MINISTRY OF EDUCATION

WORKSHEETS
“PRINCIPLES OF ACCOUNTS”
Grade: (10)
TERM: (II)

1
Contents
WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION .......................................................... 5
LESSON #1: Concept, purpose and functions of accounting ...................................................... 5
WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION .......................................................... 8
LESSON # 2: The users of Accounting Information ................................................................... 8
WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION ........................................................ 12
LESSON # 3: Traditional and emerging careers in accounting .................................................. 12
WEEK # 2 – TOPIC: ACCOUNTING AS A PROFESSION ....................................................... 15
LESSON # 1: Professional Ethics............................................................................................... 15
WEEK # 2 – TOPIC: ACCOUNTING AS A PROFESSION ....................................................... 18
LESSON # 2: Professional Ethics............................................................................................... 18
WEEK # 2– TOPIC: ACCOUNTING AS A SYSTEM ................................................................ 21
LESSON # 3: Revision lesson .................................................................................................... 21
WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 23
LESSON # 1: Accounting Concepts and Conventions ............................................................... 23
WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 27
LESSON # 2: Forms of Business Organizations – Sole Trader ................................................. 27
WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 30
LESSON # 3: Forms of Business Organizations – Partnership .................................................. 30
WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 32
LESSON # 1: Forms of Business Organizations – Cooperatives ............................................... 32
WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 35
LESSON # 2: Forms of Business Organizations – Companies .................................................. 35
WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 38
LESSON # 3: Forms of Business Organizations – Non -profit Organizations .......................... 38
WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 40
LESSON # 1: Types of Business Organizations and Financial Statements ............................... 40
WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 42
LESSON # 2: The Role and Impact of Technology on the Accounting Process ....................... 42
WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 45

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 LESSON # 3: Accounting Concepts ........................................................................................... 45
WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 47
LESSON # 1: The Accounting Conventions .............................................................................. 47
WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 49
LESSON # 2: Definition of Balance Sheet / Statement of Financial Position ........................... 49
WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 51
LESSON # 3: The Balance Sheet Equation /The Accounting Equation .................................... 51
WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 53
LESSON # 1: Preparation of Balance Sheet / Statement of Financial Position ......................... 53
WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 55
LESSON # 2: Preparation of Balance Sheet / Statement of Financial Position ......................... 55
WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM ............................................................... 57
LESSON # 3: Preparation of Balance Sheet / Statement of Financial Position ......................... 57
WEEK # 8: ACCOUNTING AS A SYSTEM ............................................................................... 59
LESSON # 1: Balance sheet- Effects of transactions on the statement of financial (balance sheet).
..................................................................................................................................................... 59
WEEK # 8: ACCOUNTING AS A SYSTEM ............................................................................... 63
LESSON # 2: Balance sheet - Effects of transactions on the statement of financial (balance sheet)
– cont’d ....................................................................................................................................... 63
WEEK # 8: ACCOUNTING AS A SYSTEM ............................................................................... 66
LESSON # 3: Simple Ledger accounts, Significance of ledgers, types and classes of ledgers . 66
WEEK # 9: ACCOUNTING AS A SYSTEM ............................................................................... 70
LESSON # 1: Transactions and the double - entry principles - ASSETS, LIABILITY and .... 70
CAPITAL.................................................................................................................................... 70
WEEK # 9: ACCOUNTING AS A SYSTEM ............................................................................... 74
LESSON # 2: Transactions and the double- entry principles ASSETS, LIABILITY and
CAPITAL.................................................................................................................................... 74
continues..................................................................................................................................... 74
WEEK # 9: ACCOUNTING AS A SYSTEM ............................................................................... 79
LESSON # 3: Transactions and the double - entry principles – EXPENSES, PURCHASES . 79
and SALES ................................................................................................................................. 79
WEEK # 10: ACCOUNTING AS A SYSTEM ............................................................................. 83
LESSON # 1: Transactions and the double - entry principles: DRAWINGS ACCOUNT........ 83

3
WEEK # 10: ACCOUNTING AS A SYSTEM ............................................................................. 85
LESSON # 2: Balancing off Accounts ...................................................................................... 85
WEEK # 10: ACCOUNTING AS A SYSTEM ............................................................................. 88
LESSON # 3: Trial Balance ....................................................................................................... 88
WEEK # 11: ACCOUNTING AS A SYSTEM ............................................................................. 91
LESSON # 1: Trial Balance cont’d............................................................................................ 91
WEEK # 11: BOOKS OF ORIGINAL ENTRY ............................................................................ 94
LESSON # 2: Purchases book, Purchases Ledgers and General Ledgers ................................. 94
WEEK #11: BOOKS OF ORIGINAL ENTRY ........................................................................... 100
LESSON # 3: Sales book, sales ledgers, source document and general ledger ....................... 100
WEEK # 12: BOOKS OF ORIGINAL ENTRY .......................................................................... 106
LESSON # 1: The Purchases returns book, source document, purchase return ledger and general
................................................................................................................................................... 106
ledger......................................................................................................................................... 106
WEEK # 12: BOOKS OF ORIGINAL ENTRY .......................................................................... 109
LESSON # 2: The Sales returns book, source document, sales returns ledger and general ledger
................................................................................................................................................... 109
WEEK # 12: BOOKS OF ORIGINAL ENTRY .......................................................................... 111
LESSON # 3: REVIEW: Sales journal, Purchases journals, purchases returns and sales returns
................................................................................................................................................... 111
WEEK # 13: BOOKS OF ORIGINAL ENTRY .......................................................................... 112
LESSON # 1: The Cash Book, source documents ................................................................... 112
WEEK # 13: BOOKS OF ORIGINAL ENTRY .......................................................................... 115
LESSON # 2: Two Column Cash Book .................................................................................. 115
WEEK # 13: BOOKS OF ORIGINAL ENTRY .......................................................................... 118
LESSON # 3: The Three Column Cash Book ......................................................................... 118
WEEK # 14: BOOKS OF ORIGINAL ENTRY .......................................................................... 121
LESSON # 1: The three-column cash book-bank overdrawn.................................................. 121
WEEK # 14: BOOKS OF ORIGINAL ENTRY .......................................................................... 123
LESSON # 2: Petty Cash Book .............................................................................................. 123
WEEK # 14: ACCOUNTING AS A SYSTEM ........................................................................... 126
LESSON # 3: Preparing the Petty Cash Book ......................................................................... 126

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 LESSON # 1

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION

LESSON #1: Concept, purpose and functions of accounting
CONTENT:
Concept of Accounting

The process of identifying, measuring and communicating economic information to permit

informed judgements and decisions by users of the information.

Form a business

Trade with others

Money circulates

Good Money Management

• Constant cash flow
• Create constant profit
• Remain in business

Good Management Bad Management Control

Control Loss
Profit Business fails
Business succeeds

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 Purpose of Accounting

The purpose of accounting is to accumulate and report on financial information about the
performance, financial position, and cash flows of a business. This information is then used to
reach decisions about how to manage the business, or invest in it, or lend money to it. This
information is accumulated in accounting records with accounting transactions, which are recorded
either through such standardized business transactions as customer invoices or supplier invoices,
or through more specialized transactions, known as journal entries.

Functions of Accounting:

1. Accounting helps in the maintenance of bookkeeping and record keeping.

2. Accounting helps in the collection and storage of the financial information and
transactions happening within the organization, and financial activities happening in the
organization.

3. It helps in the tracking of several financial information on a daily or a monthly basis.

4. It helps in the creation and documentation of financial history from day one to the latest
period.

5. It helps in the formulation of comprehensive financial policy for the business.

6. It is also utilized in the preparation of budgets and financial projections.

7. It also helps in the reconciliation of information between two sources of financial systems.

8. The accounted information can be shared with the external stakeholders with the intent
of business planning and growth.

9. Accounting does not focus on the activities about the capital budgeting.

10. It also helps in audit functions, and curbs the internal weakness as it makes the systems
accountable.

11. A business or an organization can prepare and work on several journals to maintain different
accounts.

12. A comprehensive accounting system ensures that the accounts of corporate expenses do not
get mixed with the personal accounts of vice presidents or managers. Such instances are
generally referred to as red flags.

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 ACTIVITY

Word Puzzle

Find the following words that relate to accounting: IDENTIFYING, JUDGEMENTS,

MEASURING, FINANCE, ACCOUNTING, USERS, INFORMATION,
COMMUNICATING, ECONOMIC, DECISIONS.
I D E N T I F Y I N G R A P E
N O R A G T K C W J O E U I A
F Z C V B J U D G E M E N T S
O I F R U K T Q Y L P A V G Y
R R W A R S A F U C L N A C T
M E G I Q D F G Y L R O I U S
A H H N F H I R T P O M N R N
T T T T I B R I P R O S T C O
I G I L N T E B C N M V Q T I
O N D A A H A S O X S Z U A S
N I U Q N R D C W A I O A R I
O T A R C C E B I T L T E I C
E N Z A E V W A Q N E S K K E
S U X C E F V N B M U Y G M D
I O D F H J K O L X S M A Y O
F C A S G N I R U S A E M I E
D C Q W E R T U Y I O P R O A
W A T E R A S I R A E T L P C

2. Explain, in your own words, any FIVE (5) functions of accounting and give examples to
illustrate your answer.
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________

…………………………………………………………………………………………………….
Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C. Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

7
 LESSON # 2

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION

LESSON # 2: The users of Accounting Information
CONTENT:
Internal Users of Accounting Information

Owners need to assess how well their businesses are performing.

Financial statements provide information to owners about the profitability of the overall business
as well as individual products and geographic segments. Owners are also interested in knowing
how risky the business is. Accounting information helps owners in assessing the level of stability
in business over the years.

Managers need accounting information to plan, monitor and make business decisions.
Managers need to allocate the financial, human and capital resources towards competing needs
of the business, through the budgeting process. Managers rely on accounting data to form their
business decisions such as investment, financing and pricing decisions.

Employees are interested in knowing how well a company is performing as it could have
implications for their job security and income. Many employees review accounting information
in the annual report just to get a better understanding of the company’s business. Moreover,
potential employees are also interested to learn about the financial health of the organization they
aspire to join in the future.

External Users of Accounting Information

➢ Investors need to know how well their investment is performing. Investors primarily rely on the
financial statements published by companies to assess the profitability, valuation and risk of their
investment, whether they should hold, increase or decrease their investment.

➢ Lenders use accounting information of borrowers to assess their credit worthiness, i.e., their
ability to pay back any loan. Lenders offer loans and other credit facilities on terms that are based
on the assessment of financial health of borrowers. On a lighter note, borrowers can only get a
loan from lenders if they can prove that they don’t need the money.

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➢ Suppliers need accounting information to assess the credit-worthiness of its customers before
offering goods and services on credit. Some suppliers only have a handful of customers. These
customers could be very large businesses themselves. Suppliers need accounting information of
its key customers to assess whether their business is in good health, which is necessary for
sustainable business growth.

➢ Customers: Most consumers don’t care about the financial information of its suppliers.
Industrial consumers however need accounting information about its suppliers in order to assess
whether they have the required resources that are necessary for a steady supply of goods or
services in the future. Continuity in supply of quality inputs is essential for any business.

