Double Entry System Questions

01. Write whether the increase and decrease of each of the following accounts should be written in
the debit side or credit side of the account
Account name Increase Decrease
1. Land & building Account
2. Machinery Account
3. Sales Account
4. Purchase Account
5. Drawings Account
6. Equity Account
7. Bank Loan Account
8. Debtors Account
9. Creditors Account
10. Rent Income Account

02. Samagi Traders has provided following information for the month of January 2020.
Transaction No. Transaction
01. Samagi invested Rs. 50 000 as capital.
02. Business purchased Rs. 10 000 worth goods.
03. Business obtained a bank loan of Rs. 200 000.
04. Payment of electricity bill Rs. 5 000.
05. Business sold goods worth Rs. 10 000 to Anura.
06. Rent income received Rs. 15 000.
07. Cash received from Anura Rs. 5 000.
08. Cash payment to creditors Rs. 10 000.
09. Bought Rs. 100 000 worth computer for the business.
10. Repayment of bank loan Rs. 5 000.

Required,

1) Write the effects of above transactions using the following format.

Transaction No. Effect Double Entry

03. Following are the transactions that occurred in a business during the month of May 2020.
01. Owner introduced Rs. 50 000 to the business.
02. Cash sales Rs. 10 000.
03. Business obtained a bank loan Rs. 100 000.
04. Purchased goods worth Rs. 15 000 from Samadhi.
05. Rent income received Rs. 25 000.
06. Business purchased Rs. 12 000 worth furniture on cash basis.
07. Owner withdrew Rs. 2 000 for personal use.
08. Repayment of bank loan Rs. 2 000.

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Double Entry System Questions

09. Paid monthly salary of Rs. 10 000.

10. Invested Rs. 10 000 in a fixed deposit.

Required,

Write the effects of above transactions using the following format.

Transaction No. Effect Double Entry

04. Following are some transactions occurred in Aruna's business.

01. Owner introduced Rs. 250 000
02. Business purchased Rs. 10 000 worth furniture for business use.
03. Cash purchase Rs. 10 000.
04. Cash sales Rs. 25 000
05. Paid electricity bill Rs. 3 000.
06. Purchases goods worth Rs. 17 000 from Kasun.
07. Sold goods worth Rs. 20 000 to Wasana.
08. Purchase returns from Kasun Rs. 2 000.
09. Owner withdrew Rs. 3 000 worth goods for his personal use.
10. Sales returns by Wasana Rs. 2 000.
11. Business obtained a bank loan Rs. 100 000.
12. Bad debts written off Rs. 5000

Required,

Write the effects of above transactions using the following format.

Transaction No. Effect Double Entry

05. Following are some transactions occurred in Harshani’s business during the month of May 2020.

1/5 - Owner introduced Rs. 500 000 to the business.

2/5 - Business purchased Rs. 10 000 worth goods.

5/5 - Salaries paid Rs. 20 000

12/5 - Rent income received Rs. 30 000

18/5 - Goods returned to creditors Rs. 5 000

21/5 - Sold goods worth Rs. 15 000 to Namal.

24/5 - Owner withdrew Rs. 10 000 worth goods for his personal use.

25/5 - Cash received from Namal Rs. 10 000.

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Double Entry System Questions

31/5 - Cash paid to creditors Rs. 20 000

Required,

1) Write the effects of above transactions using the following format.

Transaction Date Effect Double Entry

2) Record the above transactions in ledger accounts.

06. Madu has provided following transactions for the month of July 2020.
1/7 - Owner introduced Rs. 15 000 to the business
5/7 - Business obtained a bank loan of Rs. 200 000
9/7 - Purchased goods worth Rs. 20 000 from Sanjula
12/7 - Sold goods worth Rs. 10 000 to Dammika
15/7 - Cash paid to Sanjula Rs. 10 000
19/7 - Cash received from Dammika Rs. 7 000
20/7 - Electricity bill paid Rs. 4 000
22/7 - Rent income received Rs. 40 000
24/7 - Owner withdrew Rs. 2 000 for personal use.
30/7 - Repayment of bank loan Rs. 5 000
Required,
Record the above transactions in the ledger accounts

