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Principles of Accounts:Bank Overdraft example

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Principles of Accounts:Bank Overdraft example

Overdraft receipt. Note an overdraft is an asset to the bank. Image credit consumerist.com

Overdraft receipt. Note an overdraft is an asset to the bank. Image credit consumerist.com

ZIMSEC O Level Principles of Accounts Notes: The Cash Book: Bank Overdraft example

  • Consider the following entries and enter into the books of J Mativure
  • You are only required to write up the Cash Book

The Following transactions took place in the month of July 20×7
1 Started the business with $5 000 Cash
3 Deposited $1200 into the Bank
4 Made Purchases of $600 and paid by Cheque
12 Made Cash Sales of $400
15 Sold goods on credit to J Musoro $300
22 Received Cheque from J Musoro $280 in full settlement of his account
30 Paid wages $1800 by cheque

NB No other transactions took place during the year

Solution

Cash Book
DetailsDiscount AllowedCash BankDetailsDiscount ReceivedCashBank
$ $ $ $
Capital5000Bank1200
Cash1200Purchases600
Sales400Wages1800
J Chimusoro20280Balance c/d4200
Balance c/d920

20

5400

2400

-

5400

2400

To access more topics go to the Principles of Accounts Notes.

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By | 2017-01-17T11:14:32+00:00 March 13th, 2016|Notes, Ordinary Level Notes, Principles of Accounts Notes|0 Comments

About the Author:

He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.

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