➢ Tax Authorities determine whether a business declared the correct amount of tax in its tax returns.
Occasionally, tax authorities conduct audits of the tax returns filed by businesses in order to verify
the information with the underlying accounting records. Tax authorities also cross reference
accounting information of suppliers and consumers in order to identify potential tax evaders.

➢ Government ensures that a company’s disclosure of accounting information is in accordance

with the regulations that are in place to protect the interest of various stakeholders who rely on
such information in forming their decisions. Government defines and monitors accounting
thresholds such as sales revenue and net profit to determine the size of each business for the
purpose of ensuring that it complies with the relevant employee, consumer and safety regulations.

➢ Public: The General public may also be interested in accounting information of a company. These
could include journalists, analysts, academics, activists and individuals with an interest in
economic development.

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 ACTIVITY

1. Using pictures to depict all aspects of accounting information, compile a file with the users of
accounting information.

2. Identify THREE (3) internal users and THREE (3) external users of accounting information.

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

3. Explain TWO (2) purposes of internal users and TWO (2) purposes of external users of
accounting information.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

10
……………………………………………………………………………………………………………..
Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A Hachette
UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

11
 LESSON # 3

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK #1 – TOPIC: ACCOUNTING AS A PROFESSION

LESSON # 3: Traditional and emerging careers in accounting
CONTENT:

Commerce & Education Public Accountants Public Sector

Industry
Finance Directors Accountants Directors of Ministries Treasurers
Inland Revenue Officers
Chief Executive Officers Tax Consultants Financial Officers
Company Accountants Management Consultants Accounts Clerks
Finance Managers Company Secretaries Auditors
Bank Managers Receivers
Treasury Managers Liquidators
Tax Managers
Financial Controllers
Budget Controllers
Corporate Planners
Bank Officers
Internal Auditors
Lecturers
Teachers

ACTIVITY

1. Think of a career of your choosing, and investigate the requirements for that career.
a) List THREE (3) of those requirements.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

12
 b) Explain THREE (3) list of duties of that career.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

2. Research and analyze FIVE (5) advertisements of accounting jobs from the newspapers or other
sources available to see the differences in requirements.

3. Identify FIVE (5) non-business and FIVE (5) non-professional organizations that employ book-
keepers.
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

13
 ………………………………………………………………………………………………………..

Reference:
Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A Hachette
UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

14
 LESSON # 4

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 2 – TOPIC: ACCOUNTING AS A PROFESSION

LESSON # 1: Professional Ethics
CONTENT:

Ethics may be described as the morals governing human behaviour.

Professional ethics is referred to as ‘a code of behaviour considered correct

for a specific group or profession’.

Factors that influence ethical views:

➢ Culture – what is immoral or illegal in some cultures is acceptable behaviour in others. Thus,
ethics can differ across different cultures.

➢ Law – illegal behaviour is unethical even when the laws differ among countries. A company’s
code of ethics always states that an employee must abide by local laws of the country.

➢ Consequences – individuals usually react to ethical or unethical behaviour based on the

consequences.

➢ Code of ethics – when there is a code of ethics, behaviours are judged based on the respective
code.

Fundamental Principles of ethical behaviour:

➢ Integrity – A professional accountant should be straightforward and honest in all professional

and business relationships.

➢ Objectivity – A professional accountant should not allow bias, conflict of interest or undue
influence of others to override professional and business judgments. This means that as an
accountant in business, you must have independence of mind and judgment. If you are asked
or encouraged to become involved in unlawful activities, you must refuse.

15
 ➢ Professional Competence and Due Care - A professional accountant has a continuing duty to
maintain professional knowledge and skill at the level required to ensure that a client or employer
receives competent professional service based on current developments. This means that the
accountant must always be kept abreast with new developments in the field that is relevant to
what he/she does. A professional accountant should act diligently and in accordance with
applicable technical and professional standards when providing professional services.

➢ Confidentiality - A professional accountant should respect the confidentiality of information

acquired as a result of professional and business relationships and should not disclose any such
information to third parties without proper knowledge and specific authority, unless there is a
legal or professional right or duty to disclose. Confidential information acquired as a result of
professional and business relationships should not be used for the personal advantage of the
professional accountant or third parties.

➢ Professional Behaviour - A professional accountant should comply with relevant laws and
regulations and should avoid any conduct that discredits the profession. This includes:
ensuring, for example, that advertisements made by his/her firm are truthful and are not
made to deceive the public and rival firms.

ACTIVITY

Explain in your own words how each of the ethical behaviours listed above can impact a business; use
examples to illustrate your answer.
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

16
 ___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A Hachette
UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

17
 LESSON # 5

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 2 – TOPIC: ACCOUNTING AS A PROFESSION

LESSON # 2: Professional Ethics
CONTENT:
Appropriate application of ethical principles Inappropriate application of ethical principles

➢ Treat people with respect and courtesy ➢ Not working in the best interest of your
employer
➢ Act responsibly and honestly ➢ Being dishonest and untrustworthy

➢ Ensure confidentiality ➢ Disregarding confidentiality

➢ Be accountable for your actions ➢ Undermining colleagues

➢ Be trustworthy ➢ Accepting bribes or ‘gifts’ in return for favour

➢ Apply technical skills and competence ➢ Intimidation or harassment of colleagues to

gain an advantage in a particular area
➢ Avoid conflict of interest ➢ Causing conflicts
➢ Comply with legal requirements and
organization laws and regulations

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Appropriate application of Accounting Inappropriate application of Accounting
Principles Principles
➢ Competency – individuals must be ➢ Fraudulent financial reporting
competent and skilled in performing
their specific job.
➢ Willingness – individuals should act as ➢ Failure to record all sales
willing members of a team.
➢ Communication – individuals must be ➢ Theft of inventory
able to communicate within the team
environment.
➢ Continuous training – individuals ➢ Misappropriation of funds
should undertake training to improve
and update skills.
➢ Confidentiality - individuals must ➢ Entering non-existent employees on the
ensure confidentiality at all times. payroll
➢ Openness - individuals should be open
about their actions.
➢ Trust - individuals must rely on
information given by colleagues, and
trust their judgement.
➢ Honesty - individuals should be honest
and avoid telling lies.
➢ Accountability - individuals must
understand their responsibility and
must be held accountable.

19
 ACTIVITY

1. Name THREE (3) application of ethical principles.

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
2. Explain how any THREE (3) inappropriate applications of ethical principles can impact a
business.
______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

3. List and explain any TWO (2) application of accounting principles.

___________________________________________________________________
___________________________________________________________________

Reference:

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Oxford University Press, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A Hachette
UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan
Caribbean Publishers, 2004

20
 LESSON # 6

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 2– TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: Revision lesson
CONTENT:

1. Explain the term ‘Book-keeping’.

____________________________________________________________________________
____________________________________________________________________________
2. Explain the term ‘Accounting’.
____________________________________________________________________________
____________________________________________________________________________
3. (a) Imagine you want to open a hair solon/barber shop, and need financing to start your business.
Identify ONE (1) internal user and TWO (2) external users who may have interest in your
business.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

(b) State the interest in the business of ONE (1) of the external stakeholders.
____________________________________________________________________________
____________________________________________________________________________
State THREE (3) responsibilities that you would expect to find on the job description of a Book-
keeper working for a large charity.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

21
4. Identify THREE (3) qualities you would expect of a person applying to be a Book-keeper in
your business.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

5. Identify THREE (3) professional organizations that would employ Accountants.

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
6. Identify THREE (3) skills you would expect of a person applying to be an Accountant in your
business.

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

7. Identify ONE (1) ethical principle and explain what it means.

____________________________________________________________________________

8. Identify ONE (1) unethical principle and explain what it means.

____________________________________________________________________________

9. Give TWO (2) examples of inappropriate application of unethical principle. State the possible
consequences of each.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

22
 LESSON # 7

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 1: Accounting Concepts and Conventions
CONTENT:

Accounting Concepts – is the set of accounting rules which ensure that user
can have confidence in the information which is provided.

The Accounting Cycle – the sequence of events and the processes used to create
the financial record of a business.

Steps in the Accounting cycle

23
Explanation of each Stage in the Accounting process:

Stage 1: The collection of source documents that provide details for financial records.

Stage 2: Listing the key details in the various books of original entry. There are separate books of
original entry for credit sales, credit purchases, returns, cash and bank transactions, petty
cash transactions and other miscellaneous transactions.

Stage 3: Posting the information shown in the books of original entry to ledger accounts. There are
separate ledger accounts for each aspect of a business’s finances. Bookkeeping involves
the process of making two entries for every transaction in the ledger accounts; this is often
referred to as double entry bookkeeping.

Stage 4: Checking and control systems to ensure arithmetical accuracy; for example, preparing a
trial balance.

Stage 5: Summarizing financial information, at least annually, in the form of income statements,
statements of financial position (balance sheets) etc. These end of year financial statements
provide the main means of judging how well a business has performed, leading to key
decisions by owners, managers and other stakeholders about the future.

ACTIVITY

1. Paste the steps of the accounting cycle in correct order.

24
2. Make a Word Search Puzzle on the accounting cycle.

3. Unscramble the letters to make the correct word of the accounting cycle.

(a) R O C S U E S O C U N T E M D

(b) J A N O L R U S

(e) L R A T I N A L E C A B

(f) A I N F C L A I N T E N T M A E R D E G S T E

25
……………………………………………………………………………………………………..
Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A Hachette
UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

26
 LESSON # 8

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ______________________ Date: ____________________

WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 2: Forms of Business Organizations – Sole Trader
CONTENT:
SOLE TRADER
A Sole Trader is a one-person business and is sometimes referred to as a Sole Proprietor.

FEATURES OF A SOLE TRADER

➢
It is easy and inexpensive to become a sole trader.

➢
It is usually financed by the owner.

➢
They usually provide a personal service to their customers.

➢
The Sole trader bears all risks and suffers all losses, but he/she also enjoys all
profit.

EXAMPLES OF SOLE TRADER BUSINESSES

VENDOR HAIRDRESSER

27
 WEEDER GROCERY SHOP

Formation
➢ The name of the business is registered with the Guyana
Revenue Authority, and the relevant license is obtained from
the organization.

Source of Financing
➢ Personal assets and saving of the owner of the business.

Legal Responsibility
➢ The owner is personally accountable for all the debts of the business.

Management
➢ The owner supervises the day-to-day affairs of the business.

Effect of Profit/Loss
➢ The owner takes all profits and bears all losses.

ADVANTAGES AND DISADVANTAGES OF SOLE TRADER BUSINESS

# Advantages of Sole Trader Disadvantages of Sole Trader

Finance can be difficult to raise as they are
1. It can be easily and quickly formed. seen as high-risk by banks.

Only one owner means a narrow range of

The sole trader accounts to himself or herself skills.
2. only.

28
 3. Decisions can be made quickly because he/she Having unlimited liability can endanger
has no one with whom to consult. personal possessions.
4. All the profits belong to him/her. Prices are often higher than those of larger
organization.
He/she enjoys a personal relationship with Illness, holidays and death etc., may affect
5. his/her customers. the running of the business.

Small scale limits discount and other

A sole trader business can progress and grow benefits of large-scale production.
6. into a large company.

ACTIVITY

State whether each of the following statements is “true or false”:

a) All profit belongs to the sole trader. ……………..

b) His business will be stagnant (cannot grow) if unable to

access loans to expand. ……………..

c) He is distant from customers. ….………….

d) It is not expensive to set up. ……………..

e) He accounts only to himself. ……………..

f) A sole trader has unlimited liability. Imagine you are a sole trader who has run bankrupt.
Explain what ‘limited liability’ means and how this can affect you.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

……………………………………………………………………………………………………..

