Osborne Books Tutor Zone

BookkeepingControls

Answers to practice assessment 2

© Osborne Books Limited, 2016

2 b o o k k e e p i n g c o n t r o l s t u t o r z o n e

Task 1(a)

Variable monthly bill for broadband and telephone services

Payment of a credit supplier’s account due in one day

Purchase of computer equipment online in a one-day special offer.No credit account exists

Guaranteed payment for a new vehicle costing £26,000. Paymentmust be made in person when the vehicle is collected from thedealer.

(b) Both are False

Direct debit

Faster payment

Business credit card

Bank draft

(c) Error in the general ledger Error causes Error does NOT an imbalance cause an imbalance

A cash purchase has been correctly recorded inpurchases account as £65, but has been recorded in cash book as £56

A bank payment to a trade payable has been recorded in the cash book only

Purchases returns of £150 have been debited to purchases account

A sales invoice has not been recorded in the accounting system

(d) (b) Rent received of £450 by cheque has been recorded in both accounts as £540

(e) True

4

4

4

4

a n s w e r s t o p r a c t i c e a s s e s s m e n t 2 3

Task 2

(a) Account name Amount Debit Credit £ Wages expense 26,741 4

Wages control 26,741 4

(b) Account name Amount Debit Credit £ Wages control 7,149 4

HM Revenue & Customs 7,149 4

(c) Account name Amount Debit Credit £ Wages control 18,282 4

Bank 18,282 4

(d) Account name Amount Debit Credit £ Wages control 1,310 4

Pension fund 1,310 4

Task 3

(a)Account name Amount Debit Credit £ Irrecoverable debts 540 4

VAT 108 4

Sales ledger control 648 4

4 b o o k k e e p i n g c o n t r o l s t u t o r z o n e

(b)Account name Amount Debit Credit £ Inventory 4,108 4Bank overdraft 1,095 4Capital 21,757 4Sales ledger control 12,395 4Purchases ledger control 7,962 4Wages 3,855 4Miscellaneous expenses 976 4Machinery 4,550 4Office equipment 2,680 4Rent 2,250 4

Journal to record the opening entries of new business

Task 4

(b) £6,584 Credit

(a) VAT control account

Details Amount £Purchases 6,373Sales returns 469Discounts allowed 340 Cash purchases 224Irrecoverable debt 90 Computer equipment 460Bank 5,273

Details Amount £Balance b/f 5,273Sales 13,104Purchases returns 346Discounts received 166 Cash sales 924

a n s w e r s t o p r a c t i c e a s s e s s m e n t 2 5

Task 5

(a)Details Amount Debit Credit

£ Balance of credit suppliers at 1 June 13,241 4Goods bought on credit 6,935 4Payments made to credit suppliers 6,752 4Discount received 112 4Goods returned to credit suppliers 1,046 4

(b) (b) Cr £12,266

(c) £

Purchases ledger control account balance as at 1 July 12,266

Total of purchases ledger accounts as at 1 July 12,045

Difference 221

(d) (c) A payment to a credit supplier was entered twice in the purchases ledger

6 b o o k k e e p i n g c o n t r o l s t u t o r z o n e

Task 6CASH BOOK

Date Details Bank Date Cheque Details Bank 20-4 £ 20-4 number £ 02 Jun Scotts 3,640 01 Jun Balance b/f 2,345

19 Jun D Dunlevy 1,638 01 Jun 240765 Walls plc 839

20 Jun Melia & Co 831 03 Jun 240766 Linsell & Stuart 248

24 Jun Dixon & Co 1,747 06 Jun 240767 Silk & Co 493

24 Jun Trew Ltd 3,745 10 Jun 240768 Siddique Brothers 1,107

24 Jun Amery Ltd 2,384 14 Jun 240769 Hudson Ltd 554

19 Jun 240770 Yanez Ltd 2,322

19 Jun Western Gas 763

20 Jun Aiken Insurance 1,241

22 Jun Bank charges 255

24 Jun Balance c/d 3,818

13,985 13,985

25 Jun Balance b/d 3,818

a n s w e r s t o p r a c t i c e a s s e s s m e n t 2 7

Task 7

(a)

Bank reconciliation statement as at 30 September 20-4

Balance as per bank statement £1,016

Add:

Name: Marsh & Co £968

Total to add £968

Less:

Name: Parry Cleaning £836

Name: Haddon Ltd £1,507

Total to subtract £2,343

Balance as per cash book £359

(b) Cash book balance Bank column totals £ £ 359 Credit 5,544

Task 8

(a) (1)Account name Amount Debit Credit

£Sales returns 2,190 4

(2)Account name Amount Debit Credit

£Sales returns 2,090 4

(3)Account name Amount Debit Credit

£Suspense 100 4

8 b o o k k e e p i n g c o n t r o l s t u t o r z o n e

(b) Account name Amount Debit Credit £

Bank 780 4 Insurance 780 4

Account name Amount Debit Credit £ Insurance 870 4

Bank 870 4

Task 9

Suspense

Details Amount £ Details Amount £ Rent received 1,425 Balance b/d 180

Rent received 1,245

Rent received

Details Amount £ Details Amount £ Suspense 1,245 Balance b/d 1,245 Balance c/d 1,425 Suspense 1,425

2,670 2,670

a n s w e r s t o p r a c t i c e a s s e s s m e n t 2 9

Task 10(a)

Account name Debit CreditSuspense 930

(b)Account name Original balance £ New balance £ Debit CreditCommission received 1,392 2,052 4Sales 73,391 73,661 4

(c)Account name Balance £ Debit in the Credit in the trial balance trial balanceCapital 16,271 4Sales ledger control 15,624 4Advertising 3,767 4

(d)Account name Debit CreditTotals 136,884 136,884