Books of Original Entry

1. Books of Original Entry

2. Purchases Day Book Date Particulars Amounts Jul 1 6 10 18 30 31 X Co Y Co Z Co X Co (Less 10% trade discount) Z Co Total purchases account $ 165 22 10 225 60 482 Purchases Book

3. Posting the Purchases Book • 1) Individual purchases amounts in the purchases book are posted to the credit side of the respective creditors’ personal accounts in the purchases ledger • 2) Total purchases is posted to the debit side of the purchases account in the general ledger

4. X Co Y Co $ Jul 1 Purchases 165 18 Purchases 225 $ Jul 6 Purchases 22 Purchases Ledger

5. Z Co $ Jul 10 Purchases 10 30 Purchases 60 Purchases $ Jul 31 Total Credit Purchases for the month 482 General Ledger

6. Sales Day Book Date Particulars Amounts Aug 2 10 15 18 31 A Co B Co A Co B Co Total sales account $ 200 550 1,215 500 2,465 Sales Book

7. A Co $ Aug 2 Sales 200 15 Sales 1,215 B Co $ Aug 10 Sales 550 28 Sales 500 Sales Ledger

8. Sales $ Aug 31 Total Credit Sales for the month 2,465 General Ledger

9. Returns Outwards Book Date Particulars Amounts Aug 10 15 31 X Co Z Co Total returns outwards account $ 10 5 15 Returns Inwards and Outwards Books

10. Returns Inwards Book Date Particulars Amounts Aug 19 25 31 A Co A Co Total returns inwards account $ 20 95 115

11. X Co Z Co $ Jul 1 Purchases 165 18 Purchases 225 $ Jul 1 Purchases 20 18 Purchases 60 $ Aug 10 Returns outwards 10 $ Aug 10 Returns outwards 5 Purchases Ledger

12. A Co $ Aug 2 Sales 200 15 Sales 1,215 $ Aug 19 Returns inwards 20 25 Returns inwards 95 Sales Ledger

13. Returns Outwards $ Aug 31 Total returns outwards for the month 15 Returns Inwards $ Jul 31 Total returns inwards for the month 115

14. Cash Book Date Receipts Discount Cash Bank Date Payments Discount Cash Apr 1 3 8 18 20 30 Bal b/f Mr. Wong Sales Mr. Cheung Mr. Cheung Cash $ 150 20 (20) $ 1,500 5,000 $ 5,850 980 5,500 Apr 1 12 20 22 29 30 Bal b/f Mr. Ho Mr. Cheung Mr. Lo Salaries Bank Bal c/d $ 60 $ 5,500 1,000 150 6,500 12,330 60 6,500 Bal b/d 1,000 2,355 Cash Book Bank $ 4,000 2,250 985 1,940 800 2,355 12,330 May 1

15. Example • Record the following transactions in a three-column cash book Apr 1 Balance b/f: cash $1,500, bank overdraft $4,000. 3 Received from Mr. Wong a cheque being in full settlement of his debt of $6,000; less 2.5% cash discount. 8 Cash sales $5,000 12 Paid to Mr. Ho a cheque for goods purchased in the previous month amounting to $3,000; less 25% trade discount. 18 Received a cheque from Mr. Cheung for goods sold at $1,000 deducting 2% cash discount. 20 The cheque received from Mr. Cheung was returned by the bank as ‘unpaid’ with charges of $5 22 Paid by cheque the amount due to Mr. Lo for the debt of $2,000 being allowed 3% cash discount. 29 Paid salaries by cheque $800 30 Banked all the cash except for $1,000

16. Receipts Date Particulars Payments Stationery Wages Postage Ledger $ 51.70 348.30 Apr 1 1 6 7 14 16 21 23 27 Bal b/f Cash Notepaper Wages Stamps Mr. Tong Wages Envelopes Stamps $ 32.80 91.40 37.50 53.60 92.80 43.70 21.00 $ 32.80 43.70 $ 91.40 92.80 $ 37.50 21.00 $ 53.60 372.80 76.50 184.20 58.50 53.60 30 Bal c/d 27.20 400.00 May 1 2 400.00 27.20 372.80 Bal b/d Cash Petty Cash Book

17. Example Mr. Yip is a sole trader who keeps his petty cash on the imprest system – the imprest amount being $400. The petty cash transactions for the month of April are as follows: Apr 1 Petty cash in hand $51.70. 1 Petty cash restore to the imprest amount. 6 Bought notepaper for $32.80. 7 Paid wages $91.40. 14 Bought postage stamps for $37.50. 16 Paid to Mr. Tong, a creditor, $53.60. 21 Paid wages $92.80. 23 Bought envelopes for $43.70. 27 Bought postage stamps for $21.00 Required: Draw up the petty cash book for the month of April, recording the above transactions. You should also give the entry on 2 May, restoring the petty cash to the imprest amount.