MYOB & Accounting 5
SJCC
2014
Theory

Each of the items you have listed in the Balance Sheet and Profit & Loss Statement (Income
Statement) over the past fortnight is called an ACCOUNT.

Each account has either a debit or credit 'nature'. In some forms of displaying the accounts the
left side is the debit and the right the credit.

Asset and Expense accounts have a debit nature

Liability, Income & Owners Equity accounts have a credit nature

Every transaction affects TWO accounts

The nature is to increase and decreasing causes the opposite to happen

Look at the table below:
Date
Transaction
Accounts
affected
Type of Account
Nature of
Account
Increase/
Decrease
Jan-1
Owner invested
$10000 in the
business
Cash
Asset
DR
Increase
DR
10000
Capital
(Owners
Equity)
Owner's Equity
CR
Increase
CR
10000
Motor
Vehicle
Asset
DR
Increase
DR
5000
Cash
Asset
DR
Decrease
CR
2000
Loan
Liability
CR
Increase
CR
3000
Jan-2
Purchased motor
vehicle worth $5000
with $2000 cash and
a $3000 bank loan
DR/CR Amount
For each of the following exercises – fill in the tables as above. When you have done so then Exercise
3 is to place all the information from the two tables into a General Journal. Accounts → Record
Journal Entry → General. When you finish go to REPORTS and look at the General Journal (down
the bottom of the list). This will give you basic idea of debits and credits and balancing for each
transaction.
MYOB & Accounting 5
SJCC
2014
Exercise 1 – complete the following for Jamie – owner of an art gallery (try to aim for 10 minutes
maximum)
Date
Transaction
Feb-1
Jaimie invested $30000
into the business
Feb-2
Paid $150000 to
purchase building
Feb-8 Purchased $1700 of stock
(on credit)
Feb-13
Paid $900 off Accounts
Payable
Feb-16
Purchased land work
$180000 with a bank
loan
Feb-19
Paid $3400 in salaries
and $280 for electricity
Feb-24
Jamie withdrew $200
cash
Accounts
affected
Type of
Account
Nature of
Account
Increase/
Decrease
DR/CR Amount
MYOB & Accounting 5
SJCC
Exercise 2 – complete the following for Melissa – try to aim for 15 minutes
Date
Transaction
Mar1
Owner invested
$100000 into the
business
Mar5
Paid rent for the
store $5000
Accounts
affected
Type of
Account
Nature of Increase/ DR/CR Amount
Account Decrease
Mar- Purchased $23000
8
stock on credit
Mar- Purchased Furniture
12
& Fittings for the
store $37000
Mar- Collected Rental fee
15
Income for the
week $6070 cash
MarPaid $1000 to
22 Accounts Payable
Mar- Collected Rental
22 Fee Income for the
week $13500 cash
Mar25
Owner withdrew
$500 from the
business
Mar- Paid $1600 wages
27
Create a General Journal to reflect the above in MYOB
2014