Chapter 9

Question 1

Closing ledgers

Answer 1

Transfer balances from revenue and expense ledgers to p/l summary to calculate profit and reset accounts for the next period

Question 2

Capital account

Answer 2

Profit and loss summary is closed to the capital account because the profit belongs to the owner.
Ledger should show expenses and revenue and profit of that is capital

Question 3

Ledgers

Answer 3

Left side debits, decreases in the account itself

Right side credits are increases in the account

Question 4

General journal

Answer 4

Transferring an account to another account so that the value of the first account is transferred to the new account eg drawings transferred to the capital account have a negative affect

Question 5

Income statement

Answer 5

Revenue:
Cash sales
Credit sales

Les cost of goods sold:
Cost of sales
Customs duty
Cartage/freight

Gross profit:
Stock loss/gain

Adjusted gross profit:

Add other revenue:
Discount revenue

Less other expenses:
Wages
Adverts
Discount expense
Freight out
Rent expense

Net profit