFinance Loan
Motor vehicles
Motor expenses
6 000
5 900
150
Sales
Sales returns
2 100
100
Carriage inwards
20
Discount allowed
50
Discount received
45
29 075
29 075
e Advantages:
•
payments made automatically so there is no need for Sara to take action
•
reduced administration costs (no need to write and forward monthly cheque)
•
Sara will not get behind with the payment.
Disadvantages:
•
Sara would lose control of payments schedule
•
payments automatically on set dates so cannot adjust day according to cash position.
Plus any other suitable comments.
Recommendation – on balance should agree to pay by direct debit.
© Cambridge University Press 2018
15
Cambridge IGCSE and O Level Accounting
22 a–b
Mirza
Cash Book
Date
Details
Fo
Discount
allowed
Cash
Bank
$
$
$
Date Details
Fo Discount
received
$
20–2
Cash Bank
$
$
20–2
Nov 1 Balance
400
b/d
10 Commission
receivable
5 900 Nov 17 Machine
repairs
2 10
570
20 Square
Tiles Co
46
2 254
28 Redfern
Traders
500
(dis.chq.)
18 Redfern
Traders
22 Southern
Traders
10
340 30 Bank
25 Sales
1 620
30 Cash
c
Balance
500
c
1 730
c/d
500 5 146
1730
10
2 230
8 470
500
5146
46
2 230 8 470
20–2
Dec 1 Balance
b/d
16
Mirza
Sales Ledger
Redfern Traders account
Date
Details
Fo.
$
20–2
Date
Details
Fo.
$
20–2
Nov 1
Balance
b/d
28 Bank (dis. chq)
500
Nov 18 Bank
500
1000
30 Balance
500
c/d
500
1000
Fo.
$
20–2
Dec 1
Balance
b/d
500
Southern Traders account
Date
Details
Fo.
$
20–2
Nov 3
Date
Details
20–2
Sales
350
Nov 22 Bank
Discount
350
© Cambridge University Press 2018
340
10
350
Cambridge IGCSE and O Level Accounting
Purchases Ledger
Square Tiles Co account
Date
Details
Fo.
$
20–2
Date
Details
Fo.
$
b/d
2 300
20–2
230
Nov 15 Purchases returns
20 Bank
2 254
Discount
30 Balance
Nov 1 Balance
7 Purchases
1 600
46
c/d
1 370
3 900
3 900
20–2
b/d
1370
Details
Fo.
$
Balance
b/d
44 000
Details
Fo.
$
Details
Fo.
$
Details
Fo.
$
Details
Fo.
$
Dec 1 Balance
Nominal Ledger
Capital account
Date
Details
Fo.
$
Date
20–2
Nov 1
Machinery account
Date
Details
Fo.
$
Balance
b/d
30 000
Date
20–2
Nov 1
Inventory account
Date
Details
Fo.
$
Balance
b/d
3 500
Date
20–2
Nov 1
Fixtures and fittings account
Date
Details
Fo.
$
Balance
b/d
6 000
Date
20–2
Nov 1
Sales account
Date
Details
Fo.
$
Date
20–2
Nov 3
Southern Traders
25 Cash
© Cambridge University Press 2018
350
1 620
17
Cambridge IGCSE and O Level Accounting
Purchases account
Date
Details
Fo.
$
Date
Details
Fo.
$
Fo.
$
20–2
Nov 7
1 600
Square Tiles Co
Commission receivable account
Date
Details
Fo.
$
Date
Details
20–2
210
Nov 10 Cash
Purchases returns account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–2
230
Nov 15 Square Tiles Co
Machine repairs account
Date
Details
Fo.
$
Date
Details
Fo.
$
20–2
18
570
Nov 17 Bank
Discount allowed account
Date
Details
Fo.
$
Date
Details
Fo.
$
Fo.
$
20–2
10
Nov 30 Total for month
Discount received account
Date
Details
Fo.
$
Date
Details
20–2
Nov 30 Total for month
© Cambridge University Press 2018
46
Cambridge IGCSE and O Level Accounting
c
Mirza
Trial balance at 30 November 20–2
Debit
Credit
$
$
Cash
500
Bank
5 146
Redfern Traders
500
Square Tiles Co
1370
Capital
44 000
Machinery
30 000
Inventory
3 500
Fixtures and fittings
6 000
Sales
Purchases
1 970
1 600
Commission receivable
210
Purchases returns
230
Machine repairs
570
Discount allowed
10
Discount received
47 826
46
47 826
23 a
The imprest system of petty cash is when the petty cashier starts each period with a fixed
amount of money (the imprest). At the end of the period the chief cashier provides the petty
cashier with enough cash to restore the balance to the imprest amount.
b One from:
•
the chief cashier is aware of exactly how much petty cash has been spent each period
•
the petty cash expenditure can be controlled
•
the amount of the imprest can be adjusted as necessary if it is too much or not enough
•
the imprest system can also help to reduce fraud.
