Level: Easy
Easy Worked Examples: Books of Prime Entry
Six easy, graded examples on recording transactions in the Books of Prime Entry: the General Journal, Special Journals, Cash Book and Petty Cash Book.
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Example 1: Opening Entry in the General Journal
Question
Solution plan
The opening entry records all assets (debited) plus capital and liabilities (credited) on the date the business begins. Here: Debit Cash RM5,000 and Fittings RM3,000 (assets increase); Credit Capital RM8,000. Total debit (5,000+3,000=8,000) must equal total credit (8,000).
| Date | Particulars | Folio | Debit (RM) | Credit (RM) |
|---|---|---|---|---|
| 1 Jan 2024 | Cash | - | 5,000 | - |
| - | Fittings | - | 3,000 | - |
| - | Capital | - | - | 8,000 |
| - | (Opening entry of the business) | - | - | - |
| - | - | 8,000 | 8,000 |
Answer
Total debit RM8,000 equals total credit RM8,000. The opening entry balances and Mr Zaki's opening capital is RM8,000.
Where marks are usually lost
Example 2: Credit Purchase of a Non-Current Asset
Question
Solution plan
A machine is a non-current asset not bought for resale, so it is not recorded as Purchases. The asset increases, so Debit Machine RM12,000. Because it is bought on credit, the creditor increases, so Credit Syarikat Mesin Jaya RM12,000.
| Date | Particulars | Folio | Debit (RM) | Credit (RM) |
|---|---|---|---|---|
| 5 May 2024 | Machine | - | 12,000 | - |
| - | Syarikat Mesin Jaya | - | - | 12,000 |
| - | (Machine bought on credit) | - | - | - |
| - | - | 12,000 | 12,000 |
Answer
Debit Machine RM12,000, Credit Syarikat Mesin Jaya RM12,000. Total debit equals total credit at RM12,000.
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Example 3: Owner's Drawings of Goods
Question
Solution plan
Drawings of goods reduce the owner's capital, so Debit Drawings RM500. The goods leaving are recorded at cost by reducing Purchases, so Credit Purchases RM500 (not Sales, as no sale occurred).
| Date | Particulars | Folio | Debit (RM) | Credit (RM) |
|---|---|---|---|---|
| 10 Jun 2024 | Drawings | - | 500 | - |
| - | Purchases | - | - | 500 |
| - | (Goods taken for personal use) | - | - | - |
| - | - | 500 | 500 |
Answer
Debit Drawings RM500, Credit Purchases RM500. Total debit equals total credit at RM500.
Where marks are usually lost
Example 4: Recording Credit Purchases in the Purchases Journal
Question
Solution plan
The Purchases Journal records only credit purchases of trading goods. Each transaction is listed by the creditor's name and amount. At month-end the amount column is totalled (800+1,200=2,000) and this total is posted to the debit of the Purchases Account in the ledger.
| Date | Particulars (Creditor) | Folio | Amount (RM) |
|---|---|---|---|
| 3 Jul 2024 | Pembekal Cerdik | - | 800 |
| 15 Jul 2024 | Syarikat Buku Maju | - | 1,200 |
| 31 Jul 2024 | Transferred to Purchases Account (Dr) | - | 2,000 |
Answer
The Purchases Journal total for July is RM2,000. This total is debited to the Purchases Account, while each creditor is credited individually in their own account.
Where marks are usually lost
Example 5: Preparing and Balancing the Three-Column Cash Book
Question
Solution plan
The three-column Cash Book combines discount, cash and bank columns. Receipts go on the debit side, payments on the credit side. Discount allowed sits in the discount column on the debit side; discount received in the discount column on the credit side. The cash and bank columns are balanced separately to get the balance c/d, while the discount columns are only totalled (not balanced).
| Date | Particulars | Fol | Disc (RM) | Cash (RM) | Bank (RM) | Date | Particulars | Fol | Disc (RM) | Cash (RM) | Bank (RM) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 Aug | Balance b/d | - | - | 300 | 2,000 | 18 Aug | Osman | - | 20 | - | 480 |
| 6 Aug | Salim | - | 50 | - | 950 | 25 Aug | Purchases | - | - | 200 | - |
| 12 Aug | Sales | - | - | 400 | - | 31 Aug | Balance c/d | - | - | 500 | 2,470 |
| - | - | 50 | 700 | 2,950 | - | - | 20 | 700 | 2,950 | ||
| 1 Sep | Balance b/d | - | - | 500 | 2,470 | - | - | - | - | - |
The discount columns are memorandum columns: only totalled, not balanced.
Answer
The cash balance c/d is RM500 (debit balance) and the bank balance c/d is RM2,470 (debit balance). Total discount allowed is RM50 and total discount received is RM20.
Where marks are usually lost
Example 6: Petty Cash Book and the Imprest System
Question
Solution plan
Under the imprest system the petty cashier is given a fixed float (RM200). Each petty expense is entered in the Total column and analysed into the appropriate column. Total expenses = 30+25+40+35 = RM130. Balance c/d = 200 - 130 = RM70. At the start of the next period a reimbursement of RM130 is made to restore the float to RM200.
| Received (RM) | Date | Particulars | Fol | Total (RM) | Stationery (RM) | Postage & Stamps (RM) | Transport (RM) | General (RM) |
|---|---|---|---|---|---|---|---|---|
| 200 | 2 Sep | Float (Cash Book) | CB | - | - | - | - | - |
| - | 3 Sep | Postage stamps | - | 30 | - | 30 | - | - |
| - | 5 Sep | Taxi fare | - | 25 | - | - | 25 | - |
| - | 7 Sep | Stationery bought | - | 40 | 40 | - | - | - |
| - | 9 Sep | Cleaning wages | - | 35 | - | - | - | 35 |
| - | - | Total | - | 130 | 40 | 30 | 25 | 35 |
| - | 9 Sep | Balance c/d | - | 70 | - | - | - | - |
| 200 | - | - | 200 | - | - | - | - | |
| 70 | 10 Sep | Balance b/d | - | - | - | - | - | - |
| 130 | 10 Sep | Reimbursement (Cash Book) | CB | - | - | - | - | - |
Answer
Total petty expenses for the week are RM130, analysed as: Stationery RM40, Postage & Stamps RM30, Transport RM25 and General RM35. The balance c/d is RM70, and a reimbursement of RM130 restores the float to RM200.
Where marks are usually lost
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