MODULE NAME : FUNDAMENTALS OF ACCOUNTING /

PRINCIPLES OF ACCOUNTING / ACCOUNTING PRINCIPLES

FIRST YEAR : BFB, BA, BAF, BAIT, BB APPR, BET, BIRM APPR & BAA.

TOPIC THREE
BOOKS OF PRIME ENTRY

3.1 SOURCE DOCUMENTS

Each time a company makes a financial transaction, some sort of paper trail is generated. That paper
trail is called a source document. If a small business writes a cheque out of its cheque account for office
supplies, for Illustration, the source document is the cheque along with the receipt for office supplies.
The source document is the original record of a transaction. When a business transaction occurs the
source document captures the key data of the transaction. A source document describes all the basic
facts of the transaction such as the amount of the transaction, to whom the transaction was made, the
purpose of the transaction, and the date of the transaction.
During an audit, source documents are used as evidence that a particular business transaction occurred.
The source document is the initial input to the accounting process and serves as objective evidence of
the transaction, serving as part of the audit trail should the firm need to prove that a transaction occurred.

The source document is essential to the bookkeeping and accounting process. It is the evidence that a
financial transaction occurred. If a company is audited, source documents back up the accounting
journals and general ledger as an indisputable audit trail.
The source document is an early document in the accounting cycle. It provides the information required
to analyze and classify the transaction and to create the journal entries.

Some Illustrations of source documents:

• Customer invoices
• Supplier invoices
• Cash receipts
• Cheques
• Purchase orders
• Deposit slips
• utility bills

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 I. Invoice

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products,
quantities, and agreed prices for products or services the seller has provided the buyer. An invoice
indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum
amount of days to pay for the goods and sometimes discount can be offered is payment is made earlier.
From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an
invoice is a purchase invoice.

II. Cash Receipt

The cash receipt is a simple document of a transaction that is often issued at the time of the completion
of a sale.
In general, the cash receipt serves two purposes:
ü First, the document serves as a permanent record for the vendor. The cash receipt allows for
the orderly posting of sales on a daily basis, as well as providing a document that can be used
in adjusting current inventory levels.

ü Second, the cash receipt provides the customer with a permanent record of the transaction that
can be employed to keep the financial records of the client up to date.
Every cash receipt includes basic information like the date of the transaction, a list of the prices of the
items purchased, subtotal, applicable taxes, and a final total.

III. Payment Voucher

A voucher is an accounting document representing an internal intent to make a payment to an external

entity, such as a vendor or service provider. A voucher is produced usually after receiving a vendor
invoice and when invoice is successfully matched to a purchase order. A voucher will contain detailed
information regarding the payee, the monetary amount of the payment, a description of the transaction,
and more.

IV. Purchase order (PO)

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types,
quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a PO
to a supplier constitutes a legal offer to buy products or services. Acceptance of a PO by a seller usually
forms a contract between the buyer and seller, so no contract exists until the PO is accepted.
There are several reasons why companies use POs. POs allow buyers to clearly and explicitly
communicate their intentions to sellers, and sellers are protected in case of a buyer's refusal to pay for
goods or services. POs also help a purchasing agent manage incoming orders and pending orders.

Credit memo/Credit note

If the buyer returns the product, the seller usually issues a credit memo for the same or lower amount
than the invoice, and then refunds the money to the buyer.

Debit memo
When a company short-pays an invoice or when the invoice is under billed, it is common practice to issue
a debit memo. In function debit memos are identical to invoices.

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 V. Utility bills

Bills from utility companies are based on measured (metered) use of electricity, water, natural gas or
other utilities at a residence or business. When an individual or business applies for service from the
utility (opens an account), he signs an agreement (contract) to pay for his metered use of the utility.

VI. Cheque

A cheque (or check in American English) is a document/instrument (usually a piece of paper) that orders
a payment of money. The person writing the cheque, the drawer, usually has a chequing account where
money was previously deposited. The drawer writes the various details including the money amount,
date, and a payee on the cheque, and signs it, ordering the bank, known as the drawee, to pay a person
or company the amount of money stated.

