Cambridge IGCSE and O Level Accounting
Coursebook answers
Chapter 2
Answers to test yourself questions
Test yourself 2.1
1 It is necessary to make a double entry for each transaction in order to record the two effects of
each transaction – a giving and a receiving.
2 The folio column in a ledger account is used for reference purposes and shows the page of the
ledger on which the account named in the details column appears.
Test yourself 2.2
1 a debit rates account credit bank account
b debit machinery account credit bank account
c debit bank account credit commission receivable account
d debit XYZ Loan Co credit bank account
Test yourself 2.3
1 a debit cash or bank account credit capital account
b debit drawings account credit motor vehicles account
c debit drawings account credit purchases account
1
Test yourself 2.4
1 Find the difference between the two sides of the account. Enter this figure on the next available
line on the side which is the smaller in money. Write the date and the word ‘Balance’ and enter
‘c/d’ in the folio column. Enter a matching total on each side of the account (on the same level).
Make the double-entry for the balance by entering the amount of the balance on the opposite
side to that where it was entered as a balance carried down. Write the date and the word
‘Balance’ in the details column and ‘b/d’ in the folio column.
2 Credit purchases are goods purchased for resale which are paid for at a later date rather than at
the time of purchase.
3 Two from:
• goods were faulty
• goods were damaged
• goods were not what was ordered.
4 Sales returns may be called returns inwards.
5 Carriage inwards is the cost of transporting goods purchased by the business to its premises.
This is part of the cost of purchasing the goods. Carriage outwards is the cost of delivering
goods to a customer’s premises. This is a selling expense.
Answers to exam-style questions
1 B
2 A
3 D
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
4
Bank account
Date Details Fo. $ Date Details Fo. $
20–6 20–6
July 1 Capital 50 000 July 2 Premises 25 000
9 Sales 200 4 Equipment 4 000
7 Advertising expenses 60
14 Mayur Vihar Traders 1 000
Balance c/d 20 140
50 200 50 200
20–6
July 15 Balance b/d 20 140
Capital account
Date Details Fo. $ Date Details Fo. $
20–6
July 1 Bank 50 000
Premises account
Date Details Fo. $ Date Details Fo. $
20–6
2
July 2 Bank 25 000
Equipment account
Date Details Fo. $ Date Details Fo. $
20–6
July 4 Bank 4 000
Purchases account
Date Details Fo. $ Date Details Fo. $
20–6
July 6 Mayur Vihar Traders 1 500
Mahur Vihar Traders account
Date Details Fo. $ Date Details Fo. $
20–6 20–6
July 14 Bank 1 000 July 2 Purchases 1 500
Balance c/d 1 500 2 820
1 500 1 500
20–6
July 15 Balance b/d 500
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
Advertising expenses account
Date Details Fo. $ Date Details Fo. $
20–6
July 7 Bank 60
Sales account
Date Details Fo. $ Date Details Fo. $
20–6
July 9 Bank 200
12 Ridhima 310
Ridhima account
Date Details Fo. $ Date Details Fo. $
20–6 20–6
July 12 Sales 310 July 13 Sales returns 220
310 14 Balance c/d 290
310 310
July 15 Balance b/d 290
Sales returns account
3
Date Details Fo. $ Date Details Fo. $
20–6
July 13 Ridhima 20
5
Katie
Capital account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 1 Balance b/d 15 000
Inventory account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 1 Balance b/d 3 400
Fixtures and fittings account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 1 Balance b/d 10 100
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
Daisy account
Date Details Fo. $ Date Details Fo. $
20–4 20–4
Oct 1 Balance b/d 1 110 Oct 30 Bank 1 110
1 110 1 110
Zara account
Date Details Fo. $ Date Details Fo. $
20–4 20–4
Oct 7 Purchases returns 1 180 Oct 1 Balance b/d 1 760
14 Bank 1 760 2 Purchases 1 500
31 Balance c/d 1 420 0 001
3 260 3 260
20–4
Nov 1 Balance b/d 1 420
AB Finance loan account
Date Details Fo. $ Date Details Fo. $
20–4 20–4
Oct 10 Bank 2 000 Oct 1 Balance b/d 2 000
2 000 2 000
4
Bank account
Date Details Fo. $ Date Details Fo. $
20–4 20–4
Oct 1 Balance b/d 4 150 Oct 4 AB Finance Loan 2 000
21 Sales 1 940 14 Zara 1 760
30 Daisy 1 110 31 Balance c/d 2 440
6 200 6 200
20–4
Nov 1 Balance b/d 2 440
Purchases account
Date Details Fo. $ Date Details Fo. $
20–4 20–4
Oct 2 Zara 1 500 Oct 28 Drawings 140
Purchases returns account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 7 Zara 80
© Cambridge University Press 2018
Cambridge IGCSE and O Level Accounting
Sales account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 21 Bank 940
Drawings account
Date Details Fo. $ Date Details Fo. $
20–4
Oct 28 Purchases 140
6 May 1 Amount owed by Marine Drive Stores to Central Wholesalers
Double entry: debit Central Wholesalers account for April
10 Marine Stores purchased goods on credit from Central Wholesalers
Double entry: debit purchases account
17 Marine Drive Stores returned goods to Central Wholesalers
Double entry: credit purchases returns account
20 Marine Drive Stores paid a cheque to Central Wholesalers
Double entry: credit bank account
31 Amount owed by Marine Drive Stores to Central Wholesalers
Double entry: credit Central Wholesalers account for June
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