Accounting Fundamentals Assignment 2022

ACCOUNTING FUNDAMENTALS 1
ACCOUNTING
FUNDAMENTALS

ACCOUNTING FUNDAMENTALS 2
Task 1:
Part a:
Journal entries:
Particulars Debit Credit
Apr-05 Cash 300.00
Capital 300.00
Apr-07 Purchases 200.00
Accounts payable 200.00
Apr-08 Cash 250.00
Loan 250.00
Apr-15 Motor van 150.00
Cash 150.00

ACCOUNTING FUNDAMENTALS 3
Apr-20 Accounts receivables 350.00
Sales 350.00
Apr-28 Rent expense 50.00
Cash 50.00
Apr-29 Loan 200.00
Cash 200.00
Apr-30 Rent expense 60.00
Cash 60.00
Part b:
Particulars Debit Credit
Cash
240.0
0
Accounts receivables
350.0
0
Motor van
150.0
0
Loan
50.0
0
Accounts payable 350.0

ACCOUNTING FUNDAMENTALS 4
0
Capital
300.0
0
Drawings
60.0
0
Purchases
200.0
0
Sales
350.0
0
Rent expense
50.0
0
Total
1,050.0
0
1,050.0
0
-
Part c:
Statement of income
Particulars Amount
Sales 350.00

ACCOUNTING FUNDAMENTALS 5
Less: purchases 200.00
Gross profit 150.00
Less: expenses:
Rent expense 50.00
Net profit 100.00
Statement of financial position
Particulars Amount
Assets:
Cash
240.0
0
Accounts receivables
350.0
0
Motor van
150.0
0
Total Assets
740.0
0

ACCOUNTING FUNDAMENTALS 6
Liabilities and
shareholders equity:
Loan
50.0
0
Accounts payable
350.0
0
Capital less drawings
340.0
0
Total liabilities and
shareholders equity 740
Task 2:
Part a:
Cash Purchases Motor Van Loan
Part
icula
rs
De
bit
C
r
e
di
t
Pa
rti
cul
ars
D
e
b
it Credit
Pa
rti
cul
ars
D
e
b
it
C
r
e
di
t
Pa
rti
cul
ars
D
e
b
it
C
r
e
di
t
J
a
Capi 5
,00
J
a
Ca 1
3
J
a
Ca 6
0
J
a
Ca 1
0

ACCOUNTING FUNDAMENTALS 7
n
-
0
1 tal
0.0
0
n
-
0
3 sh
0
0
n
-
0
2 sh 0
n
-
0
4 sh
0
0
J
a
n
-
0
2
Mot
or
van
6
0
0
J
a
n
-
2
7
Ca
sh
3
5
0
J
a
n
-
0
3
Purc
hase
s
1
3
0
0
J
a
n
-
0
4 Loan
10
00
J
a
n
Mot
or
expe
2
0
0

ACCOUNTING FUNDAMENTALS 8
-
1
0 nses
J
a
n
-
2
4
Stor
age
expe
nses
1
5
0
J
a
n
-
2
0
Sale
s
80
0
J
a
n
-
2
7 Loan
3
5
0
J
a
n
-
Dra
wing
s
1
7
5

ACCOUNTING FUNDAMENTALS 9
3
0
Motor
expenses Capital Drawings Sales
Part
icula
rs
De
bit
C
r
e
di
t
Pa
rti
cul
ars
D
e
b
it Credit
Pa
rti
cul
ars
D
e
b
it
C
r
e
di
t
Pa
rti
cul
ars
D
e
b
it
C
r
e
di
t
J
a
n
-
1
0 Cash
20
0
J
a
n
-
0
1
Ca
sh 5,000.00
J
a
n
-
3
0
Ca
sh
1
7
5
J
a
n
-
2
0
Ca
sh
8
0
0
Storage
expenses
Part
icula
rs
De
bit
C
r
e
di

