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Bookkeeping for beginners
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Edition: July 2010

Part number: MNL-BD-TIABWBK19-AU-solutions
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ii
The Child’s Play Chart of Accounts
Child’s Play — Chart of Accounts
1 Assets 4 Revenue
1.01 FirstBank Cheque Account 4.01 Sales - Services
1.02 LastBank Term Deposits 4.02 Sales - Merchandise
1.03 Debtors’ Control 4.03 Sales Returns and Allowances
1.04 Party Supplies Inventory 4.04 Discount revenue
1.05 Hire Equipment 4.05 Interest revenue
1.06 Office Equipment at Cost
1.07 Office Equipment - 5 Expenses

Accumulated Depreciation
1.08 Motor vehicles at Cost 5.01 Advertising
1.09 M/V - Accumulated 5.02 Bank Charges

Depreciation
5.03 Electricity
2 Liabilities 5.04 Office Supplies
2.02 Creditors’ Control 5.05 Staff Amenities
2.03 Customer Deposits 5.06 Purchases
2.04 GST Control 5.07 Purchases Returns and Allowances
2.05 Loans - FirstBank 5.08 Rent
5.09 Repairs & Maintenance
3 Owners’ Equity 5.10 Telephone
3.01 Partner A Capital – Jackie Childs 5.11 Depreciation
3.02 Drawings - Jackie Childs 5.12 Wages
3.03 Partner B Capital – Jill Childs 5.13 Insurance
3.04 Drawings - Jill Childs 5.14 Bad Debts
5.15 Interest Expense
iii
Debit & Credit Matrix
A + E = L + OE +R
DR CR
CR DR
Account Normal increase Decrease

Group balance state
Asset Debit increase = debit decrease = credit
Liabilities Credit increase = credit decrease = debit
Owner’s Credit increase = credit decrease = debit

Equity
Revenue Credit increase = credit decrease = debit
Expense Debit increase = debit decrease = credit
iv
Table of Contents
The Child’s Play Chart of Accounts ........................................................ iii

Debit & Credit Matrix ........................................................................... iv
1. Accounting & Small Businesses .................................................................1
1.A. Accounting and reporting periods ........................................................................... 1
1.B. GST ......................................................................................................................... 1
1.C. Review .................................................................................................................... 2
1.D. Optional task .......................................................................................................... 3
3. Double-Entry Accounting terms & concepts ................................................3
3.A. Assets or liabilities .................................................................................................... 3
3.B. Revenue or expenses ............................................................................................... 4
3.C. Owner’s equity ....................................................................................................... 4
3.D. Commencement of business ................................................................................... 5
3.E. Debits and credits .................................................................................................... 6
3.F. Daily processing ...................................................................................................... 7
3.G. Review — transaction analysis chart ........................................................................ 8
3.H. Review .................................................................................................................. 10
4. Business Transactions & Source Documents ..............................................11
4.A. Source documents ................................................................................................ 11
5. Journals ..............................................................................................12
5.A. Journals ................................................................................................................. 12
5.B. Post transactions to the sales journal ...................................................................... 12
5.C. Post transactions to the sales returns and allowances journal ................................. 13
5.D. Post transactions to the purchases journal ............................................................. 13
5.E. Post transactions to the purchases returns and allowances journal ......................... 13
5.F. Review — posting credit transactions ..................................................................... 14
5.G. Post transactions to the cash receipts journal ...................................................... 16
5.H. Post transactions to the cash payments journal ..................................................... 17
5.I. Review — post cash transactions to journals ........................................................... 18
5.J. Post transactions to the general journal .................................................................. 19
5.K. Review — post David Wong’s transactions to the general journal .......................... 20
6. Posting Transactions to the General Ledger ...............................................21
6.A. Post the SJ to the general ledger ............................................................................ 21
6.B. Post the SRJ to the general ledger .......................................................................... 22
6.C. Post the PJ to the general ledger ........................................................................... 22
6.D. Post the PRJ to the general ledger ......................................................................... 23
6.E. Post the CRJ to the general ledger ......................................................................... 24
6.F. Post the CPJ to the general ledger .......................................................................... 25
6.G. Review — post all Child’s Play journals for July to the general ledger ..................... 26
6.H. Trial balance ......................................................................................................... 26
6.I. Profit & Loss, and Balance Sheet ............................................................................. 26
v
7. Subsidiary Ledgers: Debtors ...................................................................27

7.A. Post totals to the debtors’ control account and transaction details to the
debtors’ subsidiary ledger ............................................................................................. 27
7.B. Reconcile the debtors’ subsidiary ledger ................................................................ 29
7.C. Review — prepare the debtors’ subsidiary ledger for Child’s Play .......................... 29
8. Subsidiary Ledgers: Creditors ..................................................................30
8.A. Post transactions to the creditors’ control account and creditors’ subsidiary ledger 30
8.B. Review — prepare the July creditors subsidiary ledger for Child’s Play .................... 33
Child’s Play Exercise - July 2014 ............................................................35

The Child’s Play Credit Journals .................................................................................... 35
Sales Journal ................................................................................................................. 35
Sales returns and allowances journal ............................................................................. 35
Purchases journal.......................................................................................................... 36
Purchases returns and allowances journal ..................................................................... 36
The Child’s Play Cash Journals ...................................................................................... 37
Cash receipts journal .................................................................................................... 37
Cash Payments Journal ................................................................................................. 38
General Journal ............................................................................................................. 39
The Child’s Play General Ledger ................................................................................... 41
Trial Balance ................................................................................................................. 45
Profit and Loss Statement ............................................................................................. 46
Balance Sheet ............................................................................................................... 47
Debtors’ Subsidiary Ledger ........................................................................................... 48
Debtors’ Reconciliation as at 31 July 2014 ............................................................... 49
Creditors’ Subsidiary Ledger .......................................................................................... 50
Creditors’ Reconciliation as at 31 July 2014 ............................................................. 51
9. Bank Reconciliation ..............................................................................52
9.A. Adjustment to the cash journals ............................................................................ 52
9.B. bank reconciliation statement ................................................................................ 53
9.C. Review — manual bank reconciliation ................................................................... 54
10. Using AccountRight ............................................................................57
10.A. Review task ......................................................................................................... 57
10.B. Optional challenges ............................................................................................. 58
11. Creating a Company File .....................................................................59
11.A. Setting up AccountRight ..................................................................................... 59
12. Setting up an Accounts List ..................................................................59
12.A. Practice task: Account categories ......................................................................... 59
12.B. Setting up accounts ............................................................................................. 60
13. Debtors & Creditors ............................................................................61
13.A. Debtors and creditors .......................................................................................... 61
14. Setting up for Accounts Receivable: Accounts, Preferences and Customers .... 62
14.A. Review setting up for accounts receivable ............................................................ 62
vi
15. Setting up for Accounts Payable: Accounts, Preferences and Suppliers ..........63
15.A. Review setting up accounts payable .................................................................... 63
16. Creating Items ...................................................................................63
16.A. Review — items ................................................................................................... 63
17. Processing Sales .................................................................................64
17.A. Review — sales .................................................................................................... 64
21. Adjusting Invoices ..............................................................................65
21.A. Review ................................................................................................................ 65
22. Purchasing from Suppliers: Quotes and Purchase Orders ............................65
22.A. Review quotes and purchase orders ..................................................................... 65
23. Purchasing from Suppliers: Bills .............................................................66
23.A. Checking supplier invoices .................................................................................. 66
23.B. Review ................................................................................................................. 67
26. Spending and Receiving Money in Banking .............................................68
26.A. Spending and receiving money ........................................................................... 68
27. Dealing with Petty Cash .......................................................................69
27.A. Identify valid petty cash claims ............................................................................ 69
The Petty Cash Guidelines for Child’s Play ............................................................... 69
Petty Cash Claims .................................................................................................... 69
28. Using the Bank Register .......................................................................71
28.A. The Bank Register ................................................................................................ 71
29. Bank Reconciliation .............................................................................72
29.A. Review ................................................................................................................ 72
vii
viii
1. Accounting & Small Businesses

1.A. Written task: Accounting and reporting periods
1 Why is it more beneficial to use monthly or quarterly reporting periods, rather than just
annual reporting?
• For compliance purposes
______________________________________________________________
• To complete the BAS
______________________________________________________________
• To keep more accurate and up-to-date records

• For management reporting purposes, such as analysing trends and keeping an eye on the
cash flow and profitiability of the business.
______________________________________________________________
1.B. Written task: GST

1 Indicate whether the businesses listed are likely to sell goods or services including GST or
GST-free:
Greengrocer Free_____________________
Fish and Chips shop GST_____________________
Pet shop GST_____________________
Family doctor Free_____________________
2 Why should a business register for the GST even if they sell only GST-free goods and services?
If you register for GST you are able to claim back the GST Paid on supplies (input taxed
credits)
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
1
1.C. Written task: Review

1 List one advantage and one disadvantage of being a sole trader.
Advantage:All profits to the business go to the sole trader
_____________________________________________________________
_____________________________________________________________
Disadvantage:Sole, unlimited liability - personal assets will be affected
_____________________________________________________________
_____________________________________________________________
2 What are input tax credits?
The amount of GST that you pay on your supplies that can be claimed back as a
rebate (input tax credit) from the ATO. ( Money you get back from GST paid)
_____________________________________________________________
_____________________________________________________________
3 When would a business receive a rebate from the ATO for GST paid?
If the business is registered for GST and Input Tax Credits exceed GST
collected.(have paid more GST than they collected)
_____________________________________________________________
_____________________________________________________________
4 If a business sold an item to a customer on 1st September but didn’t receive

payment for the item until 30th October, when would they be required to report
GST collected to the ATO if they reported monthly and were using:
a a cash basis?
30/10 (Reported on the October BAS)
_____________________________________________________________
or,
b an accrual basis?
1/9 (Reported on the September BAS)
_____________________________________________________________
2
1.D. Written task: Optional task

1 Provide two examples of each type of business listed.
Ownership Type Example 1 Example 2
Sole Trader Someone starting out a lawn local milk bar

mowing business
Partnership accounting firms ** a restaurant business **
Proprietary Company family business sporting club
Public Company Myer QANTAS
** N.B. These businesses could also operate as a Propriety Company
3. Double-Entry Accounting terms & concepts

