Double Entry Book-Keeping
Need To Know
At the end of the this section a student should be able to:
1. Identify what the general journal is used to record.
2. Explain how to find the authorised share capital figure in the general journal.
3. Explain the rule regarding assets and liabilities in the general journal (re: their balances)
4. Explain the rule when posting a balance from the general journal to the ledgers.
5. Explain what a bad debt is.
6. Explain how to record a bad debt in the general journal.
7. Explain how to record a bad debt in the general journal
8. Explain the difference between a cash transaction and a credit transaction?
9. Identify the accounts that deal with cash transactions.
10. Identify the account that deal with credit transactions.
11. Explain the function/role of the purchases/sales day book.
12. Draft the layout of the purchases/sales day book.
13. What is the folio column used for?
14. Explain what VAT is.
15. State three reasons why goods might be returned to the seller/purchaser.
16. Explain what type of redress a company is entitled to if the goods were bought on credit.
17. What is the function of the purchase/sales returns day book?
18. Draft the layout of the purchases/sales returns day book.
19. Explain how a purchases/sales returns transaction dealt with in the general ledger? Explain why this is so?
20. How is a purchases/sales returns transaction dealt with in the creditors’ ledger? Explain why this is so.
21. Why would a business keep a creditors/debtors ledger?
22. What side is the opening balance in the creditors‘ledger/debtors? What does this balance mean?
23. Identify the two accounts that must be opened in the general ledger to record a credit purchase/credit sale. Why are these two accounts opened?
24. Explain the function of a trial balance.
25. What is the rule when transferring balances from the ledgers to the trial balance?