Page 38 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

When such information is presented on the statement of affairs, the statement will look
as follows:

Habibu’s statement of affairs as at 1 January 2020
st
Details TZS
Assets:
FOR ONLINE READING ONLY
Shaving machines 480,000

Furniture 620,000
Fittings 216,000

Consumables (soap, creams, and towels) 115,000
Cash 510,000
Total Assets 1,941,000

Capital and liabilities:
Liabilities

Payable to Mwakapande 836,000
Total Liabilities
Capital 1,105,000

Total capital and liabilities 1,941,000

Now, every transaction conducted by the Habib’s business will have dual effect such
that the equation maintains the relationship between assets, liabilities and capital.
Based on the previous scenario where Habibu contributed capital amounting to TZS
1,105,000 and owed Mwakapande TZS 836,000. Other examples and their effects on
the accounting equation:
1. On 3 January 2020; Habibu buys a steriliser for the shaving machines on credit
rd
from Usafi traders at a cost of TZS 240,000. In this example, the effect is such that

there is an increase in assets (a sterilising machine) by TZS 240,000, and an increase
in liabilities (accounts payable or creditors) by TZS 240,000.
The equation (from above) will now be:

TZS 2,181,000 (that is, TZS (1,941,000 + 240,000)) = TZS (1,105,000 + 1,076,000)

Note that TZS, 1,076,000 come from the previous figures of liabilities that is TZS
836,000 and the new payable to Usafi traders TZS 240,000.

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 30 18/10/2024 10:14