Key Journals

Question 1

Petty Cash (imprest)

Answer 1

Refill -> Dr petty Cash (A)
Cr Cash (A)
through month in ledger has specific vouchers

Question 2

Inventory

Answer 2

DON’T TOUCH T/O PERIOD
OI (on opening a/c) -> Dr CoS, Cr Inventory
Purchases in Period (reclassification) -> Dr CoS , Cr Purchases
Closing I -> Dr Inventory (SoFP), Cr CoS

Drawings - Dr drawings, Cr CoS
Loss I - Dr expenses, Cr Purchases

Question 3

Accruals

Answer 3

dr Expenses, Cr Accruals (L)
To reverse (brought fwd) -> dr Accruals, Cr exp (spl)

Question 4

Prepayments

Answer 4

Dr Prepayment (CA), Cr Expenses
To reverse (brought fwd) -> Dr Expenses, Cr Prepayments

Question 5

Accrued Income (Arrears)

Answer 5

Dr Accrued Income (A, SoFP), Cr other income (SPL)
Reverse opening level

Question 6

Deferred Income (rent in advance)

Answer 6

Dr other income (SPL) Cr Other Payables (SoFP, L)

Question 7

Bonus Issue (shares)

Answer 7

Dr Share Premium (iff enough otherwise RE)
Cr Share Capital

Question 8

Rights Issue

Answer 8

Dr Cash (full)
Cr Share Cap. (#shares*NV)
Cr Share Premium (rest)

Question 9

Shares

Answer 9

Dr Cash (always)
Cr Ordinary Shares (NV)
Cr Premium Shares (if share price in excess of NV)

Question 10

Depreciation

Answer 10

Dr Depn Exp
Cr Accumulated Depn (- from cost of asset)

Question 11

Impairment

Answer 11

Dr Impairment Expense
Cr Asset

Question 12

Disposal (for Cash)

Answer 12

1) remove cost: Dr disposal a/c, Cr NCA
2) Remove Accum Depn: Dr Accumulated Depn, Cr Disposal a/c
3) Account for proceeds: Dr cash, Cr disposal a/c
4) balance off for P/L

Question 13

Disposal (PEA)

Answer 13

1) remove cost: Dr disposal a/c, Cr NCA
2) Remove Accum Depn: Dr Accumulated Depn, Cr Disposal a/c

3) Record PEA: Dr NCA (new), Cr disposal a/c
4) Record Cash: Dr NCA (new), CR cash
5) Balance off

Question 14

Development cost

Answer 14

Dr NCA (intangible) OR (expense if writing off)
Cr Cash/payables

Question 15

Discounts

Answer 15

trade = remove before sales/purchase JNLs
Settlement = do what is expected then adjust if necessary

Question 16

VAT

Answer 16

Input (CO. owed) + output (CO. owes HMRC)
-> Income/expenses NET of VAT
-> TR and TP gross of VAT

VAT control a/c Dr we receive and Cr we owe

Question 17

Irrecoverable Debt (bad Debt/ write off)

Answer 17

Dr Irrecoverable debt (E)
Cr TR
-> If paid - Dr Cash, Cr Irr debt expence

Question 18

Allowance for Receivables (doubtful debt)

Answer 18

Dr Irre debt Exp ,Cr Allowance for R (-ve Asset)

Only record movement so above Increases, reverse decreases
Only touch at Y/E (if pay/ written off don’t include in JNL!!

Question 19

Contra Entries

Answer 19

Dr Trade Payables
Cr Trade Receivables
(take difference from both)

Question 20

Retained Earnings (accumulation of P and L)

Answer 20

dividends paid = Dr RE, Cr Cash
Dividend declared = Dr RE, Cr Dividends pay (L)

[dividends for Equity shares if debt shares Dr Financial cost, Cr pay/cash]

Question 21

Financial Cost

Answer 21

[is interest paid out, redeemable dividends paid]
Dr Financial Cost
Cr Payables (other)

Question 22

Provisions

Answer 22

[Current Liability]
1) create - Dr Expense, Cr Provision
2) - incur - always Cr Cash (full), Dr provision (amount stated)
P to low = Dr Expense (the amount over)
P to high = Cr Expense (the amount under)

• For warranty on;y the movement - increase Dr exp, Cr provision

Question 23

Tax

Answer 23

Tax liability - Dr tax exp, Cr tax payable
Tax paid - Dr Tax payable, Cr Cash

-> over provision (dr TaxP, cr Tax E) reverse for under provision