ACCOUNTING FUNDAMENTALS 10
t
J
a
n
-
2
4 Cash
15
0
Journal entries:
Particulars Debit Credit
Jan-01 Cash 5,000.00
Capital 5,000.00
Jan-02 Motor van 600.00
Cash 600.00
Jan-03 Purchases 1,300.00
Accounts payable 1,300.00
Jan-04 Cash 1,000.00

ACCOUNTING FUNDAMENTALS 11
Loan 1,000.00
Jan-10 Motor expense 200.00
Cash 200.00
Jan-13 Accounts receivables 300.00
Sales 300.00
Jan-20 Accounts receivables 500.00
Sales 500.00
Jan-24 Storage expense 150.00
Cash 150.00
Jan-27 Loan 350.00
Cash 350.00
Jan-30 Drawings 175.00
Cash 175.00
Part b:
Particulars Debit Credit
Cash 4,025.0

ACCOUNTING FUNDAMENTALS 12
0
Motor van
600.0
0
Drawings
175.0
0
Loan
650.0
0
Capital
5,000.0
0
Purchases
1,300.0
0
Sales
800.0
0
Motor expenses
200.0
0
Storage expenses
150.0
0
Total
6,450.0
0
6,450.0
0
Part c:
Statement of income
Particulars Amount

ACCOUNTING FUNDAMENTALS 13
Sales
800.
00
Less: cost of goods
sold
500.
00
Gross profit
300.
00
Less: expenses:
Motor expenses
200.
00
Storage expenses
150.
00
Net profit
-
50.00
Statement of financial position
Particulars Amount
Assets:
Cash 4,025.0

ACCOUNTING FUNDAMENTALS 14
0
Inventory
800.0
0
Motor van
600.0
0
Total Assets
5,425.0
0
Liabilities and
shareholders equity:
Loan
650.0
0
Accounts payable
Capital less drawings
4,775.0
0
Total liabilities and
shareholders equity 5425
Task 3:
Part a:
Cash Purchases Accounts Furniture

ACCOUNTING FUNDAMENTALS 15
payable and fixtures
Parti
cular
s
De
bi
t
C
r
e
d
it
Part
icula
rs
D
e
b
it
C
r
e
d
it
Part
icul
ars
D
e
b
it
C
r
e
d
it
Parti
cular
s
D
e
b
it
C
r
e
d
it
J
a
n
-
0
1
Openi
ng
balan
ce
34
3.
00
J
a
n
-
0
5
Acc
ount
s
paya
ble
1
5
0
J
a
n
-
0
1
Ope
ning
bala
nce
3
3
J
a
n
-
0
1
Openi
ng
balan
ce
1
9
8
J
a
n
-
0
1
J
a
n
-
0
7
Acco
unts
receiv
ables 18
J
a
n
-
1
4 Cash
7
5
J
a
n
-
0
7
Cas
h
1
8
J
a
n
-
0
9
Acco
unts
payab
le
2
1
J
a
n
-
0
9
Cas
h
2
1

ACCOUNTING FUNDAMENTALS 16
J
a
n
-
0
9 Sales 64
J
a
n
-
1
5
Cas
h
1
2
J
a
n
-
1
4
Wage
s
1
4
J
a
n
-
1
4
Purch
ases
7
5
J
a
n
-
1
5
Acco
unts
payab
le
1
2
J Offic 3

ACCOUNTING FUNDAMENTALS 17
a
n
-
2
0
e
desk 2
J
a
n
-
2
1
Wage
s
1
7
J
a
n
-
2
1 Sales
11
0
J
a
n
-
2
3
Offic
e
expen
ses 3
J
a
Acco
unts
25

ACCOUNTING FUNDAMENTALS 18
n
-
2
8
receiv
ables
J
a
n
-
2
8 Sales 84
J
a
n
-
3
1 Sales 30
J
a
n
-
2
8
Wage
s 15
Office desk
Office
expenses Drawings Sales

