1. Bank Account and J.
Kamati’s Account – Explanation and Double Entry
(a) Bank Account
Date Entry Explanation Double Entry (Accounts affected)
Debit: Bank Account $25,000
Capital $25,000 Owner introduced capital (increase in asset).
Aug 1
(debit side) into the bank. Credit: Capital Account $25,000
(increase in owner’s equity).
Debit: Rent Expense Account $4,000
Rent $4,000 (increase in expense).
Aug 2 Paid rent by cheque.
(credit side) Credit: Bank Account $4,000
(decrease in bank balance).
Debit: Purchases Account $2,850
Purchases $2,850 Bought goods for cash (by (increase in expenses/inventory).
Aug 5
(credit side) cheque). Credit: Bank Account $2,850 (reduce
bank balance).
Debit: Bank Account $3,000 (increase
Cash was banked
Aug Cash $3,000 in bank balance).
(transferred from cash to
20 (debit side) Credit: Cash Account $3,000 (reduce
bank).
cash in hand).
Debit: Bank Account $2,460 (increase
Aug J. Kamati $2,460 Received cheque from J. in bank balance).
28 (debit side) Kamati for payment. Credit: J. Kamati’s Account $2,460
(reduce debtor’s balance).
Aug Balance c/d Closing bank balance to be No double entry (balance carried
31 $18,690 carried down to next month. forward).
(b) J. Kamati’s Account
Double Entry (Accounts
Date Entry Explanation
affected)
Debit: Purchases Account $2,600
(increase in expense).
Purchases $2,600 Goods purchased on credit
Aug 9 Credit: J. Kamati’s Account
(credit side) from J. Kamati (supplier).
$2,600 (increase in liability to
supplier).
Debit: J. Kamati’s Account
Aug Bank $2,460 $2,460 (reduces liability).
Paid J. Kamati by cheque.
28 (debit side) Credit: Bank Account $2,460
(reduce bank balance).
Aug Balance c/d $140 Closing balance shows amount No double entry (balance carried
31 (debit side) owed to J. Kamati at month-end. forward).
2. Jenny Jones Account – Explanation and Double Entry
Double Entry (Accounts
Date Entry Explanation
affected)
Debit: Jenny Jones Account
$2,600 (increase in
Sales $2,600
Jan 4 Goods sold on credit to Jenny Jones. receivables).
(debit side)
Credit: Sales Account $2,600
(increase in revenue).
Debit: Sales Returns Account
Returns $150 Jenny Jones returned goods worth $150 (reduces revenue).
Jan 6
(credit side) $150. Credit: Jenny Jones Account
$150 (reduces receivable).
Debit: Bank Account $2,454
Received payment by cheque from
Jan Bank $2,454 (increase in bank balance).
Jenny Jones (after any discount or
19 (credit side) Credit: Jenny Jones Account
deductions).
$2,454 (reduce receivable).
Debit: Jenny Jones Account
$3,300 (increase in
Jan Sales $3,300
Additional credit sales to Jenny Jones. receivables).
21 (debit side)
Credit: Sales Account $3,300
(increase in revenue).
Jan Balance c/d Closing balance shows amount owed No double entry (balance
31 $3,300 by Jenny Jones at month-end. carried forward).
✅ Summary of Key Points
1. Capital introduced: Debit bank, credit capital.
2. Expenses paid: Debit expense, credit bank.
3. Purchases on credit: Debit purchases, credit supplier.
4. Receipts from debtors: Debit bank, credit debtor.
5. Returns inwards (sales returns): Debit sales returns, credit debtor.
6. Closing balances are carried forward without double entry.