Reference:

Dransfield, R and Butcher, S. et al., Principles of Business, Oxford University Press

Publishers, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

29
 LESSON # 9

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 3 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: Forms of Business Organizations – Partnership
CONTENT:
Ownership
This business is owned by two (2) – twenty (20) individuals called partners.
Formation
A partnership is formed by a ‘Deed of Partnership’ signed by all partners and contains the
following information:

➢
Number of partners
➢
Amount of capital contributed by each partner
➢
Type of trade engaged in
➢
Share of profits or losses accruing to each partner
➢
Name of partnership
➢
Salary of each partner
➢
Mechanism for dissolution

Source of Financing
➢ Each partner contributes an agreed amount of capital towards the business.

Legal Responsibility
➢ Unless otherwise stated, each partner is responsible for a share of debts of the business.

Management
➢ Partners may or may not help to manage the day-to-day affairs of the business; large
businesses employ professional managers.
Effect of Profit/Loss
➢ Partners share profits/losses according to Partnership Agreement or Partnership Act.
30
 ADVANTAGES AND DISADVANTAGES OF A PARTNERSHIP BUSINESS

# Advantages of a Partnership Disadvantages of Partnership

1. A partnership is easy to form without legal All partners stand to lose if one makes a
formalities. mistake.
2. More capital can be raised by the combined Capital is limited.
resources of partners.
3. Specialization in management is possible as each Generally unlimited liability.
partner may participate in the field in which he has
experience and training.
4. The workload is shared among partners. There is a risk of disagreement and
quarreling with other members.
5 It can progress and grow into a large company. Increase in operation cost as a result of
higher overhead costs.

ACTIVITY

Say whether each of the following statements is ‘true’ or ‘false’ write your answers in the lines
provided:

1. The maximum number of persons who can form a partnership is twenty (20). ………..

2. A Deed of Partnership governs a partnership. ………..

3. The main aim of a partnership is to make a profit. .………...

a) Explain the effect of profit and loss on the partnership business.
________________________________________________________________________
________________________________________________________________________

……………………………………………………………………………………………………….

Reference:

Dransfield, R and Butcher, S. et al., Principles of Business, Oxford University Press

Publishers, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004
31
 LESSON # 10

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 1: Forms of Business Organizations – Cooperatives
CONTENT:
CO-OPERATIVES
What is a co-operative?

A cooperative is a business organization that is owned and operated by its members.

Members are generally a group of people with corresponding interests who have
established the cooperative society.

TYPES OF CO-OPERATIVES
➢
Consumer Cooperatives - these provide members with goods and services
e.g., food and fuel.
➢
Producer Cooperatives - these are usually agricultural in nature and provide
members with purchasing, marketing and transport services.
➢
Financial Cooperatives - members pool their savings in order to secure
credit for themselves at low costs e.g., Credit Unions.
➢
Service Cooperatives - these provide their members with a variety of
services normally considered prohibitive e.g., healthcare, housing.

32
Ownership Legal Responsibility
➢ This business is owned ➢ The Co-operative
by a number of Society, and not the
individuals called members, is responsible
members. for the debts.
Formation Management
➢ This business is formed ➢ The members volunteer
by the Co-operative to run management
Societies Act. committees, though
there may be a
professional Manager.
Source of Financing Effect of Profit/Loss
➢ Each member buys a ➢ Surplus is shared via
number of shares at a dividends, but some
fixed price issued by surplus is retained by
the co-operative the Co-operative
society. Society.
Ownership
➢ This business is owned by a number of individuals called members.

ADVANTAGES AND DISADVANTAGES OF COOPERATIVES

# Advantages of Cooperatives Disadvantages of Cooperatives

1. There is a guaranteed market for members. Management may be poor and

inexperienced.
2. Little or no advertising costs are incurred. Lack of capital may cause problems.

3. There is no profiteering. Capital-base is limited.

4. There is a democratic form of management. It may be unable to attract skilled

professionals.

33
ACTIVITY

1. What is the effect of profit or loss on the cooperative?

_________________________________________________________________________
_________________________________________________________________________

2. Explain how a cooperative is formed.

_________________________________________________________________________
_________________________________________________________________________
3. How many persons make up a cooperative?
_________________________________________________________________________
_________________________________________________________________________
4. Provide TWO (2) examples of the different types of cooperatives for the categories listed

below:
➢
Consumer Cooperatives: …………………………………………………….....

➢
Producer Cooperatives: ………………………………………………………….

➢
Financial Cooperatives: …………………………………………………………

➢
Service Cooperatives: ………………………………………………………….

➢
Workers Cooperatives: ……………………………………………………….

………………………………………………………………………………………………..
Reference:

Dransfield, R and Butcher, S. et al., Principles of Business, Oxford University Press

Publishers, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

34
 LESSON # 11

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 2: Forms of Business Organizations – Companies
CONTENT:
DEFINITION:

A Limited Liability Company is an organization owned by its shareholders, whose

liability is limited to their share capital.

NOTE:
A limited liability company is a business whose owners’ liability for the business’ debts is limited
to the amount of money that they would have invested in shares in the business, so their personal
possessions cannot be lost.

ACTIVITY
1. Define the term ‘shares.
2. How are shares in a company distributed?
3. What do we call the shares in a company?

35
Ownership Source of Financing
➢ This business is owned by a number of ➢ Each Shareholder buys a number of
individuals called shareholders. shares at varying prices issued by the
business.
➢
Effect of Profit/Loss Legal Responsibility
➢ Profits are shared via dividends, but ➢ The company, and not the
Shareholders, is responsible for the
some profits are retained by the
business’ debts.
company.

Management
➢ There is a clear separation of Management (Chairman & Board of Directors) and
Ownership (Shareholders).

Formation
➢ This business is formed by the Company Act or Certificate of Registration after
submitting the following documents: Memorandum of Association, Articles of
Association and Prospectus or Statement of Capital of Shareholders.

ADVANTAGES AND DISADVANTAGES OF LIMITED LIABILITY COMPANY

ADVANTAGES DISADVANTAGES
➢ The owners (shareholders) of the ➢ A limited liability company must
company have limited liability. conform to government regulations and
legislation.
➢ In law, a limited company is a
‘separate legal entity’. ➢ Shares in a private limited company
can only be bought and sold in private.
➢ Capital can be more readily raised to
fund expansion. ➢ The decision-making process can
take a longer time than in smaller
➢ The long-term viability is not affected organizations, such as, sole traders
by the death of the owners and partnerships.
(shareholders).

36
 ACTIVITY

1. Identify THREE (3) advantages of a Limited Liability Company.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. What is the effect of profit or loss to the Limited Liability Company?
___________________________________________________________________________
___________________________________________________________________________
3. How are profits shared in a company?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

………………………………………………………………………………………………………..

Reference:

Dransfield, R and Butcher, S. et al., Principles of Business, Oxford University Press

Publishers, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

37
 LESSON # 12

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 4 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: Forms of Business Organizations – Non -profit Organizations
CONTENT:
Ownership Legal Responsibility
➢ This business is owned by a ➢ The Club, and not the members, is
number of individuals called responsible for the debts.
members.

Formation Management
➢ This business is formed by the ➢ The members volunteer to run management
members who have a common committees though there may be a
interest. professional Manager.
Effect of Profit/Loss
➢ Surplus is retained in the business for the sustenance of itself.
Source of Financing
➢ Members pay entrance fee or life membership fee or subscription fee;
➢ Donations are received from other individuals or business and fund-raising activities.

FEATURE OF NON- PROFIT ORGANIZATIONS

➢ Non –profit organizations exist for the benefit of their members.

➢ They are not formed with the aim of making a profit.
➢ They are often funded through membership subscriptions.
➢ They are usually run by some members.

38
 EXAMPLES OF NON-PROFIT ORGANIZATIONS IN GUYANA

➢ Guyana Medical Relief

➢ Greenlight Guyana Educational Project, Inc.
➢ Christ Church Secondary School of Guyana Alumni Association, Inc.
➢ Blossoms of Guyana
➢ Heart for Guyana
➢ Guyana Unity Movement, Inc.
➢ Daughters of Guyana, Inc.
➢ Guyana Lutheran Music Academy

ACTIVITY

1. Identify THREE (3) examples of Non-profit Organizations in Guyana.

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

2. Choose ONE (1) of the examples in question one and explain the purpose of that
organization.
_________________________________________________________________
_________________________________________________________________

3. What is the effect of profit or loss on Non-Profit Organizations?

_________________________________________________________________
_________________________________________________________________
………………………………………………………………………………………………….

Reference:

Dransfield, R and Butcher, S. et al., Principles of Business, Oxford University Press

Publishers, 2019

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

39
 LESSON # 13

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 1: Types of Business Organizations and Financial Statements
CONTENT:

Sole Trader
➢ Income Statement (Trading & Profit & Loss Account)
➢ Statement of Financial Position (Balance Sheet)

Partnership
➢ Income Statement (Trading & Profit & Loss Account)
➢ The Appropriation Account
➢ Current Account
➢ Statement of Financial Position (Balance Sheet)

Limited Liability Company

➢ Income Statement (Trading & Profit & Loss Account)
➢ The Appropriation Account
➢ Statement of Financial Position (Balance Sheet)
➢ Cash Flow Statement

Co-operative
➢ Income Statement (Income & Expenditure Account)
➢ The Appropriation Account
➢ Statement of Financial Position (Balance Sheet)

Non-Profit Organization
➢ Income Statement (Income & Expenditure Account)
➢ Statement of Financial Position (Balance Sheet)

40
ACTIVITY

Collect samples of financial statements of different types of business organizations.

………………………………………………………………………………………………………..

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

41
 LESSON # 14

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 2: The Role and Impact of Technology on the Accounting Process
CONTENT:

(A) Software currently being used in accounting:

Microsoft Excel Programmes
Spreadsheets
Peachtree
Quick-books

(B) Accounting processes which could be readily performed by the use of the computer, for
example: payroll, inventory control, receivables and payables schedules.

(C) Advantages of using the computer in accounting:

Neat and tidy presentation
Accurate information
Quick accessibility
Easy & ready to use
Transparency

(D) Disadvantages of using the computer in accounting:

• Heavy cost of installation

• Cost of training
• Fear of unemployment
• Disruption of work.
• System failure
• Time consuming

42
ACTIVITY

1. What is a computer?
___________________________________________________________________________
___________________________________________________________________________

2. List FIVE (5) peripheral devices that are part of the computer and helps to make the accounting
process efficient and effective?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

3. TASK: Get a print out of the spreadsheet page and /or go on the computer and open the page.

4. TASK: Attempt to create an accounting record of your choice.

5. Write a report about your experience with creating the accounting record

43
……………………………………………………………………………………………………….

Reference:
Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

44
 LESSON # 15

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 5 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: Accounting Concepts
CONTENT:

➢ The Separate Entity Concept is also known as the Business Entity Concept, which
clearly states that the business and its owner are two distinct entities, for example: Steve
Persaud and Steve’s Jewellery World.

➢ The Going-concern Concept states that a business would continue for a long time or
indefinite period, for example: Banks DIH Ltd has been operating for a very long time in
Guyana.