The cheque book

The cheque book is simply a book of blank cheques given to the depositor which he may use to draw
on his deposit when he pleases. Most check books are so arranged that the cheque may be torn out and
a stub left in the book, which serves as a reference to the depositor and has spaces in which he may
enter the name of the person to whom the check was given, the amount, the number, the purpose of the
check, the amount left in the bank, and amounts deposited.

VII. Deposit slip

A deposit slip is a printed form which accompanies bank deposits. The depositor fills out the deposit slip
to indicate what types of funds are being deposited and which accounts they should be deposited into.
In some cases, a bank will pre-print deposit slips with account information and include them in a
checkbook. Deposit slips are used by a bank to keep track of the money deposited over the course of a
business day, and to ensure that no funds slip through the cracks. For bank clients, a deposit slip offers
a form of protection, indicating that funds were counted and accepted by the bank. If the deposit is
processed improperly, the deposit slip will provide a paper trail.

Relevance of source documents

The source documents that your business provides and collects must give you information you need.
Whether your systems are paper based, electronic or combination, you need source documents that;

• Show details of each transaction e.g suppliers, items and value.

• Help collect information to put into your systems.

• Can be used to prove a transaction has taken place.

• Serve as evidence of the terms and conditions agreed upon by your business and the other
person or organization that it’s dealing with.

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3.2 Books of Original Entry

Books of account are broadly divided into two:

• Journals
• Ledgers

3.2.1 JOURNALS
Journal is a French word meaning ‘Daily record’ and it was called so because everything that happened
everyday was entered into the book at once before the business man could forget the exact details of
the transactions.

Journal is the first accounting record where transactions are entered, it is sometime referred to as a
record of original entry or prime entry. The transactions are entered in a chronological order – in the
order in which they happen day by day.

Whenever business transactions occur, they must be recorded in journals before being posted to the
ledger. Journals are prepared from source documents such as invoices, bank paying in slip, voucher.

The process of recording business transaction in a journal is called journalizing a transaction.

TYPES OF JOURNALS
ü General journals/journal proper
ü Sales Journal or sales day book
ü Purchases journal or purchases day book
ü Return inwards book
ü Return outward books

i. General journals/journal proper

This is the simplest type of journal. It has two money columns for debits and credits. It may be used for
any type of transaction. However in practice credit sales and credit purchases of the trading stock,
return inwards and outwards are recorded in specialized journals. This leaves purchase and sales of
fixed assets, correction of errors and adjusting entries to be recorded in the general journal.

NB: For learning purpose all transactions should be entered into a general journal initially because it
clearly shows how the double entry is fulfilled.

Format of the general journal (Journal Proper)

Date Account title and explanation Folio/LP Debit Credit

Date: Dates at which the transactions occurred are entered in this column.

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Account title and explanation: The name of the account involved in the transaction is entered in this
column plus narration or explanation of the transaction.

Folio: This column shows the reference where the accounts can be found in the ledger especially the
page number of the account in the ledger. At time instead of using folio, LP standing for ledger page is
used.

Illustration 1
Lolo, a businessman in Market Street entered into the following transactions:

Oct 1 started a business with 20, 000, 000/=cash.

Oct 2 purchased land for the business at 3,000, 000/=cash.
Oct 4 purchased office equipments on credit for 2, 000, 000/= from equipment suppliers Ltd.
Oct 5 obtained bank loan of 8,000, 000/= it was deposited to the bank account.
Oct 15 Made part payment of 1500, 000/=to equipment suppliers ltd by cheque.
Oct 17 Bought motor vehicle from Toyota Motors Ltd at a cost of 15, 000, 000/=. Made cash
payment of 10, 000, 000/=, paid 3,000, 000/= by cheque and promised to pay the balance later.
Oct 20 Sold apportion of land that was unutilized for 500,000/=cash.
Oct 25 Fully settled the balance of 2,000, 000/= by cheque due to Toyota Motors Ltd for the motor
vehicle.
Oct 30 800,000/= business cash was used to entertain relatives from the upcountry.

REQUIRED: Enter the above transactions into general journal.

ii. Sales journal

It is a book of original entry used for taking records of only credit sales. It is a specialized journal for
only credit sales.

When credit sale takes place, the seller sends an invoice to the buyer. This invoice is made out in
duplicate, and the seller retains a copy. This copy is the source document from which a sales journal or
a sales day book is written up. The individual sales to the buyer are recorded in the sales day book are
immediately posted to debit of the buyers’ or customers accounts in the sales ledger while the total
sales of the sale day book is posted to the credit side of the sales account in the general ledger at the
end of each month.

