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Accounting Principles and Balance Sheets

1. The document contains accounting transactions for asset, liability, income and expense accounts. 2. It provides the trial balance, income statement and balance sheet for a company. 3. The balance sheet shows total assets of $257,500 equal to total liabilities of $257,500, indicating the accounting equation balances.

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San Ban
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19 views24 pages

Accounting Principles and Balance Sheets

1. The document contains accounting transactions for asset, liability, income and expense accounts. 2. It provides the trial balance, income statement and balance sheet for a company. 3. The balance sheet shows total assets of $257,500 equal to total liabilities of $257,500, indicating the accounting equation balances.

Uploaded by

San Ban
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

From the following statements choose the correct statement (s):

The Cash account may have a credit balance.


The Bank account may have a credit balance.
Liability accounts have debit balances.
The decrease of a debt is observed by debiting the account relevant liability (eg Suppliers).

Investors create a company by depositing a cheque of € 100,000 in a bank account opened in the name of the company:
a. The bank account is credited
b. Bank account is debited
c. The Capital account is credited
d. The Capital account is debited

Asset accounts have debit balances.


No
Yes
No
Yes

No
Yes
Yes
No

Yes
Account Debit Balance Credit Balance Balance
Client ABC 67,105 52,456 14,649 Debit
Supplier XY 3,000 91,300 - 88,300 Credit
Bank 60,000 4,500 55,500 Debit
Bank Loan 200,000 200,000 -
ASSET ACCOUNTS LIABILITY ACCOUNTS
Furnishings Capital
DR CR DR
OB = 200,000 CB = 200,000 CB = 220,000

Bank Account State Contribution


DR CR DR
OB = 30,000 1=5,000 4=20,000
2=500 3=4,500 CB = 0
4=20,000 CB=0
5=2,500
CB=1,500

Cash FY results
DR CR DR
OB = 10,000 10=2,500
1=5,000 10=4,500
6=10,000
CB=25,000 7000

CB=3,500

DR CR DR

DR CR DR

DR CR DR
CCOUNTS
EXPENSE ACCOUNTS
Purchased
CR
goods
OB = 220,000 DR CR
5=2,500
10=2,500

CR Salaries
OB = 20,000 DR CR
3=4,500 10=4,500

CR DR CR
10=10,000
10=500

10500

OB=3500
DR CR
CR

CR DR CR

CR
INCOME ACCOUNTS
Sale of goods
DR CR
10=10,000 6=10,000

Interest Income
DR CR
10=500 2=500

DR CR

DR CR

DR CR
Result of the year Amount
Income
Sale of goods 10,000
Interest income 500

Total Income 10,500

Expenses
Purchase of goods 2,500
Salaries 4,500

Total Expenses 7,000

Result 3,500
Balance Sheet
ASSETS
FIXED ASSETS
FURNISHINGS 200,000

CURRENT ASSETS
CASH 25,000
BANK ACCOUNT -

TOTAL ASSETS 225,000


Balance Sheet
LIABILITIES
CAPITAL
CAPITAL 220,000
Results for the FY 3,500 223,500
DEBTS
BANK ACCOUNT 1,500

TOTAL LIABILITIES 225,000 -


ASSET ACCOUNTS LIABILITY ACCOUNTS
Construction Capital
DR CR DR
OB = 200,000 CB = 200,000 CB = 200,000

Bank Account Supplier Le Duc


DR CR DR
OB = 20,000 3=2,000 7=5,000
2=5,000 4=2,000 CB = 20,000
7=5,000 CB=28,000

CB = 16,000

Cash FY results
DR CR DR
OB = 10,000 2=5,000 10=3,000
5=3,000 10=2,000
6=10,000 10=2,000
CB=18,000

CB=6,000

DR CR DR

DR CR DR

DR CR DR
CCOUNTS
EXPENSE ACCOUNTS
Purchased
CR
goods
OB = 200,000 DR CR
1=3,000
10=3,000

CR Insurance
OB = 30,000 DR CR
1=3,000 3=2,000 10=2,000

Advertising
CR DR CR
10=10,000 4=2,000 10=2,000
10=3,000

DR CR
CR

CR DR CR

CR
INCOME ACCOUNTS
Sale of goods
DR CR
10=10,000 6=10,000

Rent
DR CR
10=3,000 5=3,000

DR CR

DR CR

DR CR
Result of the year Amount
Income
Sale of goods 10,000
Rent 3,000

Total Income 13,000

Expenses
Purchase of goods 3,000
Insurance 2,000
Advertising 2,000

Total Expenses 7,000

Result 6,000
Balance Sheet
ASSETS
FIXED ASSETS
BUILDINGS 200,000

CURRENT ASSETS
CASH 18,000
BANK ACCOUNT 16,000

TOTAL ASSETS 234,000


Balance Sheet
LIABILITIES
CAPITAL
CAPITAL 200,000
Results for the FY 6,000
DEBTS
SUPPLIER: LE DUC 28,000

TOTAL LIABILITIES 234,000 -


ASSET ACCOUNTS LIABILITY ACCOUNTS
Construction Capital
DR CR DR
OB = 100,000 CB = 100,000 CB = 160,000

Bank Account Supplier XY


DR CR DR
OB = 20,000 3=2,000 7=1,000
1=20,000 5=500 8=2,000
2=20,000 8=2,000 CB=60,000

CB = 55,500

Cash FY results
DR CR DR
OB = 10,000 10=3,000 11=2,000
4=5,000 11=2,000
9=20,000 11=500
CB=32,000

CB=17,500

Transport Bank Loan


DR CR DR
OB = 60,000
CB=20,000
CB=60,000

Client ABC
DR CR DR
OB = 30,000 1=20,000

CB=10,000

DR CR DR
CCOUNTS
EXPENSE ACCOUNTS
Purchased
CR
goods
OB = 160,000 DR CR
6=3,000 7=1,000
11=2,000

CR Electricity
OB = 60,000 DR CR
6=3,000 3=2,000 11=2,000

Bank Charges
CR DR CR
11=17,000 5=500 11=500
11=5,000

DR CR

CR
2=20,000

DR CR

CR

CR
INCOME ACCOUNTS
Sale of goods
DR CR
10=3,000 9=20,000
11=17,000

Rent
DR CR
11=5,000 4=5,000

Returned Goods
DR CR

DR CR

DR CR
Result of the year Amount
Income
Sale of goods 17,000
Rent 5,000

Total Income 22,000

Expenses
Purchase of goods 2,000
Electricity 2,000
Bank Charges 500

Total Expenses 4,500

Result 17,500
Balance Sheet
ASSETS
FIXED ASSETS
BUILDINGS 100,000
TRANSPORT 60,000
CURRENT ASSETS
CASH 32,000
BANK ACCOUNT 55,500
CLIENT ABC 10,000

TOTAL ASSETS 257,500


Balance Sheet
LIABILITIES
CAPITAL
CAPITAL 160,000
Results for the FY 17,500
DEBTS
SUPPLIER: LE DUC 60,000
BANK LOAN 20,000

TOTAL LIABILITIES 257,500 -

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