I need to place the following ledger accounts under the correct heading?
sales, motor vehicle, wages, capital, customer (receivable), purchases, drawings, cash, sales return, purchases returns, bank(overdrawn) , supplier (payable) , fixtures and fittings, stationery
And I have ALICE table.
I placed:
Assets: sales,customer receivable), motor van, cash and stationery.
Liabilities: supplier (payable), bank(overdrawn), purchases return
Income: sale returns
Capital: capital
Expenses: purchases, wages , drawings, fixtures & fittings.
Could anyone help me?
Stationery is an expense, same as wages and purchases. Although I can see why you might think it is an asset (especially if you have a store-room full of the stuff), in 99% of cases it's useful life is less than a year and it should therefore be recognised as an expense.
Purchases returns should go under expenses - they go against purchases (if you have bought 10 items then returned 2, you only want to show the cost of 8 as an expense).
Drawings go under capital - they are the owner taking money out of the business rather than a business expense.
Fixtures and fittings are an asset - like a motor vehicle, they have a useful economic life greater than a year.
agnieszkag5
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Please can you let me have the details of the question which you are stuck on and I will see if I can help.
sales, motor vehicle, wages, capital, customer (receivable), purchases, drawings, cash, sales return, purchases returns, bank(overdrawn) , supplier (payable) , fixtures and fittings, stationery
And I have ALICE table.
I placed:
Assets: sales,customer receivable), motor van, cash and stationery.
Liabilities: supplier (payable), bank(overdrawn), purchases return
Income: sale returns
Capital: capital
Expenses: purchases, wages , drawings, fixtures & fittings.
Could anyone help me?
Purchases returns should go under expenses - they go against purchases (if you have bought 10 items then returned 2, you only want to show the cost of 8 as an expense).
Drawings go under capital - they are the owner taking money out of the business rather than a business expense.
Fixtures and fittings are an asset - like a motor vehicle, they have a useful economic life greater than a year.