question archive 1) Sani trading company extracted the following balances from its books on 31st December 2010
1) Sani trading company extracted the following balances from its books on 31st December 2010
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1) Sani trading company extracted the following balances from its books on 31st December 2010. Capital 24,000 Office furniture and equipment 8,000 Accumulated Depreciation (Furniture & Equipment) 3,276 Cash drawings 5,000 Stock on hand 1/1/2010 4,000 Purchases 20,600 Sales 41,200 Rent 430 Insurance 570 Salaries 700 Telephone & Postage 1,400 Discount allowed 500 Discount Received 900 bad debts Debtors 9,240 Petty cash 700 Provision for doubtful debts 260 Carriage inward 200 Creditors 6,450 Carriage outward 120 Returns inward 1,210 Returns ward 960 Land and Building 21,000 Bank 3,046 330 Required: From the extracted balance, prepare a trial balance for the year ended 31st December 2010
2. What are the relationships between sales day book, sales ledger and sales account.
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Answer:
1. Trial Balance for the year ended 31st Dec 2010
| Particulars | Debit | Credit |
| Capital | 24000 | |
| Office Furniture & Equipment | 8000 | |
| Accumulated Depreciation (Office Furniture & Equipment) | 3276 | |
| Cash Drawings | 5,000 | |
| Stock on hand 01/01/2010 | 4000 | |
| Purchases | 20600 | |
| Sales | 41200 | |
| Rent | 430 | |
| Insurance | 570 | |
| Salaries | 700 | |
| Telephone & Postage | 1400 | |
| Discount allowed | 500 | |
| Discount received | 900 | |
| Bad debts | 330 | |
| Debtors | 9240 | |
| Petty cash | 700 | |
| Provision for doubtful debts | 260 | |
| Carriage inward | 200 | |
| Creditors | 6450 | |
| Carriage outward | 120 | |
| Returns inward | 1210 | |
| Returns outward | 960 | |
| Land & buildings | 21000 | |
| Bank | 3046 | |
| Total | 77046 | 77046 |
2. Relationship between sales day books, sales ledger & sales account
The daily total of the sales of a comapny is listed in the sales day book.
After making note the daily sales in sales day book, it is then transferred to sales ledger. So the most detailed list of credit sales (Sales made on credit basis) made during the day is available in sales day book only, whereas in sales ledger, only the total of credit sales made is available.
Sales account is the ledger account of both cash and credit sales (net of sales returns) made during the accounting period, and the closing balance is transferred to trading account.