➢ The Accrual or Matching Concept outlines that net profit is the difference between
revenues earned and expenses incurred within the financial year and not the difference
between the revenue received and expenses paid for the year.

NOTE: Expenses are considered incurred when services are used up, even though payments for
the expenses have not been made. For example: the monthly rental of a shop is $1000. The yearly
rental expenses recorded in the books of accounts should be $12,000 ($1000 x 12) although actual
payment made on rental was only $10,000.

Rental expenses of $2000 are considered expenses incurred but not yet paid and must be accrued
and added to the amount paid ($10,000 + $2000) to arrive at the total rental expenses incurred for
the period under review. This same principle is applied to revenues, which are considered earned
when goods are sold or services are performed even though money has not been received.

45
ACTIVITY

1. Give THREE (3) examples of the ‘Separate Entity Concept’ in your community of business.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

2. State THREE (3) businesses in Georgetown, that have been in existence for more
than 5 years, from which you enjoy shopping.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

3. Outline TWO (2) examples of expenses and TWO (2) examples of revenues that a
business is likely to have, and apply the Accrual Concept to show your understanding.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

……………………………………………………………………………………………………..

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

46
 LESSON # 16

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 1: The Accounting Conventions
CONTENT:

➢ Prudence (Conservatism) Convention is the use of cautious accounting practices.

Accountants tend to understate rather than overstate the profits and assets of the business
since all expected losses are to be reported but not all expected gains. All gains are only
reported when they are realized.

According to this convention, if an accountant is faced with two alternatives of reporting an

item, the alternative which gives a lower profit or lower asset value should be chosen.

For example, when two values of the closing inventory are given, that is, the cost is
$50,000 and the market value is $55,000, the lower value is chosen over the market value
so that the profit will not be overstated.

➢ Consistency Convention states that when a business uses a certain method for accounting
treatment of an item for the financial year, it should maintain the same method of treatment
of the same item for other ensuing financial years thereafter.

In other words, the business must maintain consistency in the treatment of the item for
all financial year as long as the item is in the business. For example, the methods of
valuing inventory and calculating depreciation of non-current assets should be the same
throughout all financial year.

This convention however does not prevent changes to be made if there is a valid reason
for doing so, as long as the effects of such changes are disclosed.

➢ Objectivity Convention explains that in the preparation of the financial reports, when the
method used is normally practiced and agreed upon, it is said to be objective. However,
when the financial reports are prepared according to our own methods and our own concepts,
which others do not accept, it is said to be subjective.
47
NOTE: The Objectivity Convention requires the accounting information to be recorded on a
factual basis. Therefore, the actual cost paid instead of the current market value is used. The cost
stated in the source document provides the objective evidence of the transaction. To be objective,
each entry in the accounts must be supported by documentary evidence.

ACTIVITY

TASK: Prepare a speech to be delivered to newly accredited accountants encouraging them to

observe the accounting conventions. Use examples, as far as practicable, to clarify that concepts
explicitly stated in the source document provide the objective evidence of the transaction. To be
objective, each entry in the accounts must be supported by documentary evidence.

………………………………………………………………………………………………………

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

48
 LESSON # 17

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 2: Definition of Balance Sheet / Statement of Financial Position
CONTENT:
Definition of Balance Sheet / Statement of Financial Position

A Balance Sheet is a financial statement showing assets, liabilities and

capital of a business at a particular date.

Purpose of Balance Sheet / Statement of Financial Position

A Balance Sheet is prepared to determine the financial position or status of a business, at a
specific date.

Components of a Balance Sheet / Statement of Financial Position:

➢ Assets – resourced owned by the business, for example: office equipment and cash. Assets
have monetary value and provide a benefit to the owner.
➢ Liabilities – resources owed for by the business, for example: mortgages and accounts
payables.

➢ Capital or Owner’s Equity – resources supplied to the business, for example: cash
and other assets.

Cash is an important asset for all businesses. Usually, this asset is separated into two categories:

➢ Cash in hand - money in the form of notes, coins, cheques, etc., which are at the business
premises.
➢ Cash in bank - all money which has been transferred by the owner of the business to the
business’ current account.

49
 ACTIVITY

1. Identify a small business in your community and list FIVE (5) assets and TWO (2)
liabilities.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
2. Identify a large business in Guyana and list SIX (6) assets and THREE (3) liabilities.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

3. Classify the following into assets, liabilities, and capital:

a) Cash in hand f) Cash at bank

b) Equipment g) fittings
c) Amounts owing to suppliers h) Furniture
d) Value of owner’s stake in the i) Land
business j) Loan from a friend
e) Amounts owed by customers

Assets Liabilities Capitals

………………………………………………………………………………………………….
Reference:
Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

50
 LESSON # 18

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 6 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: The Balance Sheet Equation /The Accounting Equation
CONTENT:
Balance Sheet Equation / The Accounting Equation
The relationship between assets, liabilities and capital can be expressed in terms of an
equation called the accounting equation or the balance sheet equation.

Resources: what they are = Resources: who supplied them

(Assets) = (capital + liabilities)
. Assets = =Capital + Liabilities
Complete the table below, an example is provided below:

Example 1: assets = capital + liabilities

? = 12000 +3000
Ans.: Assets = 15 000

ACTIVITIES

Seq Assets Liabilities Capital

# $ $ $
1 ? 3 000 12 000
2 10 000 5 000 ?
3 16 000 ? 7 000
4 ? 4 600 15 800
5 19 200 6 300 ?
6 20 800 ? 12 900
7 ? 2 550 6 730
8 22 640 9 780 ?
9 25 350 ? 10 460
10 ? 7 140 12 850

51
 ACTIVITY

……………………………………………………………………………………………………

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

52
 LESSON # 19

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 1: Preparation of Balance Sheet / Statement of Financial Position
CONTENT:

GLOBAL STATIONERY MALL

Statement of Financial Position (Balance Sheet)
As at 31 December, 2019

Assets $ $ $
Land and building 25,000
Office equipment 10,000
Closing inventory 6000
Accounts receivable 14,000
Bank 3000
Cash 2000
50,000
Less: liabilities
Accounts payable 5000
Mortgage 15,000 20,000
30,000

Capital:
Owner’s equity/capital 30,000

Simple Balance Sheet in Vertical Style

53
ACTIVITY

Prepare Mr. Rabindranauth Singh’s Statement of Financial Position (Balance Sheet) as at June
30, 2020 from the following information:

Items $
Premises 45 570.00
Inventory 3 290.00
Loan from NBIC (under
12 months) 26 370.00
Cash in hand 5 345.00
Accounts payable 13 925.00
Cash at bank 12 780.00
Machinery 38 960.00
Owner’s Equity 68 280.00
Accounts receivable 2 630.00

…………………………………………………………………………………………………….

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

54
 LESSON # 20

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 2: Preparation of Balance Sheet / Statement of Financial Position
CONTENT:

Terms What they are

➢ Non-Current Assets ➢ have a long life and are to be used in the

business, for example: Machinery.

➢ Current Assets ➢ are assets that will be turned into cash

within one year, for example: closing
inventory.
➢ Non-Current Liabilities ➢ are debts that will be settled in the longer
term, which is usually more than a year,
for example: loan from a mortgage.
➢ Current Liabilities ➢ are debts owed by the business that
will be paid within one year, for
example: accounts payable.
➢ Equity ➢ another name for capital.
➢ Net current assets / working capital ➢ current assets minus current
liabilities.
➢ Financed by ➢ how the owner would finance the
business, for example: capital or
owner’s equity.
➢ Bank overdraft ➢ When the owner withdrew more
money than he has in the business’
current account.
➢ Drawing ➢ Money or goods taken out of the
business by the owner for his/her
private use.

55
ACTIVITY

1. Classify the following under the correct headings:

a) Cash in hand f) Bank Overdraft

b) Loan from GNCB g) Motor Vehicles

c) Office Machinery h) Accounts Receivable

d) Accounts Payable i) Mortgages

e) Closing Inventory j) Bank Balance

Non-Current Assets Current Assets Non-Current Current Liabilities

Liabilities

………………………………………………………………………………………………………………………

Reference:

Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

56
 LESSON # 21

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: _______________________ Date: ____________________

WEEK # 7 – TOPIC: ACCOUNTING AS A SYSTEM

LESSON # 3: Preparation of Balance Sheet / Statement of Financial Position
CONTENT:

Classified Vertical balance sheet style:

Massy Beverage department

Statement of Financial Position (Balance Sheet)
As at 31 December, 2021

Non-current assets / Fixed assets: $ $ $

Land and building 25,000
Office equipment 10,000
Fixtures and fittings 6000
41,000

Current assets:
Closing inventory 6000
Accounts receivable 14,000
Cash 2000
22,000
Less: Current liabilities
Accounts payable 5000
Bank overdraft 3000 8000
Net current assets/ working capital 14,000
27,000

Less: Non-current liabilities:

Mortgage 10,000
17,000

Financed by:
Owner’s equity/capital 17,000

57
ACTIVITY

……………………………………………………………………………………………………
Reference:
Robinson, S. and Wood, F., Principles of Accounts for the Caribbean, Hodder Education, A
Hachette UK Company Publishers, 2018

Holdip, G. and Lamorell, C., Principles of Accounts for the Caribbean, Macmillan Caribbean
Publishers, 2004

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Oxford University Press,
2019.

58
 LESSON # 22

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 8: ACCOUNTING AS A SYSTEM

LESSON # 1: Balance sheet- Effects of transactions on the statement of financial (balance sheet).
CONTENT: What are transactions?

Transaction is a financial activity or financial event

➢ Cash Transaction: Cash transactions are financial activities that involve the use of
money.
➢ Credit Transaction: Credit transaction is a financial activity where the payment or
receipt of money is delayed.

HOW TRANSACTIONS AFFECT STATEMENT OF FINANCIAL POSITION (BALANCE

SHEET) ITEM
Every time a transaction occurs, items on the statement of financial position (balance sheet) will
change. Whatever the transaction, the accounting equation will always apply. In this lesson, you will
see how a variety of transactions affect the statement of financial position (balance sheet) of one
business over a period of a few days. The illustrations include both cash and credit transactions.
They show transactions that affect:
➢ assets only
➢ assets and liabilities
➢ assets and capital

59
EXAMPLE 1:
A business purchases a vehicle for $15,000 and pays by cheque.
The statement of financial position (balance sheet) of a business on December 1, 2017 is shown
below:

Statement of Financial Position (balance sheet) at

December 1, 2017
$ $
ASSETS Capital 70,000
Equipment 25,000
Bank 45,000
70,000 70,000

On December 2, 2017 the owner of the business purchased a vehicle for use by the business
and paid $15,000 by cheque.
STEP 1: how the transaction affects items on the balance sheet:
➢ A new asset will appear on the statement of financial position (balance sheet): vehicle
+$15,000.
➢ The asset bank will have to be reduced because a payment has been made: bank - $15,000.

NOTE: The capital figure is not affected by this transaction.

Step 2: Redraft the statement of financial position after the transaction has occurred.

Did you Statement of Financial Position (balance sheet) at

notice that December 2, 2017
two items on $ $
the balance ASSETS Capital 70,000
sheet were Equipment 25,000
Vehicle 15,000
affected by
Bank 30,000
the
70,000 70,000
transaction?

