Exam 5: Introduction to the Worksheet

The following amounts have been paid out of the business bank account. Purchase of motor car £7 000, petrol and car expenses £1 300, wages £4 500, £9 000 paid in by the owner, money taken out by the owner, £1 000, money from sales £9 000, purchases of goods resold £4 000, rent of premises £3 000. -what should be recorded as the increase in assets over the period?

The total of equity and liabilities must always equal the total assets.

An increase in assets can only arise when goods are sold.

A profit results in an increase in liabilities.

The definition of duality is the same as the definition of duplicity.

A reduction in equity must be accompanied by a decrease in total assets.

Jamie started his own plumbing business and put £3000 in the bank account and then used £ 2 500 to buy a van. Which of the following represent the correct entries in relation to these transactions?

The following amounts have been paid out of the business bank account. Purchase of motor car £7000, petrol and car expenses £1 300, wages £4 500, £9000 paid in by the owner, money taken out by the owner, £1000, money from sales £9000, purchases of goods resold £4000, rent of premises £3000. What amount should be recorded as expenses for the period?

The following amounts have been paid out of the business bank account. Purchase of van £9 000, petrol and car expenses £1 800, wages £7 000, £11 000 paid in by the owner, money taken out by the owner £2 000, money from sales £15 000, utility bills £1 200, rent of premises £5 000, purchases of goods resold £6 000. In addition the owner withdrew £1 500 in goods that the business had purchased during the period. - what should be recorded as the change in the bank balance over the period?

A pre-condition or classifying anything as an asset is that there must be a future benefit.

A reduction in one asset may be accompanied by a reduction in equity, a loss or a reduction of liabilities.

If the owners of a business withdraw goods from the business for their own personal use it should be recorded as:

A reduction of assets must be accompanied by a reduction in equity, a loss or a reduction of liabilities.

Jamie reckons that the tools he already owned which he will use for the business had cost are worth £500. How should these be dealt with?

The following amounts have been paid out of the business bank account. Purchase of motor car £7 000, petrol and car expenses £1 300, wages £4 500, £9 000 paid in by the owner, money taken out by the owner, £1 000, money from sales £9 000, purchases of goods resold £4 000, rent of premises £3 000. - what should be recorded as the profit or loss and the change in equity over the period?

Assets can increase as a result of an increase in liabilities.

Double entry book-keeping relates to keeping two sets of books.