Page 44 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 2: Recording of Transactions

7. The following balances are extracted from the books of Mr. Rakesh as on 31.12.2010. Notes

Capital 15,000 Purchases 7 ,200
Land & Building 15,600 Provision for bad debts 370
Bank overdraft 2,500 Sales 17,000
Cash in hand 680 Wages 1250
Stock in Trade as on 1.1.04 6,000 Salaries 700
Advertisement 210 Insurance 40
Rent & Taxes 160 Discount allowed 300
Interest & Discount received 300 Repairs to building 210
Debtors 6420 Creditors 4,100
General Expenses 500

Prepare a trial balance.
8. Compose three columns Cash Book from the following transactions:

2009
Jan. 1 Cash in hand 567
Jan. 1 Cash at bank 12,675
Jan. 2 Received from Ashish and 7,900
Allowed him a discount 100
Jan. 4 Deposited into the bank 5,000
Jan. 6 Furniture purchased for cash 2,500
Jan. 7 Paid to Vikas by cheque 7,800
And received discount 200
Jan. 14 Received from Manish by cheque and Deposited into bank 5,000
Jan.16 Cash Sales 8,000
Jan. 20 Deposited into bank 6,000
Jan. 25 Purchased a Machine and paid by a cheque 12,000
Jan. 26 Paid by cheque to Kishore 1,370
and received discount 30
Jan. 27 Withdrew from bank for office use 2,500
Jan. 28 Purchased goods for cash 5,000
Jan. 29 Paid wages by cheque 4,500
Jan. 31 Paid Rent 500

Hint: Closing Balance of Cash 467, Closing Balance of Bank 105
9. What advantage do you see in the double entry system?
10. Explain the recording of cash and non-cash transactions.

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