Preparing Final Accounts

Can anyone help with these questions?

A business is showing a large credit balance on their cash book. the Accountant enters a low value transaction into the records. when the transaction is entered the assets, liabilities and capital all remain unchanged. what transaction has the accountant entered?

The answer is a 'bank payment to a credit supplier' but I'm not sure why.

There is also another question in the sample where the sole trader buys office furniture but it doesn't appear in the capital account according to the answers and I'm not sure why.

Any help would be much appreciated :)

Comments

  • CeeJaySix
    CeeJaySix Well-Known Registered Posts: 645
    I'm going with common sense, I don't remember any questions like this!

    As the bank account is overdrawn (credit balance), it is included in liabilities. Making a payment to a supplier would dr creditors, cr bank. Therefore the total liabilities figure remains unchanged.
  • ariadne
    ariadne Registered Posts: 218
    Could the office furniture not show up in the capital account because it's too low value? There may be a value used to help decide whether a purchase is significant enough for inclusion as a non current asset. one of the practice exams for AP1 has an invoice for furniture where the chairs, individually, are too low value for inclusion in the non current asset register. I'm doing the AP modules at the moment too.
  • j1994
    j1994 Registered Posts: 106
    How do i calculate value for sales at a margin of 40% .when im just given opening inventory,closing,purchases and cogs???
Privacy Policy