07. Malathi has provided following transactions for the month of August 2020.
1/8 - Cash introduced by the owner Rs. 200 000
2/8 - Business purchased Rs. 10 000 worth goods
8/8 - Sold goods worth Rs. 5 000 to Kasun
12/8 - Business purchased goods worth Rs. 12 000 from Sudeera
17/8 - Paid monthly salary Rs. 10 000
21/8 - Bad debts written off Rs. 3 000
24/8 - Goods returned by Kasun Rs. 1 000
28/8 - Owner withdrew Rs. 7 000 worth goods for his personal use
29/8 - Business purchased Rs. 25 000 worth furniture from Samadhi paying Rs. 10 000 by cash
30/8 - Commission income received Rs. 20 000

Required,
Record the above transactions in the ledger accounts

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Double Entry System Questions

08. The following cash control account has been prepared by the accounts clerk of Minduli's
business by including transactions that has occurred during the month of May 2020.

DR Cash Control Account CR

Date Description L.F Value (Rs) Date Description L.F Value

1/5 Capital account 200 000 1/5 Purchase account 45 000
2/5 Sales account 500 000 9/5 Salary account 20 000
10/5 Bank loan account 200 000 18/5 Electricity account 5 000
19/5 Debtors account 20 000 20/5 Bank loan interest 10 000
31/5 Capital account 55 000 25/5 Creditors account 5 000
31/5 Furniture account 10 000

Required,

1) Describe the transactions for each entry listed in the cash control account in chronological order.

2) Draw the other ledger accounts relevant to the transactions listed in the above cash control
account of Minduli's business

09. Sumudu has provided following information for the month of January 2020.
1/1 - Cash sales Rs. 10 000
5/1 - Sales to Sameera Rs. 25 000
16/1 - Cash sales Rs. 20 000
28/1 - Sales to Nadun Rs. 7 000
Required, Post the above transactions to the ledger accounts and balance them off.

10. Tharindu has provided following information for the month of March.
1/3 -Tharindu invested Rs. 200 000 and commenced the business
3/3 - Obtained a bank loan Rs. 100 000
5/3 - Rent paid Rs. 24 000
9/3 - Purchased goods worth Rs. 20 000 from Sameera
10/3 -Sold goods worth Rs. 10 000 to Perera
15/3 - Interest income received Rs. 25 000
20/3 - Repayment of bank loan Rs. 7 000
25/3 - Cash received from Perera Rs. 5 000
26/3 - Cash paid to Sameera Rs. 10 000
29/3 - The owner withdrew Rs. 5 000 for his personal use
31/3 - Purchased Rs. 10 000 worth furniture from Samagi, paying Rs. 8 000 by cash
Required: 1. Post the transactions to the ledger accounts
2. Balance the ledger accounts

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Double Entry System Questions

11. Samadhi has provided following transactions for the month of August 2020.
1/8 - Samadhi invested Rs. 100 000 and commenced the business Business.
4/8 -Obtained a bank loan Rs. 200 000
6/8 - Rent income received Rs. 60 000
12/8 - Sold Rs. 10 000 worth goods to Sakuni
15/8 - Purchased goods worth Rs. 30 000 from Varuni
16/8 - Sakuni returned goods woth Rs. 2 000 to the business
20/8 - Electricity expense paid Rs. 7 000
22/8 - Cash paid to Varuni Rs. 10 000
25/8 -The owner withdrew Rs. 5 000 worth goods for personal use
30/8 - Repayment of bank loan Rs. 5 000
Required,
1) Post the transactions to the ledger accounts
2) Balance the ledger accounts

12. Maduri has provided following information for the month of January 2020.
Balances as at 01/01/2020 (Rs.)
Land and Building 200 000
Creditors 50 000
Debtors 30 000
Bank loan 100 000
Capital ?
Cash 70 000
1/1 - Purchased goods worth Rs. 20 000 on credit
3/1 - Repayment of bank loan Rs. 5 000
8/1 - Cash received from debtors Rs. 10 000
9/1 - Cash payment to creditors Rs. 12 000
14/1 - Salary paid Rs. 10 000
18/1 - Owner withdrew goods worth Rs. 5 000 for his personal use.
19/1 - Rent income received Rs. 50 000
21/1 - Business purchased Rs. 12 000 worth furniture from Sapumal
27/1 - Advertising expense paid Rs. 7 000
Required:
Post the transactions to the ledger accounts & balance the ledger accounts.

