Principles of accounting questions.

A cash discount is a deduction off the amount due and is given to encourage prompt payment of debts.

A debtor is a person to whom the business owes money for goods purchased on credit.

An account will have a credit balance if the total debit amount exceed the total credit amounts.

Assets and liabilities accounts normally have debit balances while those of revenue accounts are credits.

If the trial balance has equal debit and credit totals, it proves that all the transactions have been recorded accurately following the rules of double entry.

Revenue accounts are increased by debits and decreased by credits.

The process of transfering the debit and credit information from the journal to individual accounts in the general ledger is called journalizing.

Withdrawal of goods for own use is recorded as debit entry in the drawings account and a credit entry in the purchases account.

The following transactions relate to Makongo Juu Traders during the month of January 2010.

Required

1. Record the above transactions  into the Purchases Day Book
2. Post the entries from the purchases day book in (a) above  to their relevant accounts in the ledger.

Jordan`s financial position on 1^st May 2010 as follows.

Cash in Hand Tshs 1,650/=

Cash at bank Tshs 7,500/=

Motor Vehicle Tshs 20,000/=

Transactions during the month of  May 2010 are as follows

Required

1. Record the transactions into the  three column cash book . Balance the cash book at the end of the month.
2. Determine the owner`s equity in the business as at 1^st May 2010.