By Margaret Nicholson (auth.)
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28 Withdrew £60 in cash for private use. 31 S. Lawson settled his account by cheque. 3 Ron Stewart is a wholesaler. On 1 January 19-7 he had the following balances in his ledger. Dr. Cr. [ [ 6,800 880 Capital A. Frazer Motor vehicle 3,800 A. Hodges 1'1 00 740 2,040 J. Jennings Bank During the month of January 19-7 his trading transactions were as follows: Jan 2 3 4 5 Received £740 from J. Jennings by cheque. Bought goods on credit (£1,070) from A. Frazer. Bought office equipment (£560), paying by cheque.
The business keeps a record of these losses and profits during the year, and at the end of the year uses them to calculate the profit and loss account of the business. 41 A good illustration of a nominal account is the wages account. There may be £500 debited in the wages account, but the money is there in name only - it has been paid in wages to the employees. POINTS TO REMEMBER The balancing figure is called 'the balance on the account'. The 'balance' is the amount of the difference between the two sides of an account.
11 Bought goods on credit (£600) from Thompson Ltd. 14 Cash sales (£210). 16 Returned goods (£45) to Thompson Ltd. 18 Paid Thompson Ltd. the balance on their account by cheque. 20 Sold goods (£440) on credit to S. Lawson. 26 Paid wages in cash (£45). 27 S. Lawson returned goods (£40). 28 Withdrew £60 in cash for private use. 31 S. Lawson settled his account by cheque. 3 Ron Stewart is a wholesaler. On 1 January 19-7 he had the following balances in his ledger. Dr. Cr. [ [ 6,800 880 Capital A. Frazer Motor vehicle 3,800 A.
Accounting Skills by Margaret Nicholson (auth.)