Form 3 Mathematics – ACCOUNTS msomimaktaba, November 13, 2018August 17, 2024 ACCOUNTSAccountsis a place in a ledger where all the transactions are relating to a particular asset, liabilities and capital, expenses,or revenue items were recorded. Accounts is a wider concept with identifying measuring and communicating economic information to permit informed judgments and decisions by users of the information. The part of accounting that is concerned with recording data is known as book keeping.Book keeping – is the art of recording financial business transactions on a set of books in terms of money or money’s worth.Why do we need to keep business records?To determine whether the business is making profit or loss.To determine financial strength of the business.To enable the government to access reliable resources.To enable different stake holders to make reliable decisions about the business i.e. investors, bankers, customers etc.THE DOUBLE ENTRY SYSTEMBefore looking at the system of double entry let us look at the meaning of business transactions. Transactions means movements of money,goods or services from one part/person to another. For example: Selling goods in cash Tshs 10,000/= or selling goods worth Tshs 10,000 on credit to Aisha.The double entry system – Is the process of recording these business transactionstwice.LEDGERSA ledger is a main principle book of accounts in which business transactions are recorded in double entry system.The ledger contains section called “Accounts” which contain detail of transactions for specific items each account bears a title and a number called folio i.e. page of the ledger.Each account should be shown on a separate page. The double entry system divides each page into two values; a. The left hand side is called the debit side b. The right hand side is called the credit side.The title of each account is written across the top of the account at the center so double entry system needs every debit entry should have corresponding credit entry. An example of a ledger; NAME OF THE ACCOUNTSDate Particulars folioAmount Date particularfolioAmount Each side of account should have four column i.e. date, particulars, folio and amount.Use of columns;i) Date column For writing year, month and date.ii) Particulars For short descriptions of the transactionsiii) Folio column For pages of referenceiv) Amount column For writing amount of moneyWorked examples on how to record transactions in double entry system;1. Juma starts business with Tshs 20,000/= in cash on 1st January 2006. The transaction needs to debit cash account and credit capital account as follows.Dr CASH ACCOUNTCrDate ParticularfolioAmount Date particularfolioAmount1/1/2006capital20,000Dr Capital account CrDate ParticularfolioAmount Date particularfolioAmount1/1/2006Cash20,000John started a business on 1st Jan 2000 with capital at Tshs 5,000,000 in cashJanuary 2) 2 purchased goods and paid in cash T.shs. ………… 1,000,000/=3) 3 Brought goods for cash. ………………… 500,000/=5paid wages in cash …………… 50,000/=7sold goods in cash …………… 300,000/=8brought goods in cash ………. 800,000/=9received loan from C.R.D.B………….. 70,000/=12bought parking materials in cash…….. 20,000/=28paid transport charges ……… 30,000/=28 drew cash for burial Tshs……….. 10,000/= Enter the above transaction in the ledger and complete the double entry Solution EXERCISE Mark commenced business on 1st June 2001 with capital Tshs. 1,000,000.June 2 bought for cash……… 500,000/=2 paid transport charges………….. 50,000/=3 bought parking charges………….. 10,000/=4sold goods for cash …………. 300,000/=5sold goods for cash…………… 100,000/=6purchased goods and paid cash… 180,000/=8paid wages …….38,000/=10 cash sales…… 200,000/=12 cash purchases…………. 180,000/=15 cash sales to date ……….. 250,000/=20 paid rent …………. 