Page 124 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

Balances from Asam Traders’ General ledger

TZS
Sales 172,720,000

Purchases 83,896,000
FOR ONLINE READING ONLY
Rent and rates expenses 3,296,000
Lighting and heating expenses 412,800
Salaries and wages 40,720,000

Insurance expenses 1,608,000
Building 67,360,000
Furniture 864,000

Trade receivables 24,672,000

Electricity expenses 326,400
Trade payables 11,984,000
Balance at bank 11,160,000

Equipment 20,000,000
Motor van 11,680,000

Motor running expenses 3,278,400
Capital 83,400,000

Stock at 1 December 2020 1,169,600
st
Stock at 30 November 2021 978,550
th
Discount received 2,339,200

In this case, the first step is to identify whether the balances are debit or credit, using
the concept of normal balances. To do this, the use of the concept of normal balances
that was discussed in chapter five has to be applied. All that is needed is to identify for
each balance the elements of accounting equation affected and label the balance as a
debit or credit balance applying the normal balance concept.

This can be summarised as follows:
Name of account Element Normal balance

Sales Revenue Credit
Purchases Expense Debit
Rent and rates expenses Expense Debit

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 116 18/10/2024 10:14