60
EXAMPLE 2
THE BUSINESS PURCHASES SOME FURNITURE, VALUED $10,000 ON CREDIT
On December 3, the business purchased some furniture, valued $10,000 on credit.
STEP 1: How the transaction affects the items on the statement of financial position (balance sheet):
➢ A new asset will appear on the statement of financial position (balance sheet):
furniture +$10,000
➢ A liability will appear on the statement of financial position: payable + $10,000.

NOTE: In this transaction, the business has acquired one more asset, (hence an increase in the value
of assets). However, rather than paying for it immediately, it has purchased the asset on credit, that
is, paying for it at a future date. Once again, no change to capital.
STEP 2: Re-draft the statement of financial position.
Did you notice
that two items
on the balance
sheet were
affected by the
transaction?

Statement of Financial Position (balance sheet)

at 3rd December 2017
$ $
ASSETS Capital 70,000
Equipment 25,000
Vehicle 15,000 LIABILITY
Furniture 10,000 Account payable 10,000
Bank 30,000
80,000 80,000

61
ACTIVITY

Adam opened his business on March 1, 2018. His business’ first statement of financial position
(balance sheet) is shown below:

Adam’s Hardware Store

Statement of Financial Position (balance sheet)
at 1st March,2018
$ $
ASSETS Capital 40,000
Vehicle 12,000
Bank 28,000
40,000 40,000

In the first few days the business was in operation, the following transactions occurred:
1. March 2: purchased equipment for $15,000, paid by cheque.
2. purchased furniture for $8000, on credit.
3. borrowed $15,000 from the bank; these funds were paid into the business’s bank account.
4. Adam withdrew a cheque for $3000 for private use.
5. Paid an account payable $6000, by cheque.

TASK: Prepare an updated statement of financial position (balance sheet) after each transaction.

………………………………………………………………………………………………………

Reference

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations
Council Study Guide, Nelson Thornes, 2012.

62
 LESSON # 23

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 8: ACCOUNTING AS A SYSTEM

LESSON # 2: Balance sheet - Effects of transactions on the statement of financial (balance sheet)
– cont’d
CONTENT:
EXAMPLE 3
THE Drawings:
OWNER TAKES $1000 FROM
the withdrawal THEfrom
of money BANK
the ACCOUNT FOR
business by the PRIVATE
owner, USE use.
for private

On December 4, the owner of the business withdrew $1000 from the business’ bank account
for private use.

STEP 1: How the transaction affects the items on the statement of financial position (balance sheet):
➢ The asset bank will be reduced by $1000: Bank - $1000.
➢ The owner’s investment in the business will be reduced by $1000: capital - $1000.

NOTE: In this transaction, the value of one of the business’ assets has been reduced. At the same
time, the amount the owner invested has been reduced.

STEP 2: Re-draft the statement of financial position.

Did you
Statement of Financial Position (balance sheet) at 4th
notice that
December, 2017
two items on
$ $
ASSETS Capital 69,000 the balance
Equipment 25,000 sheet were
Vehicle 15,000 LIABILITY affected by
Furniture 10,000 Accounts 10,000 the
Bank 29,000 Payable
79 000 79,000

63
SOME MORE TYPICAL TRANSACTIONS
The table below gives some more examples of transaction and how each of these would affect a
statement of financial position (balance sheet):

ACTIVITY
In the table below, re-calculate the figures for total assets, capital and total liabilities
after each transaction that has occurred.

64
……………………………………………………………………………………………………..
Reference

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations
Council Study Guide, Nelson Thornes, 2012

65
 LESSON # 24

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 8: ACCOUNTING AS A SYSTEM

LESSON # 3: Simple Ledger accounts, Significance of ledgers, types and classes of ledgers
CONTENT:
Using T account
Example of T Account

Significance of Ledgers:
➢
They are the third step of the accounting cycle.
➢
All businesses use the ledgers.
➢
They are done in a book or on the computer.
➢
They contain different classes of accounts.
➢
They are very transparent.

66
Types of Ledgers

1. Sales ledger (Accounts Receivable Ledger) contains names of persons who bought
goods from the business on credit. This ledger is kept just for customers’ personal
account.
2. Purchases ledger (Accounts Payable Ledger) contains names of persons whom the
business bought goods on credit from to sell to customers.

3. General ledger- This contains the remaining double entry accounts such as expenses,
fixed assets and capital, etc. It contains nominal, real, liability and capital accounts.

Classes of Accounts
Ledgers accounts can be divided into different categories. They are:
1. Nominal Accounts: recording gains (incomes) and losses (expenses)
2. Real accounts: asset account
3. Personal accounts: the accounts of people or organizations that have supplied goods or
services or credit, or to whom goods or services have been sold on credit.

Examples of Nominal, Real and Personal accounts:

Nominal Real Personal

Expenses Premises Accounts Payable
Purchases Machinery Accounts receivable
Sales Equipment

67
 Discounts Received Motor vehicles
Interest Received Furniture and Fittings

NOTE: There are also:

1. Liability accounts: for amounts due to other organizations.
2. Capital accounts: for accounts recording the interest of the owner (s) of the business.

ACTIVITY

CLASSIFYING LEDGER ACCOUNTS

Complete the table. Identify the type of account and the ledger in which the account
would be recorded. The first item has been answered, as an example.
1.

2.

68
………………………………………………………………………………………………………..
Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019
Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations
Council Study Guide, Nelson Thornes, 2012

69
 LESSON # 25

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 9: ACCOUNTING AS A SYSTEM

LESSON # 1: Transactions and the double - entry principles - ASSETS, LIABILITY and
CAPITAL
CONTENT:
The rules for making entries for transactions are summarized below:
NOTE: When making entries in “Real Account”:
ASSET ACCOUNTS
DEBIT CREDIT
Increases in assets Decreases in assets
Examples: Examples:
➢ Receiving cash ➢ Making a cash payment
➢ Purchasing an asset ➢ Selling an asset
➢ Selling goods on credit to a customer ➢ Credit-customer settles amount due

LIABILITY ACCOUNTS
DEBIT CREDIT
Decreases in liabilities Increases in liabilities
Examples: Examples:
➢ Paying a credit supplier ➢ Purchasing goods on credit from a
➢ Repaying a loan supplier
➢ Taking out a loan

70
 CAPITAL ACCOUNT
DEBIT CREDIT
Decreases in capital Increases in capital
Example: Example:
➢ The owner withdraws capital ➢ The owner introduces capital
(drawings)

NOTE: When making entries in Nominal Accounts

EXPENSE ACCOUNT
DEBIT CREDIT
Expense payments Receipts of income
Example: Examples:
➢ Paying rent, wages, repairs, etc. ➢ Sales of goods on credit or for cash
➢ Purchasing goods for resale ➢ Receipts of rent from a tenant,
interest received on investment

NOTE:

PREPARING SIMPLE LEDGER ACCOUNTS

A ledger account is a record of transactions affecting a particular aspect of the affairs of a business.
Ledger accounts make use of a two-sided form that corresponds in shape to a letter ‘T’. Ledger
accounts are sometimes referred to as T accounts.

71
 A Ledger Account
Here is a typical ruling for the ledger account. A double entry rule divides the left-hand side (debit
columns) from the right-hand (credit column).

Dr. ACCOUNT NAME Cr.

Date Details Folio Amount Date Details Folio Amount

NOTE: In any account:

➢ the left-hand side is referred to as the debit side, abbreviated as Dr.
➢ The right-hand side is referred to as the credit side, abbreviated as Cr.

Preparation of simple ledgers

The process is as follows:

Step 1
Prepare a “T” account for each asset, each liability and capital shown on the statement of financial
position (balance sheet).

Question
Dale owns a village store. The business’ statement of financial position (balance sheet) on May 1,
2018 is as follow:
Dale
Statement of Financial Position (balance sheet) at 1st May 2018
$ $
ASSETS Capital 40 000
Equipment 37 000
Bank 8 000 LIABILITY
Accounts payable 5 000
45 000 45 000

Step 2: Record the starting figure for each item in appropriate account.

Dr. EQUIPMENT Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 Balance 37,000

Dr. BANK Cr.

Date Details Folio Amount Date Details Folio Amount

72
 May 1 balance 8,000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 balance 40,000

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 balance 5,000

ACTIVITY

Ross owns a music business. His business’ statement of financial position (balance
sheet) at January 1, 2018 is as follows:

Ross
Statement of Financial Position (balance sheet) at 1st January 2018
$ $
ASSETS Capital 100,000
Premises 90,000
Equipment 12,000 LIABILITY
Vehicle 9000 Bank loan 15,000
Bank 3300
Cash 700
115,000 115,000

TASK: Prepare the opening balances in the appropriate accounts.

……………………………………………………………………………………………………

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations
Council Study Guide, Nelson Thornes, 2012

73
 LESSON # 26
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 9: ACCOUNTING AS A SYSTEM

LESSON # 2: Transactions and the double- entry principles ASSETS, LIABILITY and CAPITAL
continues
CONTENT:
NOTE: Remember the rule!!!

Step 3: Record transactions in the “T “accounts.

Each transaction is recorded using the “T” accounts. You already know that whatever the
transaction, two (2) accounts will be affected, so it will be necessary to make two entries.

The purchase of some additional equipment

On May 2, Dale brought some additional equipment for $6000 and paid by cheque.
First, work out which accounts will be affected by the transaction, in this case it is:
➢ Equipment
➢ Bank
Then decide how each of these accounts will be affected:
➢ Equipment + $6000
➢ Bank - $6000
TASK: Now record these changes in the accounts:

Dr. EQUIPMENT Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $
May 1 Balance 37,000
May 2 Bank 6,000

74
Dr. BANK Cr.
Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 1 balance 8,000 May 2 Equipment 6,000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 balance 40,000

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 balance 5,000

DID YOU NOTICE!!!

➢ In the equipment account, an entry has been made on the left hand (positive) side of the
account because there has been an increase in equipment.
➢ In the bank account, an entry has been made on the left hand (negative) side of the account
because there has been a decrease in bank.

Step 4: continue to record transactions.

Transactions are recorded using a similar process, making a series of decisions:

➢ Which two accounts are affected by the transaction?
➢ How is each account affected by the transaction (increase or decrease)?
➢ On which side of each account should an entry be made?
Let’s look at another example:
May 3: Dale pays an accounts payable $1,000, by cheque.
First, work out which accounts will be affected by the transaction, in this case it is:
➢ Bank
➢ Accounts payable
Then decide how each of these accounts will be affected:
➢ Bank - decrease
➢ Accounts payable - decrease
On which side of each account should the entry be made?
➢ Bank: right-hand (decrease) side
➢ Accounts payable: left-hand (decrease) side

75
Here are the updated accounts:
Dr. EQUIPMENT Cr.
Date Details Folio Amount Date Details Folio Amount
2018 $
May 1 Balance 37,000
May 2 Bank 6,000
Dr. BANK Cr.
Date Details Folio Amount Date Details Folio Amoun
t
2018 $ 2018 $
May 1 balance 8,000 May 2 Equipment 6,000
May 3 Account payable 1,000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
May 1 balance 40,000

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 3 Bank 1,000 May 1 balance 5,000

Here is another transaction

May 4 Dale has decided to withdraw a cheque for $200 for his private use (drawings).
First, work out which accounts will be affected by the transaction, in this case it is:
➢ Bank
➢ Capital
Then decide how each of these accounts will be affected:
➢ Bank - decrease
➢ Capital - decrease
On which side of each account should the entry be made?
➢ Bank: right-hand (decrease) side
➢ Capital: left-hand (decrease) side
Here are the updated accounts:
Dr. EQUIPMENT Cr.
Date Details Folio Amount Date Details Folio Amount
2018 $
May 1 Balance 37,000
May 2 Bank 6,000

76
Dr. BANK Cr.
Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 1 balance 8,000 May 2 Equipment 6,000
May 3 Account payable 1,000
May 4 Capital 200

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 4 Bank 200 May 1 balance 40,000

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 3 Bank 1,000 May 1 balance 5,000

ACTIVITY

1. Complete the table below to show how accounts are affected by transactions:

2. John owns a café. His statement of financial position (balance sheet) on June 1, 2018 is
show below:

77
 John
Statement of Financial Position (balance sheet) at 1st June 2018
$ $
ASSETS Capital 29 000
Equipment 27 000
Bank 8 000 LIABILITY
Accounts payable 6 000
35 000 70 000

The following transactions occurred during the following days:

June 2 Purchased some additional equipment for $4 000 and paid by cheque.
June 3 Paid an account payable $2000 by cheque.
June 4 John withdrew a cheque for $700 for private use.

