2020 SACSS 3N POA EOY P1 Q2
2
REQUIRED
a. Explain what ‘double entry’ means.
[1]
b. State the double entries for the following transactions.
[6]
c. Analyse the effects of the following transactions on the assets, liabilities and equity. State the account affected and the amount involved clearly with a ‘+’ sign for increase and a ‘-‘ sign for a decrease. Write ‘no effect’ for the accounting element(s) not affected by the transaction.
[6]
The first transaction has been completed as an example for you.
Effect on | ||||
Eg | Bought goods on credit $10 000 | Inventory + $10 000 | Trade payables + $10 000 | No Effect |
(i) | Owner Qian took goods for her personal use $150. |
| ||
(ii) | Paid supplier $2000 by cheque. |
| ||
(iii) | Banked in cash $3000. |
| ||
[TOTAL 13]
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Double entry means that every transaction is recorded in two accounts – with one amount on the debit side of one account and the same amount on the credit side of another account.
Effect on | ||||
Eg | Bought goods on credit $10 000 | +$10 000 | Trade payable + $10 000 | No Effect |
(i) | Owner Qian took goods for her personal use $150. | -$150 √ | No Effect | -$150 √ |
(ii) | Paid supplier $2000 by cheque. | Cash at bank -$2000 √ | Trade payables -$2000 √ | No Effect |
(ii) | Banked in cash $3000 | Cash in hand -$3000 √ Cash at bank +$3000 √ | No Effect | No Effect |