By Margaret Nicholson (auth.)
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Extra info for Accounting Skills
As with sales and purchases, avoid the use of the word 'goods' in the double entry accounts. The transaction itself will usually refer to the items as 'goods' but when recording the transaction in the double entry accounts write 'returns inwards' or 'returns outwards', as the case may be. In the following worked example, consider each transaction carefully and proceed to fmd the entries in the double entry accounts. Feb 1 4 6 10 12 15 20 22 25 28 24 75 Bought goods on credit (£150) from S. Singer.
2 Purchased goods on credit (£359) from Smith & Weston Ltd. 4 Bought office furniture on credit (£460) from Newstylax. 5 Bought goods (£675), paying by cheque. 7 Returned goods (£29) to Smith & Weston Ltd. 9 Sold goods on credit (£450) to H. Gibson. 10 Withdrew £300 cash from the bank. 12 D. Shelley took £50 cash for his personal use. 14 Paid rent (£200) in cash. 15 Sold goods (£150), receiving a cheque immediately. 16 Paid insurance (£30) by cheque. 18 Received a loan of £2,000 from R. Cawood by cheque.
24 Credit sales to R. Sinclair (£145); K. Bray (£221). 26 Paid a cheque for £440 toM. Trenholme. 27 Goods returned by K. Bray £21. 28 Bought goods on credit (£350) from R. Marples. 29 Paid £250 by cheque to Linton Garages. 30 Goods returned toR. Marples (£25). 31 Received a cheque (£210) from D. Davey. 6 The following transactions are to be entered in the double entry accounts of T. Fountain, for the month of June 19-8. Jun 1 Started business with £10,000 in the Bank. 2 Bought goods on credit from M.