TASK: Prepare the various ledger accounts.

……………………………………………………………………………………………………….
Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019
Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

78
 LESSON # 27

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date: __________________

WEEK # 9: ACCOUNTING AS A SYSTEM

LESSON # 3: Transactions and the double - entry principles – EXPENSES, PURCHASES
and SALES
CONTENT:

Expenses are the everyday running cost of the business.

Some examples of Expenses are:

➢ Wages
➢ Repairs
➢ Salaries
➢ Telephone charges
➢ Electricity
➢ Insurance
HOW ARE EXPENSES RECORDED?

DEBIT -the expense account

On May 31, 2019, the owner of a business paid wages of $210 in cash.

NOTE: The two accounts involved are cash and wages.

Dr. CASH Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 31 Wages 210

Dr. WAGES Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 31 Cash 210

79
RECORDING PURCHASES

The main activity of many businesses is buying goods from suppliers in order to sell them to
customers, at a profit.

When goods for re-sale are purchased by cheque, the entries required will be:
➢ Debit the purchases account
➢ Credit the bank account
If goods for re-sale were purchased on credit, the entries would be:
➢ Debit the purchases account
➢ Credit the account of the credit supplier (accounts payable)
EXAMPLE:
On 4th May a business purchased some goods for re-sale, valued $420 and paid by cheque.
On 5th May the business purchased some goods on credit, valued $1700.

Dr. PURCHASES Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 4 Bank 420
May 5 Accounts payable 1700

Dr. BANK Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 4 Purchases 420

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 5 Purchases 1700

RECORDING SALES

Every time goods are sold, the owner of the business will be pleased, not only because the business
will receive money (or the promise of money), but also because the business will have the chance
of making a profit on the sale.

If goods are sold for cash, the entries required will be:
➢ Debit the cash account
➢ Credit the sales account
If goods are sold on credit, the entries required will be:
➢ Debit the account of the credit customer (account receivable)
➢ Credit the sales account

80
RECORDING THE SALE OF GOODS
On May 8, 2018, a business sold goods for $920 and received payment by cheque. On May 9, 2018,
the business sold some goods on credit for $380.

Dr. SALES Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 8 Bank 920
May 9 Accounts Receivable 380

Dr. BANK Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 8 Sales 920

Dr. ACCOUNTS RECEIVABLE Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
May 9 Sales 380

ACTIVITY

Complete the exercise to record for expenses, sales and purchases.

Jenny opened a shoes-sale business on June 1, 2018. The business’ first statement of financial
position (balance sheet) on that date is as follows:

Jenny
Statement of Financial Position (balance sheet) at
June 1, 2018
$ $
ASSETS Capital 15,100
Bank 14,400
Cash 700
15,100 15,100
The following transactions occurred during June of 2018:

June 2 Purchased goods for re-sale and paid by cheque for $4700
3 Paid one month’s rent by cheque for $740
6 cash sales totaled $490
7 Paid wages of $580, in cash
11 Purchased goods for re-sale on credit, valued at $1470
13 sales on credit totaled $1420
14 Paid wages of $490 in cash
19 paid electricity charges by cheque for $210
21 received cheques totaling $810 for the sale of goods - cheques paid into the bank
81
 24 Purchased goods for re-sale and paid $110 in cash

TASK: Record this information in suitable ledger accounts.

………………………………………………………………………………………………….

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

82
 LESSON # 28

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date: -____________________

WEEK # 10: ACCOUNTING AS A SYSTEM

LESSON # 1: Transactions and the double - entry principles: DRAWINGS ACCOUNT
CONTENT:

DRAWING ACCOUNTS

The owner of a business is likely to take money from the business for private use, this transaction is
referred to as DRAWINGS.
So, the entries for recording drawings:
➢ Debit the drawing account
➢ Credit the bank or cash account.

RECORD DRAWINGS

The owner of a business has invested capital of $80,000. The owner withdrew a cheque for $200
for private use on August 1, 2019 and $80 cash for private use on August 3, 2019.
Dr. CAPITAL Cr.
Date Details Folio Amount Date Details Folio Amount
2019 $ 2019 $
Aug 1 balance 80,000

Dr. BANK Cr.

Date Details Folio Amount Date Details Folio Amount
2019 $ 2019 $
Aug 1 Drawings 200

Dr. CASH Cr.

Date Details Folio Amount Date Details Folio Amount
2019 $ 2019 $
Aug 3 Drawings 80

Dr. DRAWINGS Cr.

Date Details Folio Amount Date Details Folio Amount
2019 $ 2019 $
Aug 1 Bank 200
Aug 3 cash 80

83
 ACTIVITY

TASK: Prepare the ledgers recording for sales, purchases, expenses and drawings
account.

Fanella owns a grocery store. The business’ opening statement of financial position (balance sheet)
on October 1, 2017 is as follows:

Fanella Grocery Store

Statement of Financial Position (balance sheet) at October 1, 2017
$ $
ASSETS Capital 17,100
Fittings 8600
Bank 7800
Cash 700
17,100 17,100

The following transactions occurred during October 2017:

Oct 4 Purchased goods for re-sale and paid $500 in cash.

6 Purchased goods for re-sale on credit, valued $4240.
7 Cash sales totalled $990.
11 Paid rent for the month by cheque for $770.
12 Fanella withdrew $110 cash for private use.
15 Sales on credit totalled $440.
18 Sold some unwanted fittings with a value of $300 and received cash for this
amount.
22 Paid an account payable $3000, by cheque.
25 Received cash $210 from the receivable.
29 Fanella withdrew a cheque for $390 for private use.

Record this information in suitable ledger accounts, including a seprate account for drawings.

……………………………………………………………………………………………………….

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

84
 LESSON # 29

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 10: ACCOUNTING AS A SYSTEM

LESSON # 2: Balancing off Accounts
CONTENT:
Balancing Off Accounts

Steps to be observed when balancing off accounts:

Step 1: Add the debit and credit sides of the account separately.

Step 2: Subtract the smaller side from the bigger side and enter the difference on the smaller
side of the account on the last day of the month.

Step 3: Equalize both sides of the account.

Step 4: Show the opening balance on the first day of the new month in the account.

Now let us work the exercise given in the below.

TASK: You are to enter up the necessary accounts in the respective ledgers of Naomi Khan for the
month of May, 2020 from the following transactions, and balance off the accounts.

2020
05 – 01: Naomi Khan started business with $2500 in the bank.

05 – 03: Bought goods on credit from: D. Ellis $540; C. Mendez $87; K. Gibson $76.

05 – 06: Sold goods on credit to: C. Bailey $430; B. Hughes $62; H. Spencer $176.

05 – 08: Sold goods for cash $500.

05 – 11: Paid rent by cash $120.

05 – 13: C. Bailey paid us $250 by cheque on account.

05 – 16: H. Spencer paid us $150 by cash.

05 – 19: We paid the following by cheque: K. Gibson $76; D. Ellis $370 on account.
85
05 – 21: Bought stationery for cash $60.

05 – 23: Bought goods on credit from: D. Ellis $145; C. Mendez $234.

05 – 26: Paid rent by cheque $120.

05 – 28: Sold goods on credit to: C. Bailey $90; B. Hughes $110; H. Spencer $128.

05 – 30: Paid C. Mendez by cash $87.

NAIOMI KHAN
General Ledger Purchases Ledger Sales Ledger
Accounts to be opened are: Accounts to be opened are: Accounts to be opened are:
1. Capital 1. D. Ellis 1. C. Bailey
2. Bank 2. C. Mendez 2. B. Hughes
3. Purchases 3. K. Gibson 3. H. Spencer
4. Sales
5. Cash
6. Rent
7. Stationery

NAIOMI KHAN
GENERAL LEDGER
Dr. CAPITAL A/C Cr.
Date Details Folio Amount Date Details Folio Amount
2020 $ 2020 $
05-31 Balance c/d 2500 05-01 Bank 2500
2500 2500
06-01 Balance b/d 2500

Dr. BANK A/C Cr.

Date Details Folio Amount Date Details Folio Amount
2020 $ 2020 $
05-01 Capital 2500 05-19 K. Gibson 76
05-13 C. Bailey 250 05-19 D. Ellis 370
05-26 Rent 120
05-31 Balance c/d 2184
2750
06-01 Balance b/d 2184 2750

86
 Dr. PURCHASES A/C Cr.
Date Details Folio Amount Date Details Folio Amount
2020 $ 2020 $
05–03 D. Ellis 540 05-31 Balance 1082
05-03 C. Mendez 87
05-03 K. Gibson 76
05-23 D. Ellis 145
05-23 C. Mendez 234
1082 1082

06-01 Balance 1082

The first THREE (3) accounts have been

completed and balanced for you.
Read the steps.
Then observe the balances in the account.

ACTIVITY

1. You are required to complete the remainder of the ledger accounts for Naomi Khan.

2. Balance off each account.

………………………………………………………………………………………………………..
Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

87
 LESSON # 30

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 10: ACCOUNTING AS A SYSTEM

LESSON # 3: Trial Balance
CONTENT:
Definition of Trial Balance
Trial Balance is a list of account titles and their balances in the debit and credit columns at a specific
date.

Uses of Trial Balance:

➢ To check that the book is ‘balanced’, that is, that every debit entry has been accompanied by
a corresponding credit entry.
➢ To ascertain the net number of error (s), had an error (s) been made.
➢ As a basis for which the financial statements are prepared, that is, trading account, profit and
loss account (income statement) and the statement of financial position (balance sheet).

Preparation of Trial Balance:

The trial balance is based on the principles that for every transaction there should be a matching
debit and credit entry, so that the total of all debit entries is equal to the total of all credit entries.

To produce a trial balance, the following steps are necessary:

1. List all the accounts in the accounting system.
2. For each account, record its balance in either the debit column or credit column of the trial
balance, according to the side on which the balance appears in the account.
3. Total the debit and credit column of the trial balance - the totals should agree.
4. The correct heading for the trial balance is always Trial Balance as at… (that is at a particular
date).