ACCOUNTING FUNDAMENTALS 19
Parti
cular
s
De
bi
t
C
r
e
d
it
Part
icula
rs
D
e
b
it
C
r
e
d
it
Part
icul
ars
D
e
b
it
C
r
e
d
it
Parti
cular
s
D
e
b
it
C
r
e
d
it
J
a
n
-
2
0 Cash 32
J
a
n
-
2
3 Cash 3
J
a
n
-
0
2
Acco
unts
receiv
ables
1
2
4
J
a
n
-
1
1
Acco
unts
receiv
ables
6
4
J
a
n
-
2
4 Cash
1
1
0
J Cash 8

ACCOUNTING FUNDAMENTALS 20
a
n
-
2
8 4
Wages
expense
Accounts
receivables
J
a
n
-
3
1 Cash
3
0
Parti
cular
s
De
bi
t
C
r
e
d
it
Part
icula
rs
D
e
b
it
C
r
e
d
it
J
a
n
-
0
5 Cash 12
J
a
n
-
0
1
Ope
ning
bala
nce
8
3
J
a
n
Cash 14 J
a
n
Sale
s
1
2
4

ACCOUNTING FUNDAMENTALS 21
-
1
4
-
0
2
J
a
n
-
2
1 Cash 17
J
a
n
-
2
3 Cash
2
5
J
a
n
-
2
8 Cash 15
Journal entries:
Particulars Debit Credit
Jan-
02 Accounts receivables 124.00
Sales 124.00
Jan- Wages 12

ACCOUNTING FUNDAMENTALS 22
05
Cash 12.00
Jan-
07 Purchases 150
Accounts payable 150.00
Jan-
09 Accounts payable 21.00
Cash 21.00
Jan-
11 Cash 64.00
Sales 64.00
Jan-
14 Wages 14.00
Cash 14.00
Jan-
15 Purchases 75.00
Accounts payable 75.00
Jan-
15 Accounts payable 12.00
Cash 12.00

ACCOUNTING FUNDAMENTALS 23
Jan-
20 Office desk 32.00
Cash 32.00
Jan-
21 Cash 110.00
Sales 110.00
Jan-
21 Wages 17.00
Cash 17
Jan-
23 Office expenses 3
Cash 3
Jan-
23 Cash 25
Accounts receivables 25
Jan-
28 Cash 84
Sales 84

ACCOUNTING FUNDAMENTALS 24
Jan-
28 Wages 15
Cash 15
Jan-
31 Cash 30
Sales 30
Part b:
Particulars Debit Credit
Cash in hand
473.0
0
Inventory
458.0
0
Furniture and fixtures
198.0
0
Receivables
164.0
0
Office desk
32.0
0
Accounts payable
150.0
0

ACCOUNTING FUNDAMENTALS 25
Capital
1,049.0
0
Sales
412.0
0
Purchases
225.0
0
Wages expenses
58.0
0
Office expenses
3.0
0
Total
1,611.0
0
1,611.0
0
Part c:
Statement of income
Particulars Amount
Sales 412.00
Less: cost of goods sold 309.00

ACCOUNTING FUNDAMENTALS 26
Gross profit 103.00
Less: expenses:
Wages expenses 58.00
Office expenses 3.00
Net profit 42.00
Statement of financial position
Particulars Amount
Assets:
Cash
473.0
0
Inventory
374.0
0
Furniture and fixtures
198.0
0
Receivables
164.0
0
Office desk
32.0
0

ACCOUNTING FUNDAMENTALS 27
Total Assets
1,241.0
0
Liabilities and
shareholders equity:
Accounts payable
150.0
0
Capital less drawings
1,091.0
0
Total liabilities and
shareholders equity
1,241.0
0
-
Task 4:
Particulars Debit Credit
Accounts
receivables -
Accounts payable
4,850.0
0
Cash 6,505.0

ACCOUNTING FUNDAMENTALS 28
0
Sales
22,075.0
0
Purchases
20,420.0
0
Total
26,925.0
0
26,925.0
0
Claire
Particulars Debit Credit
Jun-02 Sales 8,075.00
Jun-22 Sales return 1,000.00
Jun-24 Cash 7,075.00
Total -
Jane
Particulars Debit Credit
Jun-20 Sales 6,000.00

