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Journal and Ledger Accounting Guide

The document describes a quiz for a class that involves journalizing, posting, and preparing an unadjusted trial balance for a sole proprietorship called Entity A. It lists 10 transactions throughout the period including the owner investing cash, acquiring equipment and inventory, a sale on credit, paying expenses, and owner withdrawals. Students are asked to journalize the transactions, post them to T-accounts to prepare a general ledger, and use the ledger to prepare an unadjusted trial balance for Entity A as of December 31, 20x1.

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Amie Jane Miranda
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897 views5 pages

Journal and Ledger Accounting Guide

The document describes a quiz for a class that involves journalizing, posting, and preparing an unadjusted trial balance for a sole proprietorship called Entity A. It lists 10 transactions throughout the period including the owner investing cash, acquiring equipment and inventory, a sale on credit, paying expenses, and owner withdrawals. Students are asked to journalize the transactions, post them to T-accounts to prepare a general ledger, and use the ledger to prepare an unadjusted trial balance for Entity A as of December 31, 20x1.

Uploaded by

Amie Jane Miranda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 6

Accounting Books – Journal and Ledger

NAME: Date:
Professor: Section: Score:

QUIZ: ACTIVITY

Entity A started operations during the period. The following were the transactions:

a. Mr. A, the sole owner of Entity A, invested ₱1,000,000 to the business.


b. Equipment costing ₱250,000 was acquired for cash.
c. Inventory costing ₱180,000 was acquired on credit. Entity A uses the perpetual inventory system.
d. Inventory costing ₱120,000 was sold for ₱400,000 on credit.
e. Accounts payable of ₱160,000 was settled.
f. Accounts receivable of ₱340,000 was collected.
g. Utilities expense of ₱60,000 was paid.
h. Salaries expense of ₱280,000 was paid.
i. Owner’s drawings during the period totaled ₱70,000.
j. Depreciation expense on the equipment for the period was ₱25,000.

Requirements:
a. Journalize the transactions above. Be sure to provide a brief description for each journal entry.
b. Post the transactions to the general ledger. Use T-accounts for this purpose. Arrange your T-
accounts in the following order: Assets, Liabilities, Equity, Income and Expenses.
c. Prepare the unadjusted trial balance of Entity A on December 31, 20x1. Be sure to provide a
proper heading for the trial balance.

“The fear of the LORD is the beginning of knowledge, but fools despise wisdom and instruction.” (Proverbs
1:7)
- END -

1
SOLUTIONS TO QUIZ:

Requirement (a): Journal entries

(a) Cash 1,000,000


Owner’s capital 1,000,000
to record the owner’s initial investment to the business
(b) Equipment 250,000
Cash 250,000
to record the acquisition of equipment
(c) Inventory 180,000
Accounts payable 180,000
to record the acquisition of inventory on credit

Accounts receivable 400,000


Sale 400,000
to record credit sale
(d)
Cost of sale (or Cost of goods sold) 120,000
Inventory 120,000
to charge the cost of inventories sold as expense

(e) Accounts payable 160,000


Cash 160,000
to record the settlement of accounts payable
(f) Cash 340,000
Account receivable 340,000
to record the collection of accounts receivable
(g) Utilities expense 60,000
Cash 60,000
to record the payment for utilities expense

(h) Salaries expense 280,000


Cash 280,000
to record the payment for salaries expense
(i) Owner’s drawings 70,000
Cash 70,000
to record the temporary withdrawals of the owner
(j) Depreciation expense 25,000
Accumulated depreciation - Equipment 25,000
to record the depreciation expense for the period

2
Requirement (b): Posting

ASSETS

LIABILITIES

EQUITY

3
INCOME

EXPENSES

4
Requirement (c): Unadjusted Trial Balance

Entity A
Unadjusted Trial Balance
December 31, 20x1
  Dr. Cr.
Cash 520,000
Accounts receivable 60,000
Inventory 60,000
Equipment 250,000
Accumulated depreciation - equipment 25,000
Accounts payable 20,000
Owner's capital 1,000,000
Owner's drawings 70,000
Sales 400,000
Cost of sales 120,000
Utilities expense 60,000
Salaries expense 280,000
Depreciation expense 25,000
Totals 1,445,000 1,445,000

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