# Principles of Accounting: General Journal opening new books entries

////Principles of Accounting: General Journal opening new books entries

## Principles of Accounting: General Journal opening new books entries

### ZIMSEC O Level Principles of Accounts Notes: General Journal opening new books entries

• This is a solution to a question found here
• One of the uses of the Journal is to create a new set of books when a propieter decides to move on to double entry and keeping a proper set of accounts
• Now we will present the solution:

a) Capital can be calculated using the accounting equation:

• The equation is also known as the balance sheet equation
• It states thatÂ Capital=Assets-Liabilities
• You should note that the equation can be changed to find any variable as long as the other two are known
• This can be done by changing the subject of the formula
• In this case first you need to find the total amount of assets:
AssetsAmount
Motor Van3700
Fixtures1800
Stock4200
Debtors
140
Bank860
Cash65
Total

10765

• Our creditors are:
• 129+410=539
• So our Capital would be:
• 10765-539
• \$10 226

b) Since 1 July is the date on which P Chiyangwa determined his assets and liabilities and established what they were we will use this as the starting day for our accounts. You need to take the following steps in order to record these entries in the Journal:

1. Create entries for each asset on the debit side
2. Create entries for each of these liabilities on the credit side
3. Open an account for capital and show it as a credit balance

The entries would be:

Journal Entries
DateDetailsDrCr
20x7
1 Jul
\$\$
Van3700
Fixtures1800
Stock4200
Debtors:
• A Runesu
• Z Zengeni
• 95
• 45
Bank860
Cash65
Creditors:
• Mohammed Mussa
• Econet

• 129
• 410
Capital10226

10765

10765

c) Now that we have the Journal entries the ledger accounts will be extremely easy to make:

 Purchases(Creditor's) Ledger DR M Mussa Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 129 DR Econet Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 410 Debtor's(Sales Ledger) Ledger DR R Runesu Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 95 DR Z Zengeni Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 45 DR Cash Book CR Date Details Cash(\$) Bank(\$) Date Details Cash(\$) Bank(\$) 1 Jul Balance 65 860 General Ledger DR Motor Van Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 3700 DR Fixtures Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 1800 DR Stock Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 4200 DR Capital Account CR Date Details Amount(\$) Date Details Amount(\$) 1 Jul Balance 10226
• Now in an exercise/exam the exact items might differ from this but the principles are the same

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

By |2017-07-25T12:06:20+00:00July 25th, 2017|Notes, Ordinary Level Notes, Principles of Accounts Notes|Comments Off on Principles of Accounting: General Journal opening new books entries

### About the Author: Garikai Dzoma

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.