50,000/=Enter the above transactions in the cash account complete the double entry balance the accounts at the end of the month and extract a trial balanceTRIAL BALANCE AT THE END OF THE MONTH 30TH JUNE 2001NO. Details Debit Credit 1Cash872,0002Capital1,000,0003Purchases830,0004Transport50,0005Packing10,0006Sales850,0007Wages38,0008Rent50,000Total1,850,0001,850,000FIRMS NAME DR Trading account for the year ended CROpening stock xxxSales xxxAdd purchases xxxLess. RIN xxxLess outwards xxxNet sales xxxNet purchases xxxCost of goods availableFor sale xxxLess : closing stock xxxCost of goods sold xxxGross profit c/d xxxXxxXxxPROFIT AND LOSS ACCOUNTThis is an account prepared in order to ascertain the net profit and loss by the business. All expenses are debited to this account while gains or profits are credited to this account and debited with all incurred expenses.Note If the business has made profit it increases the capital and if it has suffered loss it reduces the capital.It’s lay out;FIRM’S NAME DRPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED CR Expense xxxNet profit xxx xxxGross profit b/d from trading account xxxOther gains [income]xxx xxxNote The excess of expenses over incomes is formed as net profit.ExampleFrom the following trail balance you are required to prepare a trading profit and loss account. For the year ended 30th June 2006 B Samanga.Trial balance as at 30th June 2006s/nNAME OF THE ACCOUNTDEBIT CREDIT1Sales3,8502purchases2,9003Rent2404Lighting expenses and general expenses1505Fixtures and fittings606Debtors3007Salaries6808creditors9109Cash in hand1,71010Bank2011Drawings70012Capital2000Note Closing stock was valued at Tshs 300. B Samanga and profit account. DR TRADING ACCOUNT B SAMANGA AS AT 30TH JUNE 2006 CROpening stock 0000Sales 3,850Add purchases 2,900R.Inward 0000Less R outwards – 0000Net sales 3,850Net purchases 2,900Add all receivablesCost of goods available for sale 2900Less closing stock -300Cost of goods sold 2,600Gross profitc/d 1,2503,8503,850Balanceb/d 1,250Expenses Rent 240Gross profit 1,250L and G 150Salaries 680Total expenses 1,070Net profit/balance c/d 1801,2501,250 Balance b/d net profit 180 BALANCE SHEET FOR THE YEAR ENDED 30TH JUNE 2006ASSETSLIABILITIESFixed assetsLong term liabilitiesFixture and fittings 60Capital 2,000Current assetsCreditor 910Stock 300Net profit 180Debtors 3003,090Less drawing – 700Bank 20Cash hand 1,710Total current assets 2,330Total fixed asset 2,3902,390 ALL NOTES FOR ALL SUBJECTS QUICK LINKS:AGRICULTURE O LEVEL PURE MATHEMATICS A LEVELBAM NOTES A LEVELBASIC MATH O LEVELBIOLOGY O/A LEVELBOOK KEEPING O LEVELCHEMISTRY O/A LEVELCIVICS O LEVELCOMPUTER(ICT) O/A LEVELECONOMICS A LEVELENGLISH O/A LEVELCOMMERCE O/A LEVELACCOUNTING A LEVELGENERAL STUDIES NOTESGEOGRAPGY O/A LEVELHISTORY O/A LEVELKISWAHILI O/A LEVELPHYSICS O/A LEVELMOCK EXAMINATION PAPERSNECTA PAST PAPERS Basic Mathematics Study Notes Form 3 Basic Mathematics Study Notes FORM 3MATHEMATICSPost navigationPrevious postNext postRelated Posts Basic Mathematics Study Notes Form 2 Mathematics – GEOMETRICAL TRANSFORMATIONS November 13, 2018August 17, 2024GEOMETRICAL TRANSFORMATIONS -A transformation changes the position, size, direction or shape of objects. -Transformation in a plane is a mapping which moves an object from one position to another within the plane. 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Basic Mathematics Study Notes Form 2 Mathematics – GEOMETRICAL TRANSFORMATIONS November 13, 2018August 17, 2024GEOMETRICAL TRANSFORMATIONS -A transformation changes the position, size, direction or shape of objects. -Transformation in a plane is a mapping which moves an object from one position to another within the plane. The new position after a transformation is called an image Examples of transformations are Reflection Rotation Enlargement and… Read More
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