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i have some questions i want to ask. If anyone or Sir John can explain me, i would be very delightful.
Q. A company’s motor vehicles at cost account 30 June 20×6 is as follows:
motor vehicles-cost
balance b/d 150,500 disposal 85,000
additions 120,950 balance c/d 186,450
total 271,950 total 271,450what opening balance should be included in the following periods trial balance for motor vehicles – cost at July 20×6?
A. $271,450 DR
B. $271,450 CR
C. $186,450 CR
D. $186,450 DRthe correct answer is D. but i cant get it. Pls help me!
You might need to have a look at lectures to clear your concepts. This one seems to be pretty straight forwards.. Lets see
So since its a motor vehicle cost account, that would be an asset to the company. So asset increase when we debit them and they decrease when we credit them
In this particular problem it says that there was a brought down (b/d) balance of 150,500 so thats on the debit side and then there are additions of 12950, again thats adding to the account so if we are adding we will write it on the debit side. On the other hand disposal clearly means we are getting rid of some machinery so we write that on the credit side.
Now we will simply see what have been done over the course so we had 150500 already and we added 120950 to it so thats total of 271450 and also we got rid of some machine worth 85000 so that brings the balance to 186450. Now this 186450 is debit heavy meaning debit is more so that means we will carry it down to next accounting period and start that my saying the brought down debit balance is 186450. So your answer is D
Hope this helps and again i will say do watch lectures coz they will really helpThank you so much but i need to ask where can i find lecture related to this topic. I did not find this in double entry bookkeeping lecture. can you one more ques for me, it is same like this format?
If you go through the bookkeeping lecture and understand the basic concept of bookkeeping, then it will make sense the more you will practice.
And yes you can ask and i will try to answer it.A companys trade payables account at 30 september 20×1 is as follows:
Trade Payables Account
Cash at bank 21,600 Balance b/d 14,000
Balance c/d 11,900 Purchases 19,500
total 33,500 total 33,500What was the balance for trade payables in the trial balance at 1 October 20×0?
A. $14,000 DR
B. $14,000 CR
C. $11,900 DR
D. $11,900 CRThe correct answer is B. but i got it A. please help me.
Yeah the answer would be B. Couple things to notice here. One that it is a payable account and payables are liability. Liability increases when you credit them and decreases when you debit them. Other thing is that it is asking for a balance for october 20×0. and the T account given here is for the end period 30 sept 20×1. So basically asking you to work backwards and tell the starting figure.
Given is cash at bank which means that you paid some amount to your suppliers so thats credit to you cash account and debit enty here in payables. Also there are purchases done and again that should be a credit balance here in payables coz you have not paid for it yet and the corresponding debit entry could be in inventory account or purchase account.
now we have to figure the balance brought down if thats a debit balance or credit. Since it is a payable account i would start by thinking that its a credit balance so lets see.DEBIT CREDIT
cash at bank 21600 balance brought down14000
Balancing figure 11900 purchases 19500total 33500 total 33500
So as you can see that the balance brought down has to be a credit enty, You can work it like this and put it on the debit side and you will see that the balancing figure will be different and will not reconcile
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