13. Nehara has a business. She has provided following balances as at 01/05/2020.
Balances as at 01/05/2020 (Rs.)
Cash 130 000
Debtors 40 000
Creditors 25 000
Capital ?
The following transactions took place during the month of May 2020.
1/5 – Nehara invested Rs. 50 000 as additional capital.

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Double Entry System Questions

4/5 – Cash paid to creditors Rs. 10 000

5/5 – Cash received from debtors Rs. 12 000
9/5 – Purchased goods worth Rs. 9 000 from Vayala
15/5 – Sold goods worth Rs. 15 000 to Jayashan
19/5 – Business obtained a bank loan Rs. 200 000
21/5 – Owner withdrew Rs. 5 000 worth goods for personal use.
23/5 – Salary paid Rs. 20 000
25/5 – Business returned Rs. 2 000 worth goods to Vayala
29/5 – Business deposited Rs. 40 000 in a fixed deposit.
Required,
Post the transactions to the ledger accounts and balance them off.

14. Write whether the increase or decrease of each of the following accounts should be written in
the debit side or credit side of the account.
1. Increase of equity …………………………………..
2. Increase of expenses ………………………………….
3. Decrease of income …………………………………
4. Decrease of equity …………………………………
5. Decrease of expenses ……………………………….
6. Increase of liability ……………………………….
7. Decrease of assets ………………………………..
8. Decrease of labiality ……………………………….
9. Increase of assets ……………………………….
10. Increase of income ………………………………..

15. Classify the following accounts as assets, liabilities, income, expenses & equity.
Account Name Classification
1. Motor vehicle …………………………………….
2. Bank overdraft …………………………………….
3. Rent received …………………………………….
4. Electricity paid …………………………………….
5. Capital …………………………………….
6. Creditors ……………………………………
7. Closing stock ……………………………………
8. Accrued expenses ……………………………………
9. Pre received income ……………………………………
10. Drawings …………………………………..
11. Purchase returns / Return outwards …………………………………..
12. Sales returns / Return inwards …………………………………..
13. Debtors ……………………………………
14. Land & building …………………………………..
15. Cost of sales ………………………………….

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Double Entry System Questions

16. Nayani has provided following information for the month of June 2020.
1/6 – Nayani invested Rs. 200 000 and commenced a business.
4/6 – Purchased Rs. 20 000 worth furniture
9/6 – Cash purchase of goods Rs. 15 000
10/6 – Purchased goods worth Rs. 7 000 from Kapila
12/6 – Sold goods worth Rs. 9 000 to Oshada
15/6 – Cash paid to Kalidu Rs. 2 000
18/6 – The owner withdrew Rs. 10 000 worth goods for his personal use.
19/6 – Business obtained a bank loan rs. 100 000
21/6 – Salary paid Rs. 10 000
25/6 – Business deposited Rs. 20 000 in a fixed deposit
29/6 – Interest income received Rs. 1 500
30/6 – Cash received from Oshadha Rs. 5 000
Required,
Post the transactions to the ledger and balance them off.

17. Amarasinghe has started a business as “Amarasa Curd” on 01/01/2020 by investing Rs. 150
000 in cash and borrowed a loan of Rs. 700 000 to distribute pots of curd to canteens of
government institutes in Colombo. On the same day, a current account was opened by
depositing Rs. 20 000.
The following transactions occurred during the month of January 2020.
5/1 – Business purchased 30 000 pots of curd. Cost per pot of curd is Rs. 20 and selling price
per pot is Rs. 30.
8/1 – Paid Rs. 75 000 as wages to the lorry driver for the month of January
15/1 – Paid Rs. 25 000 to purchase containers for carrying the pots of curd
18/1 – Paid Rs. 30 000 for fuel and other expenses
25/1 – Deposited Rs. 500 000 in a fixed deposit
 No any closing stock at the end of the month
Required
Post the transactions to the ledger and balance them off