Format of sales Journal

Date Account debited (debtors Accounts) Invoice No. folio amount

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 Illustration 2
Massawe sold goods to the following people on credit
September 1 John for 450,000/= invoice No.301
4 Anne for 1, 000, 000/= invoice No.302
6 Mukasa for 900, 000/= invoice No.303
10 Hashim for 500, 000/= invoice No.304
16 Mwasha for 1,500, 000/= invoice No.305
Record the above transactions into a sales journal/sales day book.

iii. Purchases journal

It is a book of original entry for taking records of only credit purchases. It is a specialized journal for only
purchases on credit.

When goods are purchased on credit, the seller will send an invoice to the buyer. The record of this
purchase in the books of the business would be entered in the purchases journal/purchases day book.
The individual entries in the purchases day book are immediately posted to the credit of the suppliers’ or
creditors’ account in the purchases ledger while the total of the purchases day book is posted to debit of
the purchases account in the General ledger usually on the last day of the month.

Format of purchases Journal

Date Accounts Credited (Creditors Account) Invoice No. Folio Amount

Illustration 3
Record the following transactions into the purchases journal/purchases day book.
Feb 1 Bought goods on credit from Tom for 2000, 000/= invoice No.0199
5 Bought goods on credit from AD enterprises for 4,000, 000/ invoice No.0200
12 Bought goods on credit from Mapunda for 5,000, 000/= invoice No.0201
15 Bought goods on credit from Joy for 10, 000, 000/= invoice No.0202
20 Bought goods on credit from Kim Investments for 6000,000/= invoice No.0203

iv. Purchases return day book

The purchases return day book, sometime referred to as the return outwards journal, is used to record
goods returned by the customer to the supplier. There are various reasons which prompt the buyer to
return goods to the supplier. Some of these reasons are:
Goods not up to the sample.
Goods damaged in transit.
Goods not of the quality ordered.

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As soon as goods are returned the supplier issues the customer with a credit note. A credit Note informs
the customer that his account with the seller has been duly credited to reduce the amount of sales
previously made to him. In turns the customer debits the supplier’s account to reduce the amount of
purchases previously made from him.

It should however be noted that a credit note is sometimes used to rectify an overcharge on the invoice
or to provide an allowance. On the credit note full explanation or reasons for the allowance should be
given.

Format of purchases returns journal

Date Particulars Folio Amount

Illustration 4
Enter the following transactions in the purchases return day book.
March 4 Returned goods to Mashaka General stores Shs. 16, 800, 000/= not up to the
sample.
17 Received a credit note from Kivumbi Wholesalers:
12 sponge mattresses at 120,000/= each, wrong type.
20 Return goods to H. Patel Shs 1,240, 000/= not of the type ordered.
23 Chacha and Sons Ltd issued a credit note for:
60 cartons of salt @ 5000/= not ordered.
35 pairs of slippers @2,500/= wrong size.

v. The sales return day book.

When goods are returned by customers to the supplier, a credit note is issued by the supplier to the
customer acknowledging the receipt of goods returned and informing the customer that his account has
been duly credited. The supplier will then record the return of the goods in sales return day book. The
individual returns recorded in the sales return day book are immediately posted to the credit side of
customers’ account in the sales ledger while the total of sales returns day book is debited to returns
inwards account in the general ledger.
At time, customers return goods to supplier along with a debit note as an indication that the suppliers
account has been duly debited. But debit note is not very much in use, the polite way is the customer to
wait for a credit note from the supplier.

Format of sales returns journal

Date Particulars Folio Amount

Illustration 4
Record the following transactions in the sales return day book.
May 2 A credit note was sent to S.Sadala for goods returned by him 1,250, 000/= wrong type.