3.A. Written task: Assets or liabilities
1 Indicate whether the following accounts are assets or liabilities.
Account Asset or Liability

Building Asset
Bank Loan Liability
Cash at Bank Asset
Creditors Liability
Motor Vehicle Asset
Overdraft Liability
Credit Card Liability
Cash on hand Asset
Mortgage Liability
Furniture Asset
Stock Asset
Computer Asset
Investment Asset
PAYG Payable Liability
GST Payable Liability
Debtors Asset
3
3.B. Written task: Revenue or expenses

1 Indicate whether the listed accounts are revenue or expense accounts.
Account Revenue or Expense
Sales of trading stock Revenue

Wages and salaries Expense
Electricity Expense
Discount received Revenue
Interest received Revenue
Interest paid Expense
Purchases of trading stock Expense
Repairs and maintenance Expense
Donation paid Expense
Insurance Expense
3.C. Written task: Owner’s equity

1 Use the accounting equation to determine the owner’s equity for the example
business.
Cafe $
A Equipment 15,000
A Cash at Bank 4,370
A Cash on Hand 100
A Stock of food 3,500
A Furniture and Fittings 8,730
A Goodwill 40,000
A Land and Buildings 100,000
L Mortgage Loan 20,000
A Crockery and Cutlery 3,210
L Creditors 5,160
A Debtors 1,400
$151,150
Owners’ equity =
4
3.D. Written task: Commencement of business

1 Complete the Statement of Financial Position as it would appear for the example below.
1 July 2014 Jackie & Jill Childs have commenced the business, in which they have equal
ownership, with the following assets and liabilities:
• $9,564 FirstBank account • $3,848 Office Equipment

• $5,346 Debtors’ Control • $26,180 Motor Vehicle
• $10,000 LastBank Term Deposits • $1,650 Creditors’ Control
• $1,900 Party Supplies Inventory • $30,000 Loans – Firstbank.
• $16,000 Hire equipment
Child’s Play Pty Ltd
Statement of Financial Position as at 1 July 2014
Assets $ Liabilities $
FirstBank account 9,564 Creditors’ Control 1,650
Debtors’ Control 5,346 Loans - Firstbank 30,000
LastBank Term Deposit 10,000
Party Supplies Inventory 1,900
Hire equipment 16,000 Owners’ Equity

Office Equipment 3,848 Capital - Partner A 20,594
Motor Vehicle 26,180 Capital - Partner B 20,594
$72,838 $72,838
Accounts affected
• FirstBank account (Asset) — is created because the business now owns a bank account with a
$9,564 balance.
• Debtors Control (Asset) — there are some customers that owe $5,346 to the business for goods or
services received and have yet to pay for them. This account is the total amount owed by the
customers.
• Term Deposits — LastBank (Asset) – is listed with a balance of $10,000.
• Inventory (Asset) — there are $1,900 worth of goods available for sale (Party Supplies Inventory).
• Other Assets (Asset) — there are $19,848 worth of assets used in the business (Hire equipment and
office equipment) .
• Motor Vehicle (Asset) — the business owns a motor vehicle worth $26,180.
• Creditors Control (Liability) — the business owes suppliers to the amount of $1,650.
• Loans - FirstBank (Liability) — the business borrowed $30,000 from the bank.
• Partner A Capital - Jackie Childs (Owners’ equity) — the contribution of $20,594 by the owner in
the business. This is the amount the business owes the owner.
• Partner B Capital - Jill Childs (Owners’ equity) - the contribution of $20,594 by the owner in the
business. This is the amount the business owes the owner.
5
3.E. Written task: Debits and credits

1 Complete the following table to identify the account group and whether a debit or
a credit should result from each situation:
Account Account Group increase/decrease Debit/credit
Credit Card liability Increase credit
Debtors control Asset Increase Debit
Sales Revenue Decrease Debit
Purchases Expense Increase Debit
Cheque Asset Decrease Credit
Owners capital Owners Equity Decrease Debit
2 Complete the table specifying for each transaction listed, the amounts affected,
whether they increase or decrease and whether the effect on the balance of the
account is a debit or credit.
Example Account Account Increase or Debit or Credit

Classification Decrease
$800 cheque paid for Rent Expense DR

monthly rent
Bank Asset CR
$25,000 purchase of Motor Vehicle Asset DR

motor vehicle
Bank Asset CR
$100 receipt for service Bank Asset DR

performed
Sales Revenue CR
$2,000 sales of goods Debtors Asset DR

on credit
Sales Revenue CR
6
3.F. Written task: Daily processing

1 Using the accounts list for Child’s Play provided in the front pages of the workbook, complete
the transaction analysis chart for the following transactions:
1 July 2014 Purchased stock on credit for $132 including GST from Gingerbread House,
(Invoice). - Note: The analysis for this transaction has been completed
Paid $1,200 wages from cheque account (Cheque)
2 July 2014 Received payment of $346 from debtor (Receipt)
Purchased stock on credit for $660 including GST from Everafter Toys, (Invoice)
Transaction analysis chart
Date Name of account A, L, OE, R or E Increase (Ç) / Debit (DR) Amount

affected Decrease (È) Credit (CR) DR________CR
2014
July 1 Purchases E DR 120
GST Control L DR 12
Creditors Control L CR 132
July 1 Wages E DR 1,200
FirstBank A CR 1,200
July 2 FirstBank A DR 346
Debtors Control A CR 346
July 2 Purchases E DR 600
GST Control L DR 60
Creditors Control L CR 660
NOTE
In manual bookkeeping, whenever we buy stock purchases we are allocating it to an expense
account as we are using a periodical inventory system. When we sell stock we are only updating
the income accounts, not the stock and cost of goods sold accounts.
7
3.G. Written task: Review — transaction analysis chart

Complete the following:
Using the accounts list for Child’s Play in the front pages of the workbook, complete the
transaction analysis chart for the following transactions that occurred on 2 July 2014:
1 Purchased office stationery from Storyton Office Supplies for $154 including GST. (Cheque 267406)
2 Eve Gold paid $100 as a deposit for an order. (Receipt 001)
Purchased coffee and biscuits from Woods Supermarket for use by staff for $220 including GST.
3
(Cheque 267407)
4 Cash sales of entertainment services, $1,980 including GST. (Receipt 002)
5 Credit sale of party supply goods to Mary Hubbard, $1,300 plus GST. (Invoice 146)
6 Received $1,500 from Hamlin Primary School for May account. (Receipt 003)
7 Paid telephone company $253 including GST for telephone. (Cheque 267408)
8 Received $440 from Grim & Grim for May account. (Receipt 004)
Transaction analysis chart
No Date Name of account A, L, OE, Increase (Ç) / Debit (DR) Amount

affected R or E Decrease (È) Credit (CR) DR________CR
1 July 2 Office Supplies E DR 140
GST Control L DR 14
FirstBank A CR 154
2 July 2 FirstBank A DR 100
Customer Deposits L CR 100
3 July 2 Staff Amenities E DR 200
GST Control L DR 20
FirstBank A CR 220
4 July 2 FirstBank A DR 1,980
GST Control L CR 180
Sales - Services R CR 1,800
8
No Date Name of account A, L, OE, Increase (Ç) / Debit (DR) Amount

affected R or E Decrease (È) Credit (CR) DR________CR
5 July 2 Debtors Control A DR 1,430
GST Control L CR 130
Sales - Merchandise R CR 1,300
6 July 2 FirstBank A DR 1,500
Debtors Control A CR 1,500
7 July 2 Telephone E DR 230
GST Control L DR 23
FirstBank A CR 253
8 July 2 FirstBank A DR 440
Debtors Control A CR 440
9
3.H. Written task: Review

1 Why would you produce a balance sheet?
To determine the financial position and net value of the business at a particular
point in time.
____________________________________________________________
____________________________________________________________
2 What is owners’ equity?
The net value of the business (A - L) . The value that the business itself owes the
owner of the business.
____________________________________________________________
____________________________________________________________
3 How would you calculate owners’ equity?

Assets minus Liabilities ( A - L)
____________________________________________________________
____________________________________________________________
4 Why would you generate a profit and loss statement?
To determine if the business is making a profit or loss for a particular period.
____________________________________________________________
____________________________________________________________
5 How do you calculate a company’s financial position?

Produce balance sheet. Assets equals Liabiliies plus Owner’s Equity (A = L + OE)
____________________________________________________________
____________________________________________________________
10
4. Business Transactions & Source Documents

4.A. Written task: Source documents
1 Specify the relevant source document for each of the transactions listed in the table below.
Transaction Business Document
Purchase of a motor vehicle for $3,000 cash Cheque Butt/receipt (plus Bank
Statement if electronic transfer/credit
card)
Sale of stock on credit Tax Invoice
Purchase of stock on credit Tax Invoice
Payment of wages to employees in cash Cheque Butt
Cash withdrawn by the owner from the Cheque Butt

business bank account for personal use
Cash sale return of $30 Adjustment Note
Cash deposited into the business bank Bank Deposit Slip/Bank Statement
account from the owner’s personal account
$5,000 borrowed from FirstBank Bank Statement (Loan Account)
Cash sale of stock Receipt
Cash purchase of stock Receipt
11
5. Journals
5.A. Written task: Journals
1 Enter the appropriate journals in the following table for each transaction.
Transaction Journal
Credit sale of trading stock SJ
Debtor, Peg Silver received a discount for damaged goods delivered SRJ
Received an allowance from creditor for damaged goods supplied. PRJ
Stock item bought on credit PJ
Inventories returned by debtor SRJ
Sold goods to Cindy Charming on credit SJ
Purchased stock from Bulk Supplies on credit PJ
Returned faulty goods purchased on credit PRJ
5.B. Written task: Post transactions to the sales journal

1 Enter the following two Child’s Play transactions into the sales journal in “The Child’s Play
Credit Journals” on page 35:
TAX INVOICE TAX INVOICE
Child’s Play Invoice No: 146 Child’s Play Invoice No: 147
ABN: 43 076 039 889 Date: 2 July 2014 ABN: 43 076 039 889 Date: 13 July 2014
To: Mary Hubbard To: Cindy Charming
Description Total Description Total
Merchandise $1,430 Merchandise $374
TOTAL PRICE INCLUDES GST $1,430 TOTAL PRICE INCLUDES GST $374
12
5.C. Written task: Post transactions to the sales returns and

allowances journal
1 Enter the following Child’s Play transactions into the sales returns and allowances journal in
“The Child’s Play Credit Journals” on page 35:
ADJUSTMENT NOTE ADJUSTMENT NOTE

