1. Books of Original Entry

2. Purchases Book Purchases Day Book Date Particulars Amounts Jul 1 6 1018 30 31
X Co
Y Co
Z Co
X Co (Less 10% trade discount)
Total purchases account $
165 22
225 60
482
Purchases Day 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. Purchases Ledger
X Co $
Jul Purchases
18 Purchases
Y Co $
Jul Purchases

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

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

7. Sales Ledger
A Co $
Aug Sales
Sales ,215
B Co $
Aug Sales
28 Sales

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

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

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

11. Purchases Ledger
X Co $
Jul Purchases
18 Purchases
Aug 10 Returns outwards
Z Co $
Jul Purchases
18 Purchases
Aug 10 Returns outwards

12. Sales Ledger
A Co $
Aug Sales
Sales ,215
Aug 19 Returns inwards
25 Returns inwards

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

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

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

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.