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 5 Return of goods by H. Hosanna shs 915, 000/= not according to the order. On the same
date a credit note was sent to Lewis for goods returned by him shs 1050, 000/= damaged in transit.
18 Mlowe was issued a credit note for goods returned by him, worth
1,200, 000/= not of the sample.
25 A credit note was sent to Chande&Brother Ltd for goods returned, worth
2,000, 000/= wrong size

3.2.2 Ledgers
A business may use accounts in recording its transactions. Each account is placed on a separate page
in a bound or loose-leaf book, or on a separate card in a tray of cards.
If accounts are kept in a book, the book is called the ledger. If they are kept on cards in a file tray, the
tray of cards is a ledger.
Ledger means a group of accounts or a place where accounts are kept. Transactions are posted from
the journals to the ledger.
An account is defined as means or heading under which related transactions are brought together i.e.
classification of similar transactions in a chronological order.

Types of ledgers
Ledgers are broadly categorized under the following:
ü General ledgers
ü Subsidiary ledgers

A. General Ledgers/Main ledger

The general ledger is the main ledger of an organization. It is supposed to contain all ledger accounts of
the organization. In case there are too many accounts in the organization, it is only control accounts that
should appear in the general or main ledger and others are recorded in the subsidiary ledgers.

The general ledger is supposed to contain all accounts of that organization. However for ease of recording
and retrieval of accounts, the general ledger is separated into subsidiary ledgers.

B. Subsidiary Ledgers
In order to avoid crowding the general or main ledger with all accounts, subsidiary ledgers are created.
Subsidiary ledgers are sub-divisions of the general or the main ledger. It is only the major accounts that
appear in the general ledger. Details of the general ledger accounts can be seen in the subsidiary
ledgers.

Types of subsidiary ledger

• Debtors or sales ledger
• Creditor or purchases ledger
• Private ledger
• The cash book (though also a journal)

NB: Sales and purchases ledgers are sometimes referred to as nominal ledger because they show
purchases and sales which are nominal accounts.

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 • Debtors subsidiary ledger (sales ledger)
It is often difficult to show each and every debtor’s account and its transactions in the general ledger. To
overcome this problem, debtor’s subsidiary ledger is prepared. This subsidiary ledger shows the position
of each debtor’s account. The total of individual debtors’ account balances in the debtors or subsidiary
ledger should reconcile with the balance of the debtors control account in the main or general ledger.

• Creditors subsidiary ledger (purchases or bought ledger)

The creditors subsidiary ledger shows the details of each creditor’s account. It is not possible to show
this in the general ledger. The total of individual creditors’ account balances in the creditors’ or purchases
subsidiary ledger should reconcile with the creditors control account in the general ledger.

• Private ledger
It is a store place for accounts that management may wish to keep secret. The accounts to be kept secret
vary from one organization to another. Many organizations keep their capital, drawings, purchases,
turnover, etc accounts private.

ILLUSTRATION ONE
Write up the following transactions in the records of
O. Maithya:
2023
Oct 1: Commenced business with 9,500,000/= in the bank
2: Purchase motor van on credit from L. Obaka for 3,825,000/=
4: Paid 1,100,000/= by cheque for equipment
6: Bought goods 6,200,000/= on credit from S. Kibaki.
7: Withdrew 400,000/= from the bank for business use
9: Sold goods on credit to:M. Muthongo 820,000/=; L.Nganda 1,560,000; B. Simiyu 1,700,000.
11: Paid wages 220,000/= in cash
12: Bought goods 100,000/= for cash
13: returned faulty goods 371,000/= to S.Kibaki
14: Purchased goods on credit from: N. Obat 975,000/=; L. Kahahu 2,630,000/=; S.Kibaki 4,711,000/=
15: Motor expenses 70,000/= paid in cash.
15: Cash sales 825,000/=
18: Bought stationery 68,000/= on credit from W. Gichuhi
20: Paid 800,000/= cash into the bank
21: Sent cheque 5,829,000/= to S. Kibaki
23: L. Nganda returned goods 130,000/=
25: Sold goods on credit to: L. Nganda 2,410,000; B. Simiyu 3,168,000/=; T.Obaka 415,000/=
26: Cash sales 530,000
29: Cheques received from: N.Muthongo 820,000; L. Nganda 1,430,000/=
31:Cheques sent to: N. Obat 975,000/=; L. Kahahu 2,630,000/=
31: Wages 300,000/= paid in cash

