Activity 1: Transactions
Prepare the general journal entries to record the following transactions for the business for
the month of May 2016 (ignore GST):
May
1 Owner deposited $50,000 of his own money into the business’ bank account.
3 Employed a part-time worker to begin work on the first Monday of next month,
earning a salary of $450 per week.
5 Purchased office supplies for $80 and a laptop for $2,500, both on credit.
5 Bought $8,000 worth of new inventory on credit to be sold in the shop.
6 Paid rent of $900.
7 Received $2,000 cash from a client for services provided.
9 Sold inventory for $1,750 cash, and $4,150 on credit. The inventory had cost the
business $4,000
10 A short-term bank loan of $10,000 was taken out to help with some equipment
purchases.
12 Owner took home $1,500 for personal use
19 Invoiced a client for $2,100 for services provided.
21 Paid electricity of $412.
23 Paid $2,000 of accounts payable
25 Received cash for $3,000 of accounts receivable
30 Paid $300 principle off the loan and a further $35 interest.
31 Office supplies used this month total $38.
General Journal Template GJ1
Date Details Ref Debit Credit
GJ2
Date Details Ref Debit Credit
Activity 2: General Ledger
Post the entries from the general journal into a general ledger using both the running
balance format and the t-form format. Use the account numbers from the Chart of Accounts
from Topic 1.
T-form Template
DR CR
Cash at Bank 1-1100
Date Description Ref Amount Date Description Ref Amount
Accounts Receivable 1-1104
Date Description Ref Amount Date Description Ref Amount
Inventory 1-1115
Date Description Ref Amount Date Description Ref Amount
Office Supplies 1-2120
Date Description Ref Amount Date Description Ref Amount
Office Equipment 1-2120
Date Description Ref Amount Date Description Ref Amount
Accounts Payable 2-1200
Date Description Ref Amount Date Description Ref Amount
Short-term Loan Payable 2-1210
Date Description Ref Amount Date Description Ref Amount
Capital 3-1300
Date Description Ref Amount Date Description Ref Amount
Drawings 3-1310
Date Description Ref Amount Date Description Ref Amount
Sales 4-1000
Date Description Ref Amount Date Description Ref Amount
Service Fee Revenue 4-2000
Date Description Ref Amount Date Description Ref Amount
Cost of Goods Sold 5-1000
Date Description Ref Amount Date Description Ref Amount
Electricity Expense 6-2547
Date Description Ref Amount Date Description Ref Amount
Office Supplies Expense 6-2555
Date Description Ref Amount Date Description Ref Amount
Rent Expense 6-3570
Date Description Ref Amount Date Description Ref Amount
Interest Expense 6-3575
Date Description Ref Amount Date Description Ref Amount
Running Balance Template
Cash at Bank 1-1100
Date Explanation Ref Debit Credit Balance
Accounts Receivable 1-1104
Date Explanation Ref Debit Credit Balance
Inventory 1-1115
Date Explanation Ref Debit Credit Balance
Office Supplies 1-2120
Date Explanation Ref Debit Credit Balance
Office Equipment 1-3170
Date Explanation Ref Debit Credit Balance
Accounts Payable 2-1200
Date Explanation Ref Debit Credit Balance
Short-term Loan Payable 2-1210
Date Explanation Ref Debit Credit Balance
Capital 3-1300
Date Explanation Ref Debit Credit Balance
Drawings 3-1310
Date Explanation Ref Debit Credit Balance
Sales 4-1000
Date Explanation Ref Debit Credit Balance
Service Fee Revenue 4-2000
Date Explanation Ref Debit Credit Balance
Cost of Goods Sold 5-1000
Date Explanation Ref Debit Credit Balance
Electricity Expense 6-2547
Date Explanation Ref Debit Credit Balance
Office Supplies Expense 6-2555
Date Explanation Ref Debit Credit Balance
Rent Expense 6-3570
Date Explanation Ref Debit Credit Balance
Interest Expense 6-3575
Date Explanation Ref Debit Credit Balance
Activity 3: Trial Balance Template
Prepare a trial balance as at 31 May 2016.
Account A/c No Debit Credit
Limitations of Trial Balance (Answers)
• May balance but still contain errors:
– a transaction may have been left out altogether
– amounts may have been posted to the correct side but the wrong account
(Electricity instead of Telephone)
– a transactions may have been duplicated
– there may be a compensating mistake
• If it does not balance there is definitely an error but it doesn’t “show” where the error is
• Errors detected after posting should be corrected with another entry designed to “fix” the
error
What is a Ledger? (Answer)
Information from journals is transferred or “posted” into a Ledger
• A journal records each transaction, the ledger records the effect each transaction has on
individual accounts
• The main ledger is called the general ledger
• Within the ledger, each asset, liability, equity, income and expense item has a separate
record, called an account
• Increases and decreases to each item during a period are recorded in the accounts using the
debit and credit rules
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Attribution information
Title: Student Learning - PASS - Business Worksheet 3
Source: http://www.utas.edu.au/health/community/open-health/uni-view/resources/courses/student-
learning/pass-business-worksheet-3
Author: Gabbi Fleming