88
For example:

Dr. BANK Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 1 Balance 13,000 Jan 4 Accounts Payable 2000
Jan 10 Sales 4000
Jan 31 Balance c/d 15,000
17,000 17,000
Feb 1 Balance b/d 15,000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 31 Balance c/d 11,000 Jan 1 Balance 11,000

Feb 1 Balance b/d 11,000

Dr. ACCOUNTS PAYABLE Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 4 Bank 2000 Jan 1 Balance 2000
Jan 31 Balance c/d 3000 Jan 7 Purchases 3000

5000 5000
Feb 1 Balance 3000

Dr. PURCHASES Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 7 Accounts Payable 3000 Jan 31 Balance c/d 3000

Feb 1 Balance b/d 3000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 31 Balance c/d 4000 Jan 7 Bank 4000

Feb 1 Balance b/d 4000

89
 NOTE: All of the accounts ABOVE are balanced off. Next, look to see which side the balance
(brought down) b/d is on for the new month (Feb 1) – either the credit or the debit side. Then take
the balance and put it on the same side (either debit or credit side) in the trial balance.

Trial Balance as at 31st January 2018

Dr. Cr.
$ $
Bank 15,000
Capital 11,000
Accounts payable 3000
Purchases 3000
Sales 4000

18,000 18,000

ACTIVITY

On December 31, 2020, the owner of a business extracted the following list of
balances from the accounting system:

Accounts payable 400

Accounts receivable 900
Advertising 800
Bank Loan 7000
Capital 10,500
Cash at bank 1200
Drawing 2300
General expenses 700
Purchases 6100
Sales 8800
Vehicle 14,900

TASK: Prepare the trial balance dated December 31, 2020

……………………………………………………………………………………………………

Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

90
 LESSON # 31

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 11: ACCOUNTING AS A SYSTEM

LESSON # 1: Trial Balance cont’d
CONTENT:
The table shows how various types of accounts should appear in a trial balance.
Trial Balance
Debit column Credit column
Assets Capital
Expenses Liabilities
Purchases Sales
Drawings

What would happen if there were errors in the double entry records?
The totals of a trial balance will only agree if a double entry has been recorded for each transaction.

Finding errors in the double entry records:

All the transactions are correctly recorded except the receipt from the accounts payable on Jan 4.
This transaction has two credit entries, one in the bank account and the other in accounts payable.

For example:
Dr BANK Cr
Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 1 Balance 13,000 Jan 4 Accounts Payable 2000
Jan 10 Sales 4000
Jan 31 Balance c/d 15,000
17,000 17,000
Feb 1 Balance b/d 15,000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 31 Balance c/d 11,000 Jan 1 Balance 11,000

Feb 1 Balance b/d 11,000

91
Dr. ACCOUNTS PAYABLE Cr.
Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 31 Balance c/d 7000 Jan 1 Balance 2000
Jan 4 Bank 2000
Jan 7 Purchases 3000

7000 7000
Feb 1 Balance b/d 7000

Dr. PURCHASES Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 7 Accounts Payable 3000 Jan 31 Balance c/d 3000

Feb 1 Balance b/d 3000

Dr. CAPITAL Cr.

Date Details Folio Amount Date Details Folio Amount
2018 $ 2018 $
Jan 31 Balance c/d 4000 Jan 7 Bank 4000

Feb 1 Balance b/d 4000

Trial Balance as at 31st January 2018

Dr. Cr.
$ $
Bank 15,000
Capital 11,000
Accounts payable 7000
Purchases 3000
Sales 4000

18,000 22,000

NOTE: the trial balance DID NOT BALANCE because there is an error in the double entry.

Can you tell what that error was?

Ans.: Accounts payable was incorrectly placed.

92
 ACTIVITY

1. Look at the ledger accounts above; find the error and correct the trial balance.
2. What are the benefits of preparing the trial balance?
3. How do you know in which column to record the balance of an account when preparing a trial
balance?
4. You are to enter up the necessary accounts in the respective ledgers of T. Singh for the month
of June 2019 from the following transactions. Balance off the accounts and prepare the trial
balance.
2019

06 – 01: T. Singh started business with $2500 in the bank.

06 – 03: Bought goods on credit from: D. John $540; C. Roger $87; K. Mark $76.

06 – 06: Sold goods on credit to: C. Bailey $430; B. Hughes $62; H. Spencer $176.

06 – 08: Sold goods for cash $500.

06 – 11: Paid rent by cash $120.

06 – 13: C. Bailey paid us $250 by cheque on account.

06 – 16: H. Spencer paid us $150 by cash.

06 – 19: We paid the following by cheque: K. Mark $76; D. John $370 on account.

06 – 21: Bought office supplies for cash $60.

06 – 23: Bought goods on credit from: D. John$145; C. Roger $234.

06 – 26: Paid wages by cheque $120.

06– 28: Sold goods on credit to: C. Bailey $90; B. Hughes $110; H. Spencer $128.

06 – 30: Paid C. Roger by cash $87.

………………………………………………………………………………………………………..
Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012
93
 LESSON # 32

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 11: BOOKS OF ORIGINAL ENTRY

LESSON # 2: Purchases book, Purchases Ledgers and General Ledgers
CONTENT:
Books of original entry- are books of first entry where transactions are listed prior to being
posted to the double-entry records. These are also called books of prime entry.

Table showing the lists of books of original entry, explanation and other names for the books

Books of original entry Transactions recorded Alternative names

Purchases book Purchases on credit of goods for Purchases day book or
re-sale purchases journal
Sales book Sales on credit of goods Sales day book or sales journal
Returns outwards book Returns of goods previously Purchase returns day book or
purchased on credit purchases return journal
Return inwards book Returns of goods previously sold Sales return day book or sales
on credit returns journal
Cash book Receipts and payment affecting
cash-in-hand and cash-at-bank.
Petty cash book Cash payments of small value.
General journal Transactions that cannot be
recorded in the other books of
original entry.

94
 Source documents relating to books of original entry
Source documents need to be stored carefully, as they provide evidence that a transaction has
occurred. When a source document is received or issued, key information is extracted from the
document and recorded in one of the books of original entry.
Book of original entry Source Documents
Purchases book ➢ Invoice received from supplier
Sales book ➢ Invoice issued to a customer
Returns outwards book ➢ Credit note received from a supplier
Return inwards book ➢ Credit note issued to a customer
Cash book ➢ Cash register tapes or till roll
➢ Cash receipts
➢ Pay-in slip counterfoils
➢ Bank statements
Petty cash book ➢ Petty cash voucher
General journal ➢ Range of documents including: invoice for the
purchase of non-current assets, notes and emails.

RECORDING CREDIT PURCHASES

As purchases invoices are received, the following important information is recorded first in what is
called a purchases book:
➢ Date
➢ Name of supplier
➢ Invoice number
➢ Amount due

95
 Source Document used for Credit Purchases
EXAMPLE OF AN INVOICE:

Source template from: https://legaltemplates.net/form/invoice-template/

96
Example - Recording purchases invoices in a purchases book:

Elizabeth owns a hardware store. During April, 2018, she received the following purchases invoices
from her suppliers for goods for re-sale:

April 7 Invoice 2845 Purchase invoice received from Bell Ltd for goods $785
April 11 Invoice 3901 Purchase invoice received from R. Khan for goods $1450
April 22 Invoice 0783 Purchase invoice received from Aldo Ltd for goods $2440
April 29 Invoice 0442 Purchase invoice received from L. Samson for goods $635

The following entries are recorded in the purchases book:

Posting credit purchases of goods for resale

The correct double entry for the purchase of goods for re-sale on credit is:
➢ Debit the purchases account
➢ Credit the accounts payable
NOTE: Each accounts payable will have its own account.

These accounts of payables are normally maintained in a separate ledger called the purchases
ledger.

The purchases account (along with all the other accounts, except receivables and payables accounts)
will be found in what is called the general ledger.

NOTE: Here are the double entry records for these purchases on credit:

97
ACTIVITY

Becky owns a shoe shop. During May 2018, she received the following
purchase invoices:

May 3 Invoice 2730 Purchase invoice received from Whiteford Ltd for goods $1230
May 11 Invoice 9702 Purchase invoice received from P. Sackley for goods $2720
May 24 Invoice 1818 Purchase invoice received from A. Hereton for goods $990
May 27 Invoice 2823 Purchase invoice received from Whiteford Ltd for goods $2440

TASK: Prepare the accounting records necessary to record these transactions:

1. Purchase book
2. Payable accounts in the purchases ledger
3. Purchases account in the general ledger
4. Invent suitable folio references

98
………………………………………………………………………………………………………..

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations
Council Study Guide, Nelson Thornes, 2012

99
 LESSON # 33

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK #11: BOOKS OF ORIGINAL ENTRY

LESSON # 3: Sales book, sales ledgers, source document and general ledger
CONTENT:
A sales invoice is issued to customers for goods sold on credit. This can be used to make entries in
the sales book, sales ledger and general ledger. An accounts receivable will be opened in the sales
ledger and a debit entry made to record the amount the customer owes.
The double entry for credit sales’ recordings
are:
➢ Debit the account receivable
➢ Credit the sales account

100
Jamie owns a furniture store. During March 2018, he issued the following invoices to credit
customers:

March 3 Invoice 377 Sales invoice sent to Batfo Ltd for $1080
March 14 Invoice 378 Sales invoice sent to H Denman for $740
March 18 Invoice 379 Sales invoice sent to Jakex Ltd for $ 2320
March 22 Invoice 380 Sales invoice sent to Quilton Ltd for $ 1440

NOTE: As these invoices are issued, the following records should be made in the sales book:

Recordings in the sales ledger and general ledger:

101
102
ACTIVITY

Amy owns a shop selling the latest music technology. During August 2018, she issued the following
sales invoices to customers:

August 5 Invoice T339 Sales invoice sent to Bartford Ltd for $1480
August 10 Invoice T340 Sales invoice sent to J Williams for $ 920
August 23 Invoice T341 Sales invoice sent to Bartford Ltd for $ 2840
August 28 Invoice T342 Sales invoice sent to J Williams for $ 1550

TASK: Prepare the accounting records necessary to record these transactions:

1. Sales book
2. Receivables account in the sales ledger
3. Sales account in the general ledger
4. Invent suitable folio references

Trade Discount
A trade discount is the reduction in the prices to be charged for goods. The following conditions
normally apply to this form of discount:
➢ Trade discount is only offered to other businesses engaged in the same line of activity.
➢ Trade discounts are given for large orders.

EXAMPLE OF TRADE DISCOUNT:

GCK Wholesalers sells refrigerators. Its price list shows that the normal selling price of Model 2TB
is $320.

GCK Wholesalers has just received two orders:

➢ A private individual wishes to purchase on Model 2TB refrigerator.
➢ J Hudson, a retailer of electrical goods, wishes to purchase ten (10) Model 2TB refrigerators.

The private individual will be charged the normal selling price of $320.
But J Hudson, retailer in the same line of business, could be offered a trade discount for placing a
large order. Trade discounts are usually expressed as percentages and can be large in amounts. So,
if the retailer, J Hudson, was allowed a trade discount of say 25%, the amount charged for the order
would be calculated as follows:

103
 $
10 Model 2TB refrigerators (normal price: $320 each) 3200
Less 25% trade discount 800
Amount charged 2400

In effect, the retailer pays only $240 for each refrigerator, while the private individual is charged the
full price of $320.