Child’s Play ABN: 43 076 039 889 Child’s Play ABN: 43 076 039 889
No: 151 Hamlin No: 152

Customer Peg Silver Customer
Date: 16 July 2014 Primary School Date: 16 July 2014
DESCRIPTION TOTAL $ DESCRIPTION TOTAL $

Return of 2 pinatas and other 220.00 Returned faulty goods 88.00
items
AMOUNT REFUNDED INCLUDING GST $220.00 AMOUNT REFUNDED INCLUDING GST $88.00
5.D. Written task: Post transactions to the purchases journal

1 Enter the following Child’s Play transactions into the purchases journal in “The Child’s Play
Credit Journals” on page 35:
Baloon World Invoice No: 101 Smashing Invoice No: D759
ABN: 43 076 039 222 Date: 1 July 2014 Pinatas Date: 1 July 2014
ABN: 43 076 039 333
To: Child’s Play
To: Child’s Play
Description Total
Description Total
Merchandise $132
Merchandise $660
TOTAL PRICE INCLUDES GST $132

5.E. Written task: Post transactions to the purchases returns

and allowances journal
1 Enter the following Child’s Play transactions into the purchases returns and allowances
journal in “The Child’s Play Credit Journals” on page 35:
ADJUSTMENT NOTE ADJUSTMENT NOTE
Balloon World ABN: 43 076 039 222 Smashing Pinatas ABN: 43 076 039 333
No: Z87 No: 47

Customer Child’s Play Customer Child’s Play
Date: 5 July 2014 Date: 5 July 2014
DESCRIPTION TOTAL $ DESCRIPTION TOTAL $

Allowance for return of faulty goods 110 Return of 9 pinatas 220
AMOUNT REFUNDED INCLUDING GST $110 AMOUNT REFUNDED INCLUDING GST $220
13
5.F. Written task: Review — posting credit transactions

Child’s Play’s credit transactions for July
1 TAX INVOICE 2 TAX INVOICE 3 TAX INVOICE

Gingerbread Invoice No: 250 Child’s Play Invoice No: 148 Child’s Play Invoice No: 149
House Date: 5 July 2014 ABN: 43 076 039 889 Date: 13 July 2014 ABN:43 076 039 889 Date: 15 July 2014
ABN:43 076 039 555
To: Peg Silver To: Forest Primary School
To: Child’s Play
Description Total
Service $110 Entertainment Services $297
Merchandise $165
Merchandise $110
TOTAL PRICE INCLUDES GST $165 TOTAL PRICE INCLUDES GST $407
4 TAX INVOICE 5 TAX INVOICE TAX INVOICE

6
Child’s Play Invoice No: 150 Child’s Play Invoice No: 153 Child’s Play Invoice No: 154
ABN: 43 076 039 889 Date: 15 July 2014 ABN: 43 076 039 889 Date: 16 July 2014 ABN:43 076 039 889 Date: 16 July 2014
To: Hamlin Primary School To: Forest Primary School To: Peg Silver
Description Total Description Total Description Total
Entertainment & party $1,650 Party supplies $1,320 Party supplies $220
hire Services
TOTAL PRICE INCLUDES GST $1,650
TOTAL PRICE INCLUDES GST $1,320 TOTAL PRICE INCLUDES GST $220
TAX INVOICE ADJUSTMENT NOTE TAX INVOICE

7 8 9
Child’s Play Invoice No: 155 Child’s Play Peter Piper’s Invoice No: 234
ABN: 43 076 039 889 Date: 16 July 2014 ABN: 43 076 039 889 Party Supplies Date: 18 July
To: Cindy Charming Mary No: 156 ABN: 43 076 039 444 2014
Customer
Hubbard Date: 16 July 2014 To: Child’s Play
Description Total
DESCRIPTION TOTAL $ Description Total
Entertainment & party $440
hire Services Return of faulty merchandise $55 Party supplies $1,540
TOTAL PRICE INCLUDES GST $440 AMOUNT REFUNDED INCLUDING GST $55 TOTAL PRICE INCLUDES GST $1,540
10 TAX INVOICE 11 TAX INVOICE 12 TAX INVOICE 13 TAX INVOICE

Balloon Invoice No: 298 Gingerbread Invoice No:185 Invoice No: 48 Invoice No: 84
World Date: 18 July 2014 House Everafter Smashing
Date: 23 July Date: 28 July 2014 Date: 28 July 2014
Toys Pinatas
ABN: 43 076 039 222 ABN:43 076 039 555 2014 ABN: 43 076 039 666 ABN: 43 076 039 333
To: Child’s Play To: Child’s Play To: Child’s Play To: Child’s Play
Description Total Description Total Description Total Description Total
goods $165 goods $22 goods $88 Pinatas $440
TOTAL PRICE INC GST $165 TOTAL PRICE INCL GST $22 TOTAL PRICE INC GST $88 TOTAL PRICE INC GST $440
14
1 Identify the appropriate journal for each of the previous transactions:
Transaction number Journal
1 PJ
2 SJ
3 SJ
4 SJ
5 SJ
6 SJ
7 SJ
8 SRJ
9 PJ
10 PJ
11 PJ
12 PJ
13 PJ
2 Post the transactions to their appropriate journals in “The Child’s Play Credit Journals” on
page 35.
3 Total all journals at the end of the month.
15
5.G. Written task: Post transactions to the cash receipts

journal
1 Enter the following transactions into the cash receipts journal for Child’s Play in “The Child’s
Play Cash Journals” on page 37:
NOTE: All transactions are inclusive of GST.
Child’s Play Receipt No. 001 Child’s Play Receipt No. 002 Child’s Play Receipt No. 003
ABN: 43 076 039 889 Date: ABN: 43 076 039 889 Date: ABN: 43 076 039 889 Date:
Received Received Received

from: from: from:
The Sum of: The Sum of: The Sum of:

Details: Details: Details:
Child’s Play Receipt No. 004 Child’s Play Receipt No. 006 Child’s Play Receipt No. 008
ABN: 43 076 039 889 Date: ABN: 43 076 039 889 Date: ABN: 43 076 039 889 Date:
Received Received Received

from: from: from:
The Sum of: The Sum of: The Sum of:

Details: Details: Details:
Child’s Play Receipt No. 009

Bank cheque for interest received
ABN: 43 076 039 889 Date:
LastBank 13/ 7/2014
Received
Pay:
from:
or bearer
The Sum of: The sum of: $250
Details:
000301 719000 001335 Last Bank
16
5.H. Written task: Post transactions to the cash payments

journal
1 Using the Child’s Play accounts list at the beginning of your workbook, enter the following
Child’s Play transactions into the cash payments journal in “Cash Payments Journal” on
page 38:
NOTE: The following transactions are inclusive of GST.
FirstBank FirstBank FirstBank

Date Date Date
To To To
For For For
Amount Amount Amount
‘267405’ ‘267406’ ‘267407’
17
5.I. Written task: Review — post cash transactions to journals

Child’s Play cash transactions for July (The following transactions are inclusive of GST).
1 FirstBank 2 Child’s Play Receipt No. 010 3 FirstBank

Date Date: Date
To Received To
from:
For For
The Sum of:
Amount Amount
Details:
‘267408’ ‘267409’
FirstBank FirstBank
18/7/2014 Date Date

4 5 6
To To
Paid Everafter Insurance
$275 (including GST) for
For For
insurance – July by direct
debit. Amount
Amount
‘267410’ ‘267411’
Bank cheque for interest payment
Child’s Play Receipt No. 011
FirstBank 25/ 7/2014 8
Date:
Pay:
7 Received
or bearer from:
The sum of: $100
The Sum of:
‘12345’ FirstBank
Details:
Child’s Play Receipt No. 012 Child’s Play Receipt No. 013 11 FirstBank 12 FirstBank
9 Date: 10 Date: Date Date
To To
Received Received
from: from:
For For
The Sum of: The Sum of:
Details: Details: Amount Amount

‘267412’ ‘267413’
18
1 Identify the appropriate journal for each of the transactions.
Transaction number Journal
1 CPJ
2 CRJ
3 CPJ
4 CPJ
5 CPJ
6 CPJ
7 CRJ
8 CRJ
9 CRJ
10 CRJ
11 CPJ
12 CPJ
2 Post the transactions to their appropriate journals in “The Child’s Play Cash Journals” on
page 37.
3 Total the journals at the end of the month.
5.J. Written task: Post transactions to the general journal

1 In the “General Journal” on page 39 of this workbook, complete the general journal for the
following transactions up to 31 July (use Child’s Play’s accounts list at the beginning of your
workbook):
2014
July 1 Jackie & Jill Childs commenced the business with the following assets and liabilities:
• FirstBank $9,564 • Motor Vehicle $26,180

• Debtors’ Control $5,346 • Creditors’ Control $1,650
• LastBank Term Deposits $10,000 • Loans – FirstBank $30,000
• Party Supply Items Inventory $1,900 • Partner A Capital $20,594
• Hire Equipment at Cost $16,000 • Partner B Capital $20,594
• Office Equipment at Cost $3,848
Note: The general journal for the opening balance has been completed.
July 31 Cindy Charming’s debt of $440, including GST, will be written off as bad debt.
Depreciation of $1,000 for motor vehicle.
19
5.K. Written task: Review — post David Wong’s transactions

to the general journal
1 Record the following transactions, into the general journal for the first month of operation:
David Wong commenced trading as a retailer of office supplies on 1 May 2014.
1 May Commenced business with the following assets and liabilities:

• cash at bank $4,500
• office equipment $7,100
• premises $32,000
• loan from MiddleBank $25,000
• capital - David Wong $
Hint: To work out the capital amount ensure the accounting equation A=L+OE balances.
31 Late payment fee on overdue account by creditor Bulk Suppliers $110 (assume fee
is including GST).
Depreciation of $100 for Office Equipment.
General Journal
Date Particulars Debit $ Credit $
May 1 Cash at Bank 4,500
Office Equipment 7,100
Premises 32,000
Loan from MiddleBank 25,000
Capital - David Wong 18,600
Assets introduced by owner to commence business
May 5 Interest expense 100
GST Control 10
Creditors 110
Late Payment fee Charged on Overdue Account - Bulk Suppliers
May 31 Depreciation 100
Office Equipment - Accumulated 100