ACCOUNTING FUNDAMENTALS 29
Total 6,000.00
Georgina
Particulars Debit Credit
Jun-13 Purchases
11,160.0
0
Jun-25 Cash
11,160.0
0
Total -
Andrew
Particular
s Debit Credit
Jun-21 Purchases
4,410.0
0
Jun-27 Cash
4,410.0
0

ACCOUNTING FUNDAMENTALS 30
Total 0
Hywel
Particulars Debit Credit
Jun-14 Sales
9,000.0
0
Jun-25 Cash
9,000.0
0
Total -
Mandy
Particulars Debit Credit
Jun-24 Purchases
4,850.0
0
Total
4,850.0
0

ACCOUNTING FUNDAMENTALS 31
Task 5:
The capital expenditures are the expenses that are incurred on the fixed assets. These are the
expense that are expected to be incurred on the productive assets of the company and are
usually of a long term in nature whereas, the revenue expenditure is the one which is
connected with any specific revenue transaction or an operating period. The expense include
the cost of goods sold or the repairs and the maintenance expenses. Hence, the difference
between the above stated 2 expense are as follows:
 With regard to riming of these expense, the capital expenditures are charged as an
expense over a longer period of time through the charging of depreciation expenses
whereas the revenue expenditure is the one which is charged as an expense in the
current period of after a short period of time.
 With regard to consumption, the capital expenditure is assumed to have been
consumed over the period of the useful life of the fixed asset.
 With regard to size, the capital expenses involve a much more amount when
compared with the amount involved in the revenue expenditure. This is mainly due to
the fact that the expense is classified as the capital expenditure in case the same is
more than the threshold value and if not, then the same is considered to be a revenue
expenditure. But then there is a certain a huge amount of expense which could still be
classified as the revenue expenditure as long as the same is connected with the sale of
the transactions or the period costs (Accounting tools, 2019).
 The capital expenditure is incurred when the fixed assets are purchased whereas the
revenue expenditure is incurred on the day to day business operations of the company
and also, on the maintenance of the fixed assets.

ACCOUNTING FUNDAMENTALS 32
 With regard to the earning capacity, the capital expenditure leads to an increase in the
earning capacity of the company whereas the revenue expenditure does not lead to an
increase in the existing capacity of the asset.
 The capital ensue is incurred for the capital items and hence are recorded on the assets
size of the balance sheet whereas the revenue expense is incurred for the purposes of
book keeping in accounting (Accounting coach, 2019).
 The benefits of capital expense are spread over a period of years whereas the benefits
of revenue expense are for a limited period of time or for an accounting year only.
 The capital expense is non-recurring in nature and is one time in nature whereas the
revenue expense is recurring and is regular in nature
 The amount spent on fixed assets is considered as the capital expenditure whereas the
money spent on the fixed asset after the same has been used is considered to be a
revenue expenditure.
 The capital expense leads to the acquisition of the assets and the same is used for the
purposes of earning profits and then the same s sold once they become unfit for the
business whereas the revenue expense does not result in the acquisition of the asset
and the same is considered as the daily activity (Toppr, 2019).

ACCOUNTING FUNDAMENTALS 33
References:
AccountingCoach.com. (2019). What is a capital expenditure versus a revenue expenditure?
| AccountingCoach. [online] Available at: https://www.accountingcoach.com/blog/capital-
expenditure-revenue-expenditure [Accessed 18 Dec. 2019].
AccountingTools. (2019). The difference between capital expenditures and revenue
expenditures — AccountingTools. [online] Available at:
https://www.accountingtools.com/articles/the-difference-between-capital-expenditures-and-
revenue-expe.html [Accessed 18 Dec. 2019].
Topdifferences.com. (2019). Difference between Capital Expenditure and Revenue
Expenditure. [online] Available at: https://topdifferences.com/difference-between-capital-
expenditure-and-revenue-expenditure/ [Accessed 18 Dec. 2019].