ACTIVITY

Work the question below:

104
…………………………………………………………………………………………………
Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

105
 LESSON # 34
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 12: BOOKS OF ORIGINAL ENTRY

LESSON # 1: The Purchases returns book, source document, purchase return ledger and general
ledger
CONTENT:
Purchases Returns
Sometimes, the business may have to return goods that have been purchased on credit, to suppliers.
This can happen when some items are:
➢ Damaged or broken
➢ Not as ordered (wrong model, wrong size or colour)
➢ Received too late (sell-by date exceeded)

The return of goods to a supplier is often referred to as Purchases returns as the goods are going
out of the business and back to the supplier.
The double entry records for purchases returns are:
➢ Debit the account of the supplier (accounts payable)
➢ Credit a purchases returns account.

EXAMPLE OF THE LEDGERS AND GENERAL LEDGER FOR PURCHASE RETURNS:

106
The source document used for purchase return is the CREDIT NOTE.

Purchase returns book

The book of original entry used to list all credit notes received from suppliers before posting the
information to the ledgers is called Purchases returns book.

EXAMPLE:
Purchases returns book

Here are the double entry records for return outwards:

107
 ACTIVITY

Stacy owns a shop supplying fishing tackle. During March 2018, she returned goods to suppliers
that had previously been purchased on credit and received the following credit notes:

March 11 Credit note 242 Goods returned to Scott Ltd with a value of $275
March 18 Credit note 375 Goods returned to Taylor and Sons with a value of $328
March 29 Credit note 247 Goods returned to Scott Ltd. These goods had been
invoiced at $550 less a trade discount of 20%

Prepare the records required in Stacy’s books of accounts to record these transactions:
1. Purchases returns book
2. Accounts payable in the purchases ledger
3. Purchases returns account in the general ledger
4. Invent suitable folio references

………………………………………………………………………………………………………..
Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

108
 LESSON # 35
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 12: BOOKS OF ORIGINAL ENTRY

LESSON # 2: The Sales returns book, source document, sales returns ledger and general ledger
CONTENT:
Sales returns is when credit-customers return goods to the business.
The basic double entry record for returns inwards is:
➢ Debit a sales returns account
➢ Credit the account of the customer (account receivable)
Sales return book

NOTE: Here are the double entry records for sales returns.

109
 ACTIVITY

TASK: WORK THIS QUESTION

…………………………………………………………………………………………………….

Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012
110
 LESSON # 36
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 12: BOOKS OF ORIGINAL ENTRY

LESSON # 3: REVIEW: Sales journal, Purchases journals, purchases returns and sales returns
CONTENT:
In the activity below, we are recapping sales book, purchases book, purchases return books and sales
returns books.

TASK: Work this question

1. Write up the journals for June 2019 from the following credit transactions

2019
June 1: Sold goods to K. King, $196
June 6: Sold goods to R. Jones for $ 700 less 30% trade discount
June 11: Bought goods from E. T Ltd for $ 1,800, less 20% trade discount
June 16: K. King returned $21 of goods sold to him on June 1
June 20: Sent an invoice to N. English for $500 goods, less 20% trade discount
June 24: We returned $200 of goods, less 20% discount to E. T Ltd
June 30: Bought goods for $400 from A. Richards

You are required to:

1. Write the sales, purchases, purchases return and sales returns journals
2. Post the transactions to the sales and purchases ledgers and to general ledgers.

…………………………………………………………………………………………………..
Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support. Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

111
 LESSON # 37

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 13: BOOKS OF ORIGINAL ENTRY

LESSON # 1: The Cash Book, source documents
CONTENT:
The book of original entry used to record all money transactions is called Cash Book.
There are different forms of cash books. However, the two main ones are:
➢ Two column Cash book
➢ Three column Cash book
Source document used for money transactions
The following tables summarize some main means of receiving and paying money:

112
ACTIVITY
1. What is the Cash Book used for?
_________________________________________________________________
2. List the TWO (2) main types of cash book.
_________________________________________________________________
_________________________________________________________________
3. Identify THREE (3) types of source documents used to prepare the cash book.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

4. Choose TWO (2) of the sources of documents from today’s lesson and paste pictures of them
here.

113
 …………………………………………………………………………………………………………………………………………………………

Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

LESSON # 38

114
 PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 13: BOOKS OF ORIGINAL ENTRY

LESSON # 2: Two Column Cash Book
CONTENT:
TWO COLUMN CASH BOOK
On September 1, 2018, a business had cash-in-hand of $ 740 and cash-at-bank of $7280.
The following source documents are available:

Solution: TWO COLUMN CASH BOOK

NOTE:

115
116
 ACTIVITY

On August 1, 2018, Owen’s business had cash-in-hand of $370 and a balance at the bank of $4120.
The following source documents are available for money transactions during August 2018:

TASK: Prepare the business’ two column cash book for August 2018. Balance the cash book on
August 31, 2018. Enter appropriate folio references in the cash book, as if entries had been posted.
NOTE: Ledger accounts are NOT required.

………………………………………………………………………………………………………..
Reference

Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

117
 LESSON # 39
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 13: BOOKS OF ORIGINAL ENTRY

LESSON # 3: The Three Column Cash Book
CONTENT:
Cash Discounts
It is better if customers pay their accounts quickly. A firm may accept a smaller sum in full settlement
if payment is made within a certain time period.

The amount of the reduction of the sum to be paid is known as cash discount. Cash Discounts refer
to the allowance given for quick payment by cash or cheque.

The Three column cash book takes the same format like the two-column. However, there is an
additional discount account on both sides: discount allowed and discount received.

The two types of discounts:

➢ It may allow cash discounts to its customers when they pay quickly: we call this type
Discount allowed.

➢ It may receive discounts from its suppliers when it pays them quickly: we call this type
Discount received.
Format of the three-column cash book:

Date Details Folio Discount Cash Bank Date Details Folio Discount Cash Bank
Allowed Received

118
ACTIVITY

The following balances were extracted from the books of Apex Universal, a
wholesaler, on November 1, 2018.

Cash in hand 2190

Cash at bank 7330
Accounts payable:
TM Davis 1600
Ryan & Co 2300
Accounts receivable:
Fray Ltd 900
VK Watson 1650

Accounts payable gives a cash discount of 5%, if discounts are settled within 30 days.
Apex Universal gives a cash discount of 2% to its credit-customers who settle their accounts within
30 days.

During November 2018, the following transactions occurred:

119
 TASK:
1. Prepare the business’ three-column cash book for November 2018. Balance the cash book
on November 30, 2018 and total the discount columns on this date.
2. Post the totals of the discount columns to the discount account in the general ledger.
3. Enter folio references in the cash book and ledger accounts.

NOTE
Discounts received are credited in the
general ledger, and discounts allowed are
recorded on the debit side.

………..………………………………………………………………………………………………

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

120
 LESSON # 40

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 14: BOOKS OF ORIGINAL ENTRY

LESSON # 1: The three-column cash book-bank overdrawn
CONTENT:
When happens when a bank becomes overdrawn?

When a business spends more than it has paid into its bank account, then the balance becomes
overdrawn. Businesses usually arrange an overdraft facility (in other words, a formal agreement
with the bank) to cover this possibility. Banks charge interest on overdrawn balances and also set
limits on the amount by which the business can become overdrawn.

From a bookkeeping point of view, no special action is required when a payment causes the bank
account to be overdrawn. When the bank account is balanced however you will find that the balance
brought down is shown as a credit balance (indicating that it is a current liability) rather than a debit
balance.

A BANK ACCOUNT THAT IS OVERDRAWN

Here is the bank account of a business which becomes overdrawn during a particular month. For
convenience, just the bank columns from the cash book are shown here:

121
 ACTIVITY

TASK: Prepare the three-column cash book with an overdrawn bank balance.
Deva owns a beachwear business. On May 1, 2018, her business’ cash-in-hand was $1270 and cash-
at-bank was $1480. During May, the following transactions occurred:

You are required to:

Prepare the business’ three-column cash book for May, 2018. Balance the cash book on May 31,
2018 and total the discount columns. Enter appropriate folio references in the cash book, as if entries
had been posted.
NOTE: Ledger accounts are NOT required.

………..………………………………………………………………………………………………
Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

122
 LESSON # 41
PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 14: BOOKS OF ORIGINAL ENTRY

LESSON # 2: Petty Cash Book
CONTENT:
PETTY CASH

Pretty Cash is used for small cash payments.

PETTY CASH BOOK

This is a book of original entry used for recording small cash payments, with information taken from
petty cash vouchers. The petty cashier often has a (float called an imprest) to use for these payments.
IMPREST
A system used for maintaining a petty cash book, that gives the petty cashier responsibility for a
petty cash float.
PETTY CASH VOUCHER
This is the source document for each petty cash payment.

EXAMPLE OF PETTY CASH VOUCHER

123
Preparation of the petty cash book
The steps to be followed in completing a petty cash book:

Step 1: Receiving the float, the petty cashier receives the float/imprest in the form of cash or perhaps
a cheque that needs to be cashed. The double entry record require is:
➢ Debit the petty cash account
➢ Credit the cash or bank column in the main cash book

Step 2: Recording a petty cash payment. The petty cashier makes the following record in the petty
cash book:
➢ Credit the petty cash account
➢ Make a second entry in the appropriate

ANALYSIS COLUMN

Step 3: Balancing the petty cash book - The petty cash account is balanced in the usual way and the
balance is brought down (b/d) to start the next period. The petty cashier is then reimbursed for the
last period’s payment and debits the petty cash account with the amount received. By receiving back
exactly what was spent in the previous period, the float/imprest is restored.

Step 4: Totaling and posting the analysis columns to the relevant ledger accounts.

ACTIVITY

1. What is the name of the person who prepares the petty cash book?
_________________________________________________________________
_________________________________________________________________
2. Identify the source document used to prepare the petty cash book.
_________________________________________________________________
_________________________________________________________________

124
 3. List FOUR (4) items that you can find on a petty cash voucher.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Explain the concept of the ‘imprest system’.

_________________________________________________________________

_________________________________________________________________

………..………………………………………………………………………………………………
Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

Austen, D. and Ellis, D. et al., Principles of Accounts for CSEC, A Caribbean Examinations Council
Study Guide, Nelson Thornes, 2012

125
 LESSON # 43

PRINCIPLES OF ACCOUNTS
WORKSHEET
GRADE 10

Name of Student: ________________________________ Date:

WEEK # 14: ACCOUNTING AS A SYSTEM

LESSON # 3: Preparing the Petty Cash Book
CONTENT:
EXAMPLE OF THE PETTY CASH BOOK
The owner of a business decided to maintain a petty cash book with an imprest of $150. The
following transactions occurred:

HERE IS THE SOLUTION:

126
ACTIVITY

Prepare the petty cash book and posting to ledgers accounts.

Jenny has decided that her business should make use of a petty cash book and that the imprest should
be $200. She has also decided that the petty cash book should have the following analysis columns:
➢ Postage
➢ Stationery
➢ Travel
➢ Cleaning
➢ General expenses
➢ Purchase ledger accounts
127
During the first month of operation, October 2018, the following petty cash transactions occurred.

You are required to:

1. Prepare the petty cash book for October 2018.
2. Post the details of the analysis column to the account in the general and purchases ledgers.
3. Restore the imprest on November 1.

………..……………………………………………………………………………………………

Reference
Austen, D. and Louisy, E. et al, Principles of Accounts for CSEC, Second edition with online
support, Oxford University Press, 2019

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