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 REVIEW QUESTIONS

QUESTION ONE
Connie commenced a stationery business on 1st January 2022 with her salary savings of 500, 000/= which
she was keeping with Stanbic Bank. She transformed her personal account into business account and
thereafter the salary had to be channeled to her account with Barclays. She also took on her sister as
her assistant in the business and she was to be pad salary of Shs 50, 000 per month. During the month
of January, she carried out the following transactions:

Jan 1 She withdrew shs 100, 000 for use in the day to day operations of the business.
2 Bought stationery worth shs150, 000 from ABC stationery on credit, and also transferred her furniture
worth shs 100, 000 from home for use in the business.
3 Bought further stock of stationery at shs 180, 000 and paid by cheque. She also paid shs 15,000 for
transporting the stationery to the place of work paying cash.
5 Cash sales were shs 80, 000. She also sold stationery to Arumeru primary school at shs 140, 000 on
credit.
7 Paid ABC stationery shs 90, 000 by cheque for stationery previously bought, and returned some spoilt
stationery worth shs 7000 on the same day.
10 Bought stationery worth shs 200, 000 from Kim Investment Ltd on credit.
13 Arumeru primary school paid shs 60, 000 by cheque and returned some items worth shs 8000 which
had not been ordered for.
20 Sold books worth shs 23, 000 to Ngaramtoni primary school on condition that payment is made before
the end of the month.
25 Paid salary to her assistant, by cheque.
30 She agreed with Picfare Induries Ltd to purchase stationery worth shs 200, 000 per month and
delivery would begin early February.

Required:
Record transactions into the books of original entry.

QUESTION TWO
Mushi a sole trader had the following balances brought forward from September 2020 and transactions for
October 2020.

October 1: Balance b/d (opening balances for October)

Cash 5,000,000/=
Bank 3,000,000/=
Debtors’ control a/c 4,000,000/=

Individual debtors’ balances

Henry 1,000,000/=
Papa 3,000,000/=
Creditors’ control a/c 12,000,000/=

Individual creditors’ balances

Julius 5,000,000/=
Ketty 7,000,000/=

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October 2: Purchase goods from Julius for 3,000,000/= on credit.
3: Purchased goods from Ketty for 4,000,000/= on credit.
5: Cash sales 4,000,000
6: Returned goods worth 300,000/= to Julius
7: Sold goods to Papa on credit for 7,000,000/=
9: Sold goods to Henry for 9,000,000/= on credit.
10: Henry returned goods worth 200,000/=
13: Purchased goods from Ketty on credit for 5,000,000/=
15: Received cash of 1,000,000/= and a cheque of 4,000,000/= from Henry.
17: Paid Julius 1,000,000/= cash
19: Returned goods worth 500,000/= to Ketty
20: Papa returned goods worth 400,000/=
22: Cash sales 7,000,000/=
23: Paid 1,000,000/= cash to bank
25: Received a cheque of 1,000,000/= and cash of 5,000,000/= from Papa.
26: Paid Julius 1,500,000/= and Ketty 3,000,000/= by cheque.
27: Sold goods for 6,000,000/= to Henry and Papa 8,000,000/= all on credit.
28: Bought goods for 4,500,000/= on credit from Julius and paid Ketty 2,000,000/= cash
29: Withdrew cash of 3,000,000/= from the bank for business use.
30: Paid rent 1,000,000/= cash and 500,000/= by cheque
31: Paid salaries 2,000,000/= cash and 1,500,000/= by cheque.

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SOLUTION OF ILLUSTRATION ONE

1. JOURNALS
GENERAL JOURNAL ( O.Maithya)
Date Account title and explanation Folio Debit Credit
DR: Bank 9,500,000
01/10 CR: Equity 9,500,000
Being initial equity
DR: Motor Van 3,825,000
02/10 CR: L.Obaka (creditor) 3,825,000
Being credit purchase of a Motor Van
DR: Equipment 1,100,000
04/10 CR: Bank 1,100,000
Being equipment bought by cheque
DR: Cash 400,000
07/10 CR: Bank 400,000
Being amount drawn from the bank to cash for
office use
DR: Cash 220,000
11/10 CR: Wages 220,000
Being wages paid in cash
25/10 DR: Purchases 100,000
CR: Cash 100,000
Being cash purchases
15/10 DR: Motor Expenses 70,000
CR: Cash 70,000
Being cash paid for motor van expenses

15/10 DR: Cash 825,000

CR: Sales 825