© Cambridge University Press 2018
19
c
Bank
Details
© Cambridge University Press 2018
Mar 1
20–9
Bank
Balance
21 Postage refund
Feb 1
20–9
Date
b/d
Fo
109
91
202
2
200
$
Total
Received
Refreshments
9
11
19
16 Office expenses
26 High Street Trading Co
28 Balance
5
14 Parcel postage
202
91
111
30
12 Central Stores
21
10
Postage stamps
$
$
26
11
15
Office
expenses
Total
paid
4
c/d
Vo
15
Details
Office expenses
Feb 3
20–9
Date
Petty Cash Book
Eniola
15
5
10
$
Postages
21
21
$
Refreshments
49
19
30
$
Ledger
accounts
Cambridge IGCSE and O Level Accounting
20
© Cambridge University Press 2018
Oct 8
20–1
Oct 1
20–1
Date
24 a
Cash
Balance
87
13
100
79
Cash
$
Total
Received
21
b/d
Fo
Balance
Details
Ali
5
Balance
13
100
30
23
10
87
Zafar
7
12
30
30
Cleaner's wages
6
Cleaning
8
8
20
3
$
Postages
&
stationery
Taxi fare
12
20
4
4
Postages stamps
$
$
4
Travel
Total paid
3
c/d
Vo
Envelopes
Bus fares
Details
3
Oct 2
20–1
Date
Petty Cash Book
Rashid
10
22
12
$
Ledger
accounts
Cambridge IGCSE and O Level Accounting
21
Cambridge IGCSE and O Level Accounting
b
Rashid
Nominal ledger
Travel account
Date
Details
Fo.
$
Date
Details
Fo.
$
Details
Fo.
$
Details
Fo.
$
Details
Fo.
$
Details
Fo.
$
20–1
Oct 7
12
Petty cash
Postages & stationery account
Date
Details
Fo.
$
Date
20–1
Oct 7
23
Petty cash
Cleaning account
Date
Details
Fo.
$
Date
20–1
Oct 7
30
Petty cash
Purchases ledger
Ali account
Date
Details
Fo.
$
Date
20–1
Oct 7
12
Petty cash
Zafar account
Date
Details
Fo.
$
20–1
Oct
Petty cash
c Credit cash column in cash book
d Current asset 13
© Cambridge University Press 2018
10
Date
22
25 a
© Cambridge University Press 2018
Jul 31
20–6
Jul 25
20–6
Date
Bank
Balance
Balance
Details
b/d
Fo
52
8
60
60
$
Total
Received
8
60
13
52
Southlands & Co
Balance
12
9
Copy paper
Train fare
8
General expenses
30
$
$
18
8
10
General
expenses
Total paid
10
c/d
Vo
General expenses
Details
Jul 27
20–6
Date
Petty Cash Book
Kate
9
9
$
12
12
$
Travel
Postages &
expenses stationery
13
13
$
Ledger
accounts
Cambridge IGCSE and O Level Accounting
23
Cambridge IGCSE and O Level Accounting
b
Kate
Cash Book
Date
Details
Fo. Discount
allowed
Bank
$
Date
Details
Fo. Discount
received
$
20–6
$
Bank
$
20–6
30
Jul 26 North Star Co
1 170
Western Traders
31 Balance
25
c/d
1 602
Jul 25 Balance
b/d
750
28 Motor expenses
59
29 Orientals
Fashions
39
30 Western Traders
(dis. chq)
25
31 Petty cash
30
1 911
39
2 797
52
2 797
20–6
Aug 1 Balance
b/d
1 602
26 Advantages:
•
allows chief cashier to concentrate on more important issues
•
can allow petty cash spending to be controlled
•
provides training for junior members of staff
•
reduces the number of entries in the ledger and the cash book.
Disadvantage:
•
chief cashier will have to supervise the junior.
Plus any other suitable comments.
Recommendation – when there are large numbers of petty cash transactions, the advantages
outweigh the disadvantages so recommend starting to maintain a petty cash book.
© Cambridge University Press 2018
24