Subjective

Time Allowed: 90minutes Total Marks: 50

1. Complete the following table by preparing columns of amount to be debited and

amounts to be credited:
(a) Bought office machinery on credit from D Isaacs Ltd.
(b) The proprietor paid a creditor, C Jones, from his
private funds.
(c) A debtor, N Fox, paid us in cash.
(d) Repaid part of loan from P Exeter by cheque.
(e) Returned some of office machinery to D Isaacs Ltd.
(f) A debtor, N Lyn, pays us by cheque.
(g) Bought van by cash.

2. Write up the asset and liability and capital accounts to record the following transactions
in the records of F Murray.
20X7
July 1 Started business with £15,000 in the bank.
== 2 Bought office furniture by cheque £1,200.
== 3 Bought machinery £1,400 on credit from Trees Ltd.
== 5 Bought a van paying by cheque £6,010.
== 8 Sold some of the office furniture – not suitable for the business – for £150 on credit to
D Twig & Sons.
== 15 Paid the amount owing to Trees Ltd £1,400 by cheque.
== 23 Received the amount due from D Twig & Sons £150 in cash.
== 31 Bought more machinery by cheque £650.

3. You are required to open the asset and liability and capital accounts and record the
following transactions for June 20X8 in the records of P Bernard.
20X8
June 1 Started business with £12,000 in cash.
== 2 Paid £11,700 of the opening cash into a bank account for the business.
== 5 Bought office furniture on credit from Dream Ltd for £1,900.
== 8 Bought a van paying by cheque £5,250.
== 12 Bought equipment from Pearce & Sons on credit £2,300.
== 18 Returned faulty office furniture costing £120 to Dream Ltd.
== 25 Sold some of the equipment for £200 cash.
== 26 Paid amounts owing to Dream Ltd £1,780 by cheque.
== 28 Took £130 out of the bank and added to cash.
== 30 F Brown lent us £4,000 – giving us the money by cheque.

4. G Brown has the following items in her balance sheet as on 30 April 20X8: Capital
£18,400;
Creditors £2,100; Fixtures £2,800; Car £3,900; Stock of goods £4,550; Debtors £2,780; Cash
at bank
£6,250; Cash in hand £220.
During the first week of May 20X8
(a) She bought extra stock for goods £400 on credit.
(b) One of the debtors paid her £920 by cheque.
(c) She bought a computer by cheque £850.
You are asked to draw up a balance sheet as on 7 May 20X8 after the above transactions
have been completed.

5. J. Hill has the following assets and liabilities as on 30 November 20X9: Creditors £2,800;
Equipment £6,200; Car £7,300; Stock of goods £8,100; Debtors £4,050; Cash at bank
£9,100; Cash in hand £195.
You are not given the capital amount at that date.
During the first week of December 20X9
(a) Hill bought extra equipment on credit for £110.
(b) Hill bought extra stock by cheque £380.
(c) Hill paid creditors by cheque £1,150.
(d) Debtors paid Hill £640 by cheque and £90 by cash.
(e) Hill put in an extra £1,500 into the business, £1,300 by cheque and £200 in cash.
You are to draw up a balance sheet as on 7 December 20X9 after the above transactions
have been completed.

Define the following term with Examples:

1. What are assets?
2. What are current assets?
3. What are fixed assets?
4. What is liabilities?
5. What is capital?
6. What is sole proprietorship?
7. What is partnership?
8. What is General journal?
9. What is balance sheet?
10. How do you finance your business?