Depreciation
Depreciation on Office Equipment
20
6. Posting Transactions to the General Ledger

6.A. Written task: Post the SJ to the general ledger
Example
Sales journal
The following example is the sales journal for June for Smith’s Electronics. At the end of the month
this journal was ruled-off and the columns totalled. These totals are now ready to be posted to the
general ledger.
Date Invoice Debtor Sales – Sales – GST Debtors’

No Services $ Merchandise $ Control $ Control $
2014 June 2 143 Zapped United 500 50 550
18 144 Bill Nash 160 16 176
23 145 Jim Rod 180 18 198
28 146 City Discount 520 52 572
Totals 700 660 136 1496
1 The Sales - Services and the Sales - Merchandise columns of the SJ get posted to the general
ledger in the Sales - Services and Sales - Merchandise accounts respectively. Work out
whether these amounts should be a debit or a credit and post to the ledger below.
Sales - Merchandise Account A/c No 4.02

Date Particulars Folio Debit Credit Balance $
June 30 Debtors Control SJ 660 660 CR
Sales - Services Account A/c No 4.01

June 30 Debtors Control SJ 700 700 CR
21
6.B. Written task: Post the SRJ to the general ledger
Example
Sales returns and allowances journal
The following example is the sales returns and allowances journal for Smith’s Electronics
for June. At the end of the month this journal was ruled-off and the columns totalled.
These totals are now ready to be posted to the general ledger.
Date Adjustment Note Debtor Sales – Returns $ GST Control $ Debtors’ Control $
2014 June 2 148 Lazy Video 450 45 495
23 149 Bill Nash 160 16 176
Totals 610 61 671
1 The Sales - Returns column of the SRJ gets posted to the general ledger in the Sales
Returns and Allowances account. Work out whether this amount should be a
debit or credit and post to the general ledger account below.
Tip: if you’re unsure you can check the account type by looking in the chart of accounts for Child’s
Play located in the front pages of the workbook.
Sales Returns and Allowances Account A/c No 4.04
June 30 Debtors Control SRJ 610 610 DR
6.C. Written task: Post the PJ to the general ledger
Example
Purchases journal
The following example is the purchases journal for Smith’s Electronics for June. At the end
of the month this journal was ruled-off and the columns totalled. These totals are now
ready to be posted to the general ledger.
Date Invoice No Creditor Purchases $ GST Control $ Creditors’ Control $
2014 June 2 97 AGC Supplies 360 36 396
13 98 Widgets inc 420 42 462
19 99 XYZ Energy 210 21 231
26 100 Fuse World 680 68 748
Totals 1,670 167 1,837
1 The Purchases column of the PJ gets posted to the general ledger in the Purchases
account. Work out whether this amount should be a debit or a credit and post to
the ledger below.
Purchases Account A/c No 5.07
30 June Creditors Control PJ 1,670 1,670 DR
22
6.D. Written task: Post the PRJ to the general ledger
Example
Purchases returns and allowances journal
The following example is the purchases returns and allowances journal for Smith’s Electronics for
June. At the end of the month this journal was ruled-off and the columns totalled. These totals are
now ready to be posted to the general ledger.
Date Adjustment Creditor Purchases – GST Creditors’

Note Returns$ Control $ Control $
2014 June 2 22 AGC Supplies 280 28 308
15 23 Widgets inc 420 42 462
Total 700 70 770
2 The Purchases Returns column of the PRJ gets posted to the general ledger in the Purchases
Returns and Allowances account. Work out whether this amount should be a debit or a
credit and post to the ledger below.
Purchases Returns and Allowances Account A/c No 5.08
30 June Creditors Control PRJ 700 700 CR
23
6.E. Written task: Post the CRJ to the general ledger
Example
Cash receipts journal
The following example is the cash receipts journal for Smith’s Electronics for June. At the end of the
month this journal was ruled-off and the columns totalled. These totals are now ready to be posted
to the general ledger.
Date Particulars Rec No Debtors’ Sales – Sales- Sundries GST FirstBank

control Services Merchandise Control
2014 Jim Rod 96 120 120

June 2
8 Bill Nash 97 60 6 186
12 City Discounts 98 350 35 571
20 Interest revenue 99 100 671
28 Zapped United 100 550 1,221
Total 670 350 60 100 41 1,221
1 The Sales - Services and Sales - Merchandise columns in the CRJ get posted to the Sales -
Services and Sales - Merchandise accounts in the general ledger respectively. Amounts
in the Sundries column get posted to appropriate accounts, depending on what the amount
is for, in this case interest revenue. Work out whether these amounts should be debits or
credits and post to the ledger below.
Sales - Services A/c No 4.01
30 June FirstBank CRJ 350 350 CR
Sales - Merchandise A/c No 4.02
Interest revenue A/c No 4.05
24
6.F. Written task: Post the CPJ to the general ledger
Example
Cash payments journal
The following example is the cash payments journal for Smith’s Electronics for June. At the end
of the month this journal was ruled-off and the columns totalled. These totals are now ready to
be posted to the general ledger.
Date Particulars Cheque Creditors’ Cash Sundries GST FirstBank

No control Purchases Control
2014 XYZ Energy 267399 200 200

June 2
6 Office Supplies 267400 230 23 253
15 Widgets inc 267401 120 12 132
27 AGC Supplies 267402 396 396
Total 596 120 230 35 981
1 The Cash Purchases column in the CPJ get posted to the Purchases account in the
general ledger. Amounts in the Sundries column get posted to appropriate accounts,
depending on what the amount is for. Work out whether these amounts should be debits
or credits and post to the ledger below.
Purchases A/c No 5.06
30 June FirstBank CPJ 120 120 DR
Office Supplies A/c No 5.04
30 June FirstBank CPJ 230 230 DR
25
6.G. Written task: Review — post all Child’s Play

journals for July to the general ledger
1 Take the Child’s Play July totals for each journal that you completedin “The Child’s
Play Credit Journals” on page 35, “The Child’s Play Cash Journals” on page 37 and
the “General Journal” on page 39, and post them to the general ledger “The
Child’s Play General Ledger” on page 41.
Note: the opening balances from the general journal have already been posted.
6.H. Written task: Trial balance

1 Complete the “Trial Balance” on page 45 based on the accounts in Child’s Play’s
general ledger you completed on page 41, as at 31 July 2014.
6.I. Written task: Profit & Loss, and Balance Sheet

Using the figures from the trial balance you completed for Child’s Play up to July 31st,
complete the following tasks:
1 Prepare the “Profit and Loss Statement” on page 46.
2 Prepare Child’s Play Balance Sheet on page 47 as at July 31st.
26
7. Subsidiary Ledgers: Debtors

7.A. Written task: Post totals to the debtors’ control account
and transaction details to the debtors’ subsidiary ledger
Example: : Waugh Brothers Pty Ltd

The following are the journals containing the individual debtor transactions for the month of
August.
Relevant journals for August 2014
Sales Journal
Date Invoice No Debtor Folio Sales GST Debtors’

$ Control $ Control $
2014 212 G Chappel CUS1 120 12 132

Aug 5
14 213 D Jones CUS2 150 15 165
18 214 S Warne CUS3 160 16 176
27 215 D Jones CUS2 200 20 220
Totals 630 63 693
Sales Returns and Allowances Journal

Date Adjustment Debtor Folio Sales GST Debtors’
Note Returns $ Control $ Control $
2014 60 D Jones CUS2 30 3 33
Aug 15
19 61 S Warne CUS3 40 4 44
Totals 70 7 77
Cash Receipts Journal

Date Particulars Folio Rec Debtors’ Cash Sundries GST Bank
No control Sales Control
2014
Aug 7 G Chappel CUS1 500 100 100
20 S Warne CUS3 501 50 50
25 Capital 502 2,000 2,000
27 Cash Sales 503 300 30 330
29 Cash Sales 504 330 33 363
Totals 150 630 2,000 63 2,843
27
Task 1 — Complete the debtors’ control account

From the journals in the Waugh Bros example above, post the total of the Debtors’ Control column,
to the Debtors’ Control account.
Debtors’ Control Account
Aug 1 Balance 618 DR
31 Sales & GST SJ 693 1,311 DR
Sales Returns & GST SRJ 77 1,234 DR
Bank CRJ 150 1084 DR
Task 2 — Post the transactions to the creditors’ subsidiary ledger

From the journals in the Waugh Bros example above, post the individual transactions to the relevant
debtors’ subsidiary ledger.
The Debtors’ Subsidiary ledger
CUS1 G Chappel Account
2014
5 Sales & GST SJ 132 282 DR
7 Bank CRJ 100 182 DR
CUS2 D Jones Account

2014
15 Sales Returns & GST SRJ 33 482 DR
CUS3 S Warne Account

2014
19 Sales Returns & GST SRJ 44 250 DR

20 Bank CRJ 50 200 DR
NOTE
Transactions in debtors’ accounts should be entered in chronological order. In the Folio column
in the subsidiary ledger, record the journal from which the transaction was posted.
28
7.B. Written task: Reconcile the debtors’ subsidiary ledger

1 Complete the table to reconcile the debtors subsidiary ledger with the Debtors Control
account you completed in the previous task.
Debtors’ Reconciliation as at 31 August 2014
Account No Name Balance $
CUS1 G Chappel 182 DR
CUS2 D Jones 702 DR
CUS3 S Warne 200 DR
Total as per Debtors’ Control account 1084 DR
The total of debtors’ balances from the subsidiary ledger as at 31 August 2014 should agree with
the balance of the Debtors’ Control account in the general ledger.
7.C. Written task: Review — prepare the debtors’ subsidiary

ledger for Child’s Play
The following information relates to Child’s Play.
Debtors’ Balances at 1 July 2014
CUS1 Hamlin Primary School 2,728
CUS2 Eve Gold 440
CUS3 Grim & Grim 1,826
CUS4 Cindy Charming 352
TOTAL $5,346
Complete the following tasks:

1 Complete the debtors’ control account for the end of July. (You should have already
completed this as part of the task to prepare the General Ledger for Childs’ Play for July
2014).
2 Complete the subsidiary ledger for each debtor.
Based on the sales, sales returns and allowances (“The Child’s Play Credit Journals” on
page 35), cash receipts (“The Child’s Play Cash Journals” on page 37), and general journals
(“General Journal” on page 39) you completed for the period 1 July to 31 July 2014, enter all
transactions into the subsidiary ledger for each debtor in “Debtors’ Subsidiary Ledger” on
page 48.
3 Reconcile the subsidiary ledger with the debtors’ control account.
To do this copy accross the balance of the debtors’ control account, and the balances for each
debtor to the table “Debtors’ Reconciliation as at 31 July 2014” on page 49.
29
8. Subsidiary Ledgers: Creditors

8.A. Written task: Post transactions to the creditors’ control
account and creditors’ subsidiary ledger
Example: Waugh Brothers Pty Ltd

The following are the journals containing the individual creditor transactions for the month of August.
Relevant journals for August 2014
Purchases Journal
Date Invoice Creditor Purchases $ GST Creditors’
No Control$ Control $
2014 280 Martin Office Supplies 150 15 165
Aug 4
5 1478 Fleming Sports Galore 300 30 330
11 V36 Marsh Advertising 250 25 275
H88 A Gilchrist 200 20 220
18 1500 Fleming Sports Galore 240 24 264
27 300 Martin Office Supplies 210 21 231
Totals 1,350 135 1,485
Purchases Returns and Allowances Journal

Date Invoice Creditor Purchases GST Creditors’
No Returns $ Control $ Control $
2014
Aug 6 98 Fleming Sports Galore 50 5 55
13 N77 A Gilchrist 80 8 88
Totals 130 13 143
Cash Payments Journal

Date Particulars Cheque Creditors’ Cash Sundries GST Bank
No control Purchases Control
2014 Marsh Advertising 510 300 300
Aug 5
6 Fleming Sports Galore 511 250 250
Wages 512 200 200
11 Purchases 513 150 15 165
19 Repairs 514 100 10 110
20 A Gilchrist 515 264 264
29 Donations 516 50 50
Totals 814 150 350 25 1,339
30
Task 1 — Complete the creditors’ control account

From the journals in the Waugh Bros example, post the total of the Creditors’ Control column, to
the Creditors’ Control account.
202 Creditors’ Control Account
2014
Aug 1 Balance 1,342 CR
31 Purchase & GST PJ 1,485 2,827 CR
Purchase Returns & GST PRJ 143 2,684 CR
Bank CPJ 817 1,870 CR
Task 2 — Post the transactions to the creditors’ subsidiary ledger

From the journals in the Waugh Bros example, post the individual transactions to the relevant
creditors’ subsidiary ledger.
The Creditors’ Subsidiary ledger
SUP1 Martin Office Supplies
2014
Aug 1 Balance 220 CR
4 Purchase & GST PJ 165 385 CR
SUP2 Fleming Sports Galore

2014
Purchases Returns & GST PRJ 55 715 CR
Bank CPJ 250 465 CR
Purchase & GST PJ 264 729 CR
31
SUP3 A Gilchrist
2014
11 Purchases & GST PJ 220 352 CR
13 Purchases Returns & GST PRJ 88 264 CR
20 Bank CPJ 264 0
SUP4 Marsh Advertising

2014
5 Bank CPJ 300 250 CR
Task 3 — Complete the Creditors’ Reconciliation as at 31 August

2014
SUP1 Martin Office Supplies 616 CR
SUP2 Fleming Sports Galore 729 CR
SUP4 Marsh Advertising 525 CR
Total as per Creditors’ Control account 1,870 CR
32
8.B. Written task: Review — prepare the July creditors

subsidiary ledger for Child’s Play
The following information relates to Child’s Play.
List of creditors at 1 July 2014

C1 Balloon World 0
C2 Ethan’s Costume Warehouse 660
C3 Everafter Toys 220
C4 Gingerbread House 110
C5 Peter Piper’s Party Supplies 660
C6 Smashing Pinatas 0
Total 1,650

1 Complete the creditors’ control account for the end of July. (You should have already
completed this as part of the task to prepare the General Ledger for Childs’ Play for July
2014).
2 Complete the subsidiary ledger for each creditor.
Based on the purchases, purchases returns and allowances (“The Child’s Play Credit
Journals” on page 35), cash payments (“The Child’s Play Cash Journals” on page 37), and
general journals (“General Journal” on page 39) you completed in this workbook for the
period 1 July to 31 July 2014, enter all transactions into the subsidiary ledger for each creditor
in the “Creditors’ Subsidiary Ledger” on page 50.
3 Reconcile the subsidiary ledger with the creditors’ control account.
To do this copy accross the balance of the creditors’ control account, and the balances for
each debtor to the table “Creditors’ Reconciliation as at 31 July 2014” on page 51.
33
34
Child’s Play Exercise - July 2014

The Child’s Play Credit Journals
NOTE
Transactions should be entered in date order.
Sales Journal
Date Invoice Debtor Sales – Sales – GST Debtors’
No Services $ Merchandise $ Control$ Control $
2014 146 Mary Hubbard 1,300 130 1,430

July 2
13 147 Cindy Charming 340 34 374
148 Peg Silver 100 10 110
15 149 Forest Primary School 270 100 37 407
150 Hamlin Primary School 1,500 150 1,650
16 153 Forest Primary School 1,200 120 1,320
154 Peg Silver 200 20 220
155 Cindy Charming 400 40 440
Totals 2,270 3,140 541 5,951
Sales returns and allowances journal

Date Adjustment Debtor Sales GST Debtors’
Note Returns $ Control $ Control $
2014 151 Peg Silver 200 20 220

July 16
152 Hamlin Primary School 80 8 88
156 Mary Hubbard 50 5 55
Totals 330 33 363
35
Purchases journal
Date Invoice No Creditor Purchases GST Creditors’
$ Control $ Control $
2014 July 1 101 Balloon World 120 12 132
D759 Smashing Pinatas 600 60 660
July 5 250 Gingerbread House 150 15 165
18 234 Peter Piper’s Party Supplies 1,400 140 1,540
298 Balloon World 150 15 165
23 185 Gingerbread House 20 2 22
28 48 Everafter Toys 80 8 88
84 Smashing Pinatas 400 40 440
Totals 2,920 292 3,212
Purchases returns and allowances journal

Date Adjustment Creditor Purchases GST Creditors’
No Returns Control $ Control
$ $
2014 Z87 Balloon World 100 10 110

July 5
47 Smashing Pinatas 200 20 220
Totals 300 30 330
36
The Child’s Play Cash Journals
Cash receipts journal
Date Particulars Rec No Debtors’ Sales – Sales- Sundries GST FirstBank

control Services Merch Control
2014 Forest Primary 001 100

July 2 School
Cash Sales 002 200 20
Grim & Grim 003 1,500
Eve Gold 004 440 2,260
July 13 Peg Silver 006 50
Scarlet Hood 008 30 3
Hamlin Primary 009 1,947

School
Interest revenue Cheque/ 250 2,280

1335
July 15 Forest Primary 010 407 407

School
July 25 Interest revenue 12345 100
Hamlin Primary 011 1,000

School
Peg Silver 012 60
Cindy Charming 013 726 1,886
Totals 6,230 200 30 350 23 6,833
*Where there is no specific column provided for a transaction, the Sundries column is used.
NOTE
The Particulars column records the name of the ledger account/accounts affected by the
receipt, or the debtor’s name in the case of debtor receipts.
Most businesses bank their daily takings once a day. For this reason, entries in the Bank
column represent the total received for each day.
37

Date Particulars Cheque Creditors Cash Sundries GST FirstBank
No ’ control Purchases Control
2014 Peter Piper’s Party Supplies 267405 2,200 2,200

July 2
Office Supplies 267406 140 14 154
Staff Amenities 267407 200 20 220
Telephone 267408 230 23 253
Jul Repairs & Maintenance 267409 200 20 220

16
18 Insurance DD 250 25 275
20 Ethan’s Costume Warehouse 267410 660 660
25 Gingerbread House 267411 682 682
31 Everafter Toys 267412 308 308
Wages 267413 770 770
Totals 3,850 0 1,790 102 5,742
* Transactions that are entered in the Sundries column must be posted to individual ledger
accounts as listed in the Particulars column.
38
General Journal
Date Particulars Debit $ Credit $
2014
Note: In a July 1 First Bank 9,564
general
journal the Debtors’ Control 5,346
narration LastBank Term Deposits 10,000
sits at the
end of the Party Supplies Inventory 1,900
transaction Hire Equipment 16,000
to which it
refers. Office Equipment 3,848
Motor Vehicles 26,180
Creditors’ Control 1,650
Loans FirstBank 30,000
Partner A Capital 20,594
Partner B Capital 20,594
Assets introduced by owner to commence business
31 Bad Debts Expense 400
GST Control 40
Debtors Control 440
Bad debt written off - Cindy Charming
31 Depreciation 1,000
M/V - Accumulated Depreciation 1,000
Depreciation of Motor Vehicles
39
40
The Child’s Play General Ledger
FirstBank Account
Date Particulars Folio Debit Credit Running Balance $
Jul-01 Opening Balance GJ 9,564 9,564 DR
Jul - 31 Cash Receipts CRJ 6,833 16,397 DR
Cash Payments CPJ 5,742 10,655 DR
LastBank Term Deposits
Debtors’ Control
Jul-31 Sales & GST SJ 5,951 11,297 DR
Sales Returns & GST SRJ 363 10,934 DR
FirstBank CRJ 6,230 4,704 DR
Bad Debts Expense & GST GJ 440 4,264 DR
Party Supplies Inventory
Hire Equipment @ Cost
Office Equipment at Cost
41
Office Equipment - Accumulated Depreciation
Jul-01
Motor Vehicles at Cost
M/V - Accumulated Depreciation
Jul-31 Depreciation GJ 1,000 1,000 CR
Creditors’ Control
Jul-01 Opening Balance GJ 1,650 1,650 CR
Jul-31 Purchases & GST PJ 3,212 4,862 CR
Purchases Returns & GST PRJ 330 4,532 CR
FirstBank CPJ 3,850 682 CR
GST Control
Jul-31 Debtors Control SJ 541 541 CR
Debtors Control SRJ 33 508 CR
Creditors Control PJ 292 216 CR
Creditors Control PRJ 30 246 CR
FirstBank CRJ 23 269 CR
FirstBank CPJ 102 167 CR
Debtors Control GJ 40 127 CR
Loans - FirstBank
42
Capital Partner A
Capital Partner B
Sales - Services
Jul-31 Debtors Control SJ 2,270 2,270 CR
FirstBank CRJ 200 2,470 CR
Sales - Merchandise
Jul-31 Debtors Control SJ 3,140 3,140 CR
FirstBank CRJ 30 3,170 CR
Sales Returns & Allowances
Jul-31 Debtors Control SRJ 330 330 DR
Interest Revenue
Jul-31 FirstBank CRJ 350 350 CR
Purchases
Jul-31 Creditors Control PJ 2,920 2,920 DR
Purchases Returns
Jul-31 Creditors Control PRJ 300 300 CR
43
Insurance
Jul-31 FirstBank CPJ 250 250 DR
Office Supplies
Repairs & Maintenance
Staff Amenities
Telephone
Wages
Depreciation
Jul -31 M/V - Accumulated Depreciation GJ 1,000 1,000 DR
Bad Debts
Jul - 31 Debtors’ Control GJ 400 400 DR
44
Trial Balance
Childs Play
Trial Balance as at 31 July 2014
Account title Debit Credit
FirstBank 10,655
LastBank Term Deposits 10,000
Debtors’ Control 4,264
Hire Equipment at Cost 16,000
Office Equipment at cost 3,848
M/V - Accumulated Depreciation 1,000
Creditors’ Control 682
GST Control 127
Loans - FirstBank 30,000
Capital Partner A – Jackie Childs 20,594
Capital Partner B – Jill Childs 20,594
Sales - Services 2,470
Sales - Merchandise 3,170
Sales returns and allowances 330
Interest revenue 350
Purchases 2,920
Purchases returns and allowances 300
Insurance 250
Office supplies 140
Repairs & maintenance 200
Staff Amenities 200
Telephone 230
Wages 770
Depreciation 1,000
Bad Debts 400
Total 79,287 79,287
45
Profit and Loss Statement
Profit & Loss Statement

(Statement of Financial Performance)
For period ending 31 July 2014
Revenue
Sales Services 2,470
Sales - Merchandise 3,170
Sales Returns & Allowances (330)
Interest Revenue 350
Total Revenue $5,660
Less Expenses
Purchases 2,920
Purchases Returns (300)
Wages 770
Repairs & Maintenance 200
Office Supplies 140
Staff Amenities 200
Telephone 230
Depreciation 1,000
Insurance 250
Bad Debts 400
Total Expenses $ 5,810
Net Profit/(Loss) $ (150)
46
Balance Sheet
Balance Sheet
(Statement of Financial Position)
as at 31 July 2014
Assets
FirstBank 10,655
Term Deposits - LastBank 10,000
Debtors Control 4,264
Hire Equipment 16,000
Office Equipment 3,848
M/V - Accumulated Depreciation (1,000)
Total Assets $ 71,847

Less Liabilities
Creditors Control 682
GST Control 127
Loans - FirstBank 30,000
Total liabilities $ 30,809
Net Assets $ 41,038
Owners’ Equity
Capital - Partner A - Jill Childs 20,594
Capital - Partner B - Jackie Childs 20,594
Current Earnings Profit/(Loss) (150)
Owners’ Equity $ _41,038_
47
Debtors’ Subsidiary Ledger
Hamlin Primary School
Date Particulars Folio DR CR Balance
Jul-01 Balance 2,728 DR
Jul-13 FirstBank CRJ 1,947 781 DR
Jul-16 Sales Returns & GST SRJ 88 2,343 DR
Jul-25 FirstBank CRJ 1,000 1,343 DR
Eve Gold
Jul-01 Balance 440 DR
Jul-2 FirstBank CRJ 440 0 DR
Grim & Grim
Jul-01 Balance 1,826 1,826 DR
Jul-2 FirstBank CRJ 1,500 326 DR
Cindy Charming
Jul-01 Balance 352 DR
Jul-13 Sales & GST SJ 374 726 DR
Jul-16 Sales & GST SJ 440 1,166 DR
Jul-31 Bad Debts & GST GJ 440 0
Forest Primary School
Jul-16 Sales & GST S 1,320 1,727 DR
Jul-2 FirstBank CRJ 100 1,627 DR
Jul-15 FirstBank CRJ 407 1,220 DR
48
Peg Silver
FirstBank CRJ 50 60 DR
Sales Returns & GST SRJ 220 60 DR
Mary Hubbard
Jul-16 Sales Returns & GST SRJ 55 1,375 DR
Debtors’ Reconciliation as at 31 July 2014
Hamlin Primary School 1,343 DR
Eve Gold 0 DR
Grim & Grim 326 DR
Cindy Charming 0 DR
Forest Primary School 1,220 DR
Peg Silver 0 DR
Mary Hubbard 1,375 DR
Debtors’ Control Account as @ 31 July 4,264 DR
49
Creditors’ Subsidiary Ledger
Balloon World
Purchases & GST PJ 132 132 CR
Purchases Returns & GST PRJ 110 187 CR
Ethan’s Costume Warehouse

2014
Jul-01 Opening Balance PJ 660 CR
20 FirstBank CPJ 660 0
Everafter Toys
2014
31 FirstBank CPJ 308 0
Gingerbread House
2014
25 FirstBank CPJ 682 385 DR
Peter Piper’s Party Supplies

2014
2 FirstBank CPJ 2,200 1,540 DR
18 Purchases & GST PJ 1,540 0
50
Smashing Pinatas

July 1
Creditors’ Reconciliation as at 31 July 2014
Balloon World 187 CR
Ethan’s Costume Warehouse 0 CR
Everafter Toys 0 CR
Gingerbread House 385 DR
Peter Piper’s Party Supplies 0 CR
Smashing Pinatas 880 CR
Creditors’ Control Account as @ 31 July 682 CR
51
9. Bank Reconciliation
9.A. Written task: Adjustment to the cash journals
1 Enter the adjustments required in the cash receipts journal and the cash payments journal.
Cash Receipts Journal
Date Particulars Rec Debtors’ Cash Sundries GST Bank
No control Sales Control
2014 Aug 8 G Klein 13 300 300
15 Cash sales 14 150 15 165
20 Cash sales 15 800 80 880
22 Cash sales 16 500 50 550
31 Dividend BS 100 100
Interest received BS 14 14
Investment BS 1,000 1,000

transaction
Totals 300 1,450 1,114 145 3,009

No control Purchases Control $
2014 Aug 1 J Frances 427 90 9 99
L Smith 428 200 20 220
5 TT Transport 429 500 500
7 H Watts 430 600 60 660
8 B King 431 390 390
11 Office supplies 432 70 7 77
13 Wages 433 180 180
15 Cleaning 434 20 2 22
20 Repairs 435 70 7 77
26 H Watts 436 900 900
31 Interest expense BS 20 20
Bank Fee BS 35 35
Totals 1,790 890 395 105 3,180
52
2 Post the totals to the cash at bank account.

Cash at Bank Account
2014
Aug 1 Balance 1,000 Dr
Cash receipt CRJ 3009 4009 DR
Cash payments CPJ 3,180 829 DR
NOTE
In this example our books agree with the bank statement balance and therefore a bank
reconciliation statement is not required as there is no variation to the two balances to be
explained.
9.B. Written task: bank reconciliation statement

1 Complete the following bank reconciliation statement accounting for those transactions not
recorded by the bank in your training book:
Speedy Office Supplies
Bank Reconciliation Statement
as at 31 March 2014
Credit Balance as per bank statement $4,760
add Deposits not credited 3,360
8,120
less Unpresented cheques
470 275
471 220
472 290 785
Debit Balance as per Cash at Bank account (at 31 March 2014)

7,335
53
9.C. Written task: Review — manual bank reconciliation

Use the following information below related to the business of J Mark Pty Ltd, to complete
these tasks:
Bank of Melbourne Statement of Account

From:1 November 2014
To: 30 November 2014
J Mark Pty Ltd
General Cheque Account Account Number: 109856
Date Transaction Withdrawals Deposits Balance
1 Nov
Opening Balance 3,000.00 CR
3 Cash/Cheques 540 3,540.00 CR
5 Cheque 921 110 3,430.00 CR
7 Cheque 919 260 3,170.00 CR
Cheque 922 180 2,990.00 CR
14 Cheque 923 88 3,302.00 CR
19 Cheque 925 180 3,122.00 CR
24 Cheque 920 55 3,067.00 CR
30 Closing Balance 3,327.00 CR
Task 1 — Total the cash journals for November 2014

Total the columns for both the Cash Receipts and Cash Payments journals for November
2014.
Cash Receipts Journal (simplified)
Date Particulars Rec Debtors’ Cash GST Bank
No control Sales Control $
2014
Nov 3 Cash sales 015 400 40
Debtor – S Ong 016 100 540
9 Cash sales 017 400 400
28 Cash sales 019 100 10
Debtor – J So 020 150 260
Totals 650 500 50 1,200
54
Cash Payments Journal (simplified)

No control Purchases Control $
2014
Nov 4 Office 917 40 4 44
supplies
Donation 918 10 10
Creditor – S 919 260 260

Kuhn
Cash 920 50 5 55
purchases
Cash 921 100 10 110

purchases
7 Wages 922 180 180
Cash 923 80 8 88
purchases
Loan 924 150 150

repayment
28 Wages 925 180 180
Totals 260 230 560 27 1,077
Task 2 — Complete the cash at bank account in the general ledger as at

30 November 2014
Complete the cash at bank account in the general ledger at 30 November 2014.
Cash at Bank Account
2014
Nov 1 Balance 3,000 DR
Cash receipts CRJ 1,200 4,200 DR
Cash payments CPJ 1,077 3,123 DR
55
Task 3 — Prepare a bank reconciliation statement as at 30

November 2014
Prepare a bank reconciliation statement as at 30 November 2014.
J Mark Pty Ltd

Bank Reconciliation Statement
as at 30 November 2014
Credit balance as per Balance Sheet 3,327
Add: Deposits not credited
3,327
Less: Unpresented cheques
917 44
918 10
924 150 204
Debit: Balance as per Cash @ Bank a/c 30/11/2014 3,123
56
10. Using AccountRight

