Comments

  1. Profile photo of Akila says

    Just a question to understand the concept better. If there is a payment through check/ post dated check or purchase order for a certain amount where do we record the transaction ? How do we classify those transaction ?

    Thanks for your assistance.

    Regards
    Akila

    • Profile photo of John Moffat says

      First, purchase orders are not recorded in the t-accounts. (If a company uses purchase orders, they will no doubt keep a record, but any record is not part of the double-entry).

      Payments by cheque (it will be spelt ‘cheque’ in the exam) will be recorded in exactly the same way as cash. A company will have two cash accounts – one for ‘loose’ cash, and one ‘cash at bank’ account for payments and receipts through the bank account (including cheques paid and received). Some companies make no payments in ‘loose’ cash and so will just have one cash account.

      The idea of having two cash accounts is dealt with in later chapters/lectures, as is the reconciling of the cash at bank account to the bank statement (and how cheques are dealt with).

      • Profile photo of Akila says

        Thank you John. I shall complete the chapters as said and if I have clarifications I shall get back to you.

        Have a pleasant evening.

        Thanks
        akila

  2. avatar says

    wow your lecture is soo interesting and easy to grasp. sir please note the withdrawals figure is still showing 500. so when you were doing your tiding up bit i couldn”t follow it. however, now I understand from your comments that you deliberately changed it at one stage and left it. So should I read withdrawals as 100?
    I studies F3 with Kaplan but your lectures are so well explained.
    Thank you very much.

  3. avatar says

    Is it appropriate to transfer the balances on Income Statement items to Income Statement instead of opening Income Statement T A/C? E.g. Rent A/c being debit bal could be written as transfer to Income Statement while closing it off.

    I do sincerely appreciate you.

  4. avatar says

    We’ll the explanation was very helpful… I just had a doubt .. What was striking me to forward .. How did withdrawal change from $500 to $100 … Capital $ 5000 + profit (I/S) $400 – withdrawal $ 100 ??? M

    • Profile photo of John Moffat says

      Have you watched the earlier lecture on Chapter 2 of the Course Notes?
      It is in that chapter that I explain what the Statement of financial position, and the Statement of profit or loss are showing.

  5. avatar says

    Hello Sir,

    Thank you for this helpful lecture.

    I know that the Statement of Financial position did balance off nicely but I think I was attentive to the lecture and know how did the $ 500 withdrawals come up. But I wanted to know whether this error is going to cause problems later on.

    Thank you.

    Regards,
    Priya

  6. avatar says

    Oh,sorry, Mr. Moffat,I am poor in English.

    Comparing with other lectures,you give many examples to make us understanding easily.Thank you.

    I am misunderstanding the attribute of the lecture,because it is interesting and useful .

  7. avatar says

    where did the 500 amount on the withdrawal ledger come from i thought the drawings were to be 100 because thats what kristine withdrew from the business. please help didnt understand where the 500 came from.

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