Journals for one-off transactions
Equipment bought on credit, goods the owner takes home, a bill the owner pays privately. None has a day book, so each needs a journal.
In this room: 3 tasks, 9 questions
- An asset bought on credit, with VAT4 questions
- The owner and the business2 questions
- Does it need a journal?3 questions
Marlow Cycles buys an air compressor from Tooling Direct on credit. The net price is £800 and VAT is 20%. The business can claim the VAT back.
The asset is debited with the net price. The VAT is debited to the VAT account. The supplier is credited with the gross amount, because that is what must be paid.
Answer the questions below
3 more questions follow in this task.
The owner and the business are kept apart in the books. When something passes between them with no money through the business bank, it needs a journal.
- Goods taken by the owner
- debit Drawings, credit Purchases, at cost
- A business bill paid from the owner's own money
- debit the expense, credit Capital
Dev takes home tyres that cost the shop £90. He also pays the shop's insurance of £240 from his own private account. Ignore VAT.
Answer the questions below
1 more question follows in this task.
Ask two questions. Did money move through the business bank? Was it goods bought or sold on credit? If both answers are no, use the journal.
Capital brought in raises what the business owes its owner. Drawings lower it.
Answer the questions below
2 more questions follow in this task.