10.A. Written task: Review task
1 Using the Navigate.MYO company file, click Accounts List in the Accounts command
centre. Complete the following table:
Account name Asset/Liability/Equity/ Account Balance

Income/Expense Number
Petty Cash Asset 1-1140 $50.20
Motor Vehicles Asset 1-2300 $40,500.00
Visa Card Liability 2-1140 $1,245.99
Service Income Income 4-2000 $3,979.23
Payroll Expenses Expense 6-3000 $53,274.82
2 Go to the Card File command centre and click Cards List. Complete the table.
Hint: Click the zoom arrow ( ) to view the details of each card.
Mary Jones
What type of card is Mary Jones? Employee
What is her first phone number? 02 9894 2484
What is the postcode for Box Bay? 2167
What is her start date? 01/07/2014
My Town Reality
What type of card is My Town Reality? Customer
What is the first phone number? 03 9714 9228
Who is the contact person? Mrs A Curtis
How much is owed by My Town Reality? $4,768.51
3 From the Analysis tool, select Payables and answer the following questions:
a How much do you owe Huston & Huston Packaging?
Answer: $2,626.97
__________________________________________________
b How many bills make up the balance?
Answer: 9
__________________________________________________
57
c How much is owed for bill 56?
Answer: $56.75
__________________________________________________
d What is bill 56 for?
Answer: Stationery
__________________________________________________
10.B. Written task: Optional challenges

1 Not all businesses will use all the available command centres within AccountRight
products, for example an owner operator won’t require Payroll and retailers won’t
require Time Billing. In the table below tick which command centres each business
would need.
Banking Sales Time Billing Purchases Payroll Inventory
Tradesperson 3 3 3 2 2 2
(owner
(May be used in
operator)
some cases)
Consulting 3 3 3 2 3 2
business
operating on
charge out
rate with 6
staff
Retail business 3 2 2 3 3 3
with 5 staff (Not if
(assuming using cash
P.O.S. system drawer)
being used)
2 Using the Card File command centre, select the customer Island Way Motel and
answer the following questions.
a List this customer’s current outstanding balance.
Answer: $7,846.45
__________________________________________________
b How many invoices make up this amount?
Answer: 6
__________________________________________________
c What is the date and amount of the oldest invoice owing?
Answer: 1/4/2014, $3,250
__________________________________________________
58
11. Creating a Company File

11.A. Written task: Setting up AccountRight
1 What is a conversion month?
Answer: The conversion month is the month in which you plan to start entering
transactions into AccountRight. This can be any month within the financial year and your
opening balances are entered as at the beginning of that month. Once selected
AccountRight will not allow you to enter any financial data prior to that month.
_____________________________________________________
2 Why would you use 13 accounting periods?
Answer: A 13th accounting period is a notional period in which you can make end-of-year
adjustments without affecting any other months’ reporting within that year. The 13th
period is in addition to the 12 months of the year.
_____________________________________________________
_____________________________________________________
3 How do you view preferences in AccountRight?
Answer: Setup > Preferences
_____________________________________________________
_____________________________________________________
12. Setting up an Accounts List

12.A. Written task: Practice task: Account categories
In the Accounts command centre, click Accounts List. Then, answer the following questions:
1 List the detail accounts that add up to the total value for the header account 1-1100 Cash
On Hand.
1-1110 FirstBank Cheque

1-1160 LastBank Term Deposit
Account
________________________
______________________
1-1120 Payroll Cheque Account 1-1170 Cash Drawer

______________________ ________________________
1-1140 Petty Cash 1-1180 Undeposited Funds

______________________ ________________________
59
1-1190 Electronic Clearing

1-1150 Provision Account
Account
______________________
________________________
2 Which header account would include a total value for Credit Cards?
Answer: 2-1000 Current Liabilities
_____________________________________________________
3 Which account balances will give you the total value for 5-0000 Cost Of Sales?
5-1000 Food Purchases

______________________
5-1100 Beverage Purchases

______________________
5-2000 Freight
______________________
12.B. Written task: Setting up accounts

1 Why would you need to enter account opening balances in a new company file?
Answer: If you have been operating before using AccountRight you will already
have dollar values in accounts that need to be entered into your company file to
reflect the state of your business at the time of commencement of the company
file.
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
2 What is the Historical Balancing account?
Answer: Until all opening balances have been entered there will be an inbalance in
your accounts list. The Historical Balancing account ensures your accounts list
stays in balance by storing this out-of-balance amount.
_____________________________________________________
_____________________________________________________
3 Can amounts from transactions be posted to header accounts?
Answer: No
_____________________________________________________
60
4 What account type has the prefix 1?
Answer: Asset
_____________________________________________________
5 What account type would account 2-2100 be?
Answer: Liability
_____________________________________________________
6 What is the prefix for account type Equity?
Answer: 3
_____________________________________________________
Answer: Income
_____________________________________________________
Answer: Cost of Sales
_____________________________________________________
13. Debtors & Creditors
13.A. Written task: Debtors and creditors

1 Indicate whether the following accounts are assets or liabilities.
Account Asset or Liability
Debtors Asset
Creditors Liability
2 Indicate whether each of the following accounts are included in the Statement of Financial
Position or Statement of Financial Performance:
Account Report
Creditors Statement of Financial Position

Debtors Statement of Financial Position
61
3 Why would a creditor require the financial reports of a business?
To determine whether the business is able to pay the invoice issued by the
creditor.
______________________________________________________________
______________________________________________________________
______________________________________________________________
14. Setting up for Accounts Receivable:

Accounts, Preferences and Customers
14.A. Written task: Review setting up for accounts
receivable
1 What account type would the linked account be for Tracking Receivables?
Asset
___________________________________________________________
2 In AccountRight, which account would you check to find out what the total
customer’s opening balance should be?
Setup > Linked Accounts > Sales Accounts; The account that has been linked to the
function Asset Account for tracking Receivables.
___________________________________________________________
3 What would be the cause of an out-of-balance amount in the Customer Balances

window?
The Customer Balances window represents the individual balance of each of the
Customers - individual subsidiary debtor (customer) ledgers ( total amount of
outstanding invoices). The total of the Customer Balances ( total amount of
outstanding invoices) should therefore agree with the Total Trade Debtors account
( the linked asset account to track Receivables in Setup>Preference>Linked
Accounts).
An out of balance therefore at this point of the process will appear in this window if
you have entered an incorrect amount against one of the invoices of the Historical
Sales or you have omitted to enter one of the historical sales.
___________________________________________________________
62
15. Setting up for Accounts Payable: Accounts,

Preferences and Suppliers
15.A. Written task: Review setting up accounts payable
1 What account type should the linked account be for tracking payables?
Liability
__________________________________________________________
2 In AccountRight, which account would you check to find out what the total supplier’s
opening balance should be?
The linked account for tracking payables - the Trade Creditors account
__________________________________________________________
3 What are trade creditors?

Suppliers to whom you owe money.
__________________________________________________________
4 What would be posted to the trade creditors account?

Purchases, purchase returns and payments.
__________________________________________________________
16. Creating Items

16.A. Written task: Review — items
1 What type of items would require you to link an item to I Buy This Item and I inventory This
Item but not to I Sell This Item?
Answer: Raw materials that you inventory and use to build other items.
_____________________________________________________
2 When would you link an item to I Sell This Item and I inventory This Item but not to I Buy
This Item?
Answer: When the items are Finished goods.
_____________________________________________________
3 When would you link an item to I Sell This Item and I Buy This Item but not to I inventory
This Item?
Answer: If you are operating as a stock broker.
_____________________________________________________
63
17. Processing Sales

17.A. Written task: Review — sales
1 When would you use a Miscellaneous layout for an invoice?
To write off a bad debt
_____________________________________________________
_____________________________________________________
2 What is the Apply to Sale button for?
To offset a credit note against an outstanding invoice
_____________________________________________________
_____________________________________________________
3 When you click the To Do List from the Sales command centre, what kind of
transactions are displayed?
Accounts receivables - unpaid customer invoices showing overdue
_____________________________________________________
_____________________________________________________
64
21. Adjusting Invoices

21.A. Written task: Review
1 List two reasons why you would create an adjustment note:
Adjustment notes are issued to reduce the balance of an individual customer account.
You would create an adjustment note for any of the following reasons:
— Correct errors in an invoice / — Adjust a price / — Write off a bad debt
— Process returns where a business customer returns items valued at over $75 (or $82.50
including GST) and GST legislation says you must supply an adjustment note
— Process returns of supplies within a locked perdiod, which cannot be reversed.
2 How and where would you create an adjustment note?

Step 1: Create the adjustment note (negative sales/invoice) using the Enter Sales function
under the Sales command centre.
Step 2: Settle the adjustment note using the Returns & Credits tab within the Sales
Register and clicking the Apply to Sale or Pay Refund button.
3 What would you do if a customer returned all the goods listed on the original invoice?
Step 1: Create an adjustment note to the value of the good returned ensuring you use the
same layout and tax code as the original invoice.
Step 2: Settle the adjustment by applying to the original invoice if the goods were not paid
for or Pay Refund if the goods were paid for.
4 What is a bad debt?

Sometimes a business may encounter customers who are unable to pay their accounts. If
this happens, the business has to write off the outstanding amount as a bad debt and
record it as a bad debt expense.
22. Purchasing from Suppliers: Quotes and

Purchase Orders
22.A. Written task: Review quotes and purchase orders
1 When would you create a purchase order?
Answer: You would create an order when you want to send a copy to your supplier and also
keep a record of what has been ordered in your company file.
2 What is the difference between an order and a bill?

Answer: Orders can be created using supplier and order quantity details. These are saved
and are not recorded as a financial transaction until the goods are received. Bills result in
actual purchases. They are recorded with the details of the purchase from the supplier
invoice after the service or goods have been received and a financial transaction is created.
65
23. Purchasing from Suppliers: Bills

23.A. Written task: Checking supplier invoices
1 Complete the checklist provided to determine which of the supplier invoices should be
recorded as a bill—ready for payment—in your company file.

1 45 895 657 978
2 23 789 645 789
Invoice No: 234 Invoice No: 250

Smashing Pinatas Woods Newspapers
Date: 18 July 2014 Date: 18 July 2014
To: Child’s Play To: Child’s Play
10 x Witch Pinatas ($24.50 ea) $245 Advertising $150
Freight charges $10
TAX INVOICE
32 788 690 431
3 Peter Piper’s Party Invoice No: 505 4
Supplies Date: 18 July 2014 Invoice No: 001122
Gingerbread House
Date: 18 July 2014
To: Child’s Play
To: Child’s Play
Description Total
Description Total
50 x Fairy Plates ($3.20 ea) $160
10 x Pieces of 8 Choc Coins $50
50 x Fairy Party Hats ($3.00 ea) $150
($5.00 ea)
50 x Fairy Napkins ($1.50 ea) $75
50 x Fairy Invitations ($2.50 ea) $125
50 x Fairy Loot Bags ($2.20 ea) $110
TAX INVOICE
6 84 679 275 830
5 TAX INVOICE Invoice No: 659
Everafter Toys
98 622 233 830 Date: 18 July 2014
Invoice No: 699 To: Child’s Play
Internet Services
Date: 18 July 2014
Description Total
To: Child’s Play
10 x Glitter Tiara ($5.00 ea) $50
Description Total
Website registration $1000

66
Checklist questions 1 2 3 4 5 6
1. Do you have a record of Y Y Y Y N Y

the supplier in your
company file?
2. Does the invoice received Y N Y Y N N

match a purchase order /
quote recorded in your
company file?
3. Does the amount of the Y N Y

invoice received match the
amount on the matching
purchase order/quote/bill
recorded in your software?
4. If an item invoice/bill, do Y N Y
the items and number of
items billed match the
number in the purchase
order and the number
received?
5. Does the invoice contain Y Y N

a valid ABN for the
supplier?
6. Are the words Tax Invoice Y Y N

printed on the invoice?
Y N N N N N
Ready to be recorded as a
bill in your software?
If No, what action should pass onto contact contact pass onto pass onto
be taken manager supplier supplier manager manager
23.B. Written task: Review

1 How would you change a quote to an order?
Answer: There are two ways you can convert a quote to an order, either:
- From the Enter Purchases option; or
- From the Purchases Register
2 What is the Apply to Purchase button for?
Answer: The function that allows you to Settle Returns & Debits (-ve purchases) and apply the
debit amount to the supplier’s open orders and bills and decrease the balance of the
outstanding payment.
67
3 When you click the To Do List from the Purchases command centre, what kind of
transactions are displayed?
Answer: The To Do List window contains lists of reminders that inform you to
perform your regular business tasks on a consistent basis. When you click the To
Do List from the Purchases command centre, the To Do List window appears
showing the A/P (Accounts Payable) tab. The A/P tab displays all purchases that
you haven’t fully paid yet, sorted by oldest to more recent bills and showing how
many days payment is overdue by.
4 Which purchase transactions will appear in the Purchases tab of the Transaction
Journal window?
Answer: The Purchases tab of the Transaction Journal shows bills you have
recorded in your company file.
25. Spending and Receiving Money in

Banking
25.A. Written task: Spending and receiving money
1 What are the reasons for using the Spend Money window?
The Spend Money window is used for non-inventory expenditure, for example:
electricity, telephone or insurance premium bills; direct debits; or replenishing
petty cash.
_____________________________________________________
_____________________________________________________
_____________________________________________________
2 Why would you split a spend-money transaction?
When it consists of different lines that need to be allocated to different accounts or

which have different tax codes.
_____________________________________________________
_____________________________________________________
3 How can you enter receive-money transactions to get better reporting on different
income streams?
By splitting transactions into several lines, each of which is posted to the relevant
account representing a corresponding department, profit centre or income stream.
____________________________________________________
____________________________________________________
68
26. Dealing with Petty Cash

26.A. Written task: Identify valid petty cash claims
Child’s Play uses the petty cash claim method for handling petty cash and have a set of guidelines
detailing which expenses can be claimed as petty cash.
The Petty Cash Guidelines for Child’s Play

• All claims must be work-related
• No staff meals may be claimed
• No claims over $35 are allowed
• All claims must be backed up by a receipt
• All rejected claims must be forwarded to the manager
Petty Cash Claims

The following are petty cash claims with the details of each expense being claimed (Note: all claims
also have a receipt attached, to back them up.)
1 Petty Cash Claim 2 Petty Cash Claim 3 Petty Cash Claim

Name: Jill Childs Name: Billy Bones Name: Jackie Childs
Date: 21/7/2014 Date: 21/7/2014 Date: 21/7/2014
Details: Tea & Sugar Details: Lunch Details: Pens
Amount: $5.50 Amount: $15.00 Amount: $4.00

(Inc. GST) (Inc. GST)
4 Petty Cash Claim 5 Petty Cash Claim 6 Petty Cash Claim

Name: Bella Donna Name: Jill Childs Name: Walter Weasly
Date: 21/7/2014 Date: 21/7/2014 Date: 21/7/2014
Details: Paper Details: Computer Details: Milk
service
Amount: $11.50 Amount: $100.00 Amount: $2.00
(Inc. GST) (Inc. GST)
7 Petty Cash Claim

Name: Jackie Childs
Date: 21/7/2014
Details: Toner
Amount: $30.50
(Inc. GST)
69
1 Based on the given guidelines, look at the petty cash claims above and determine
which are legitimate petty cash expenses. Complete the table below to indicate
which vouchers are valid and should be reimbursed.
No. Date Expense Amount Approved
1 21/7/2014 Tea and sugar $5.50 9

2 21/7/2014 Lunch $15.00 8
3 21/7/2014 Pens $4.00 9
4 21/7/2014 Paper $11.50 9
5 21/7/2014 Computer service $100.00 8
6 21/7/2014 Milk $2.00 9
7 21/7/2014 Toner $30.50 9
Total amount approved $ 53.50
2 Reconcile the petty cash tin.

The amount of cash left in the petty cash tin is $46.50. To reconcile the petty cash
tin, total the amount of the vouchers and subtract this from the amount of the
original float, then count the remaining float and make sure it equals this value.
Does the amount left in the tin + the amount of the valid petty cash vouchers = the
original float of $100? Yes, the balance plus vouchers does equal the
original float.
Y/N
70
27. Using the Bank Register

27.A. Written task: The Bank Register
1 What fields and options are in the Spend Money window that are not in the Bank Register
window?
- Tax Inclusive option
- Multiple transaction lines
- Cheque Already Printed option
- Remittance Advice Delivery Status field
- Group with Electronic Payments option
2 What fields and options are in the Receive Money window that are not in the Bank Register
window?
- Tax Inclusive option
- Multiple transaction lines
- Group with Undeposited Funds option
- Payment Method field
3 When do you record spend-money transactions in the Spend Money and Bank Register
windows?
Either can be used for any non-inventory purchase, for example, insurance premiums,
office consumables or direct debits.
4 When do you record receive-money transactions in the Receive Money and Bank Register
windows?
Either can be used for any transaction not related to sales on account, such as cash takings,
bank interest or tax refunds.
71
29. Bank Reconciliation

29.A. Written task: Review
1 Why do you need to perform a bank reconciliation?
A bank reconciliation compares the entries in your bank statement with those in
the cheque account of your company file to detect missing depsoits or
withdrawals, or mistakes in data entry, either by the bank or yourself, and to
ensure bank charges are entered in the company file.
_____________________________________________________
_____________________________________________________
_____________________________________________________
72

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Bookkeeping for beginners

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MYOB Australia Pty Ltd

© MYOB Technology Pty Ltd 2010. All rights reserved.

Edition: July 2010

© MYOB Technology Pty Ltd.

The Child’s Play Chart of Accounts

Child’s Play — Chart of Accounts

1.02 LastBank Term Deposits 4.02 Sales - Merchandise

1.03 Debtors’ Control 4.03 Sales Returns and Allowances

1.04 Party Supplies Inventory 4.04 Discount revenue

1.05 Hire Equipment 4.05 Interest revenue

1.06 Office Equipment at Cost

1.07 Office Equipment - 5 Expenses

1.08 Motor vehicles at Cost 5.01 Advertising

1.09 M/V - Accumulated 5.02 Bank Charges

2 Liabilities 5.04 Office Supplies

2.02 Creditors’ Control 5.05 Staff Amenities

2.03 Customer Deposits 5.06 Purchases

2.04 GST Control 5.07 Purchases Returns and Allowances

2.05 Loans - FirstBank 5.08 Rent

5.09 Repairs & Maintenance

3 Owners’ Equity 5.10 Telephone

3.01 Partner A Capital – Jackie Childs 5.11 Depreciation

3.02 Drawings - Jackie Childs 5.12 Wages

3.03 Partner B Capital – Jill Childs 5.13 Insurance

3.04 Drawings - Jill Childs 5.14 Bad Debts

5.15 Interest Expense

© MYOB Technology Pty Ltd.

Debit & Credit Matrix

Account Normal increase Decrease

Asset Debit increase = debit decrease = credit

Liabilities Credit increase = credit decrease = debit

Owner’s Credit increase = credit decrease = debit

Revenue Credit increase = credit decrease = debit

Expense Debit increase = debit decrease = credit

© MYOB Technology Pty Ltd.

The Child’s Play Chart of Accounts ........................................................ iii

© MYOB Technology Pty Ltd.

7. Subsidiary Ledgers: Debtors ...................................................................27

Child’s Play Exercise - July 2014 ............................................................35

© MYOB Technology Pty Ltd.

© MYOB Technology Pty Ltd.

© MYOB Technology Pty Ltd.

1. Accounting & Small Businesses

• To complete the BAS

• To keep more accurate and up-to-date records

1.B. Written task: GST

Fish and Chips shop GST_____________________

Pet shop GST_____________________

Family doctor Free_____________________

© MYOB Technology Pty Ltd.

1.C. Written task: Review

Disadvantage:Sole, unlimited liability - personal assets will be affected

2 What are input tax credits?

4 If a business sold an item to a customer on 1st September but didn’t receive

30/10 (Reported on the October BAS)

1/9 (Reported on the September BAS)

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1.D. Written task: Optional task

Ownership Type Example 1 Example 2

Sole Trader Someone starting out a lawn local milk bar

Partnership accounting firms ** a restaurant business **

Proprietary Company family business sporting club

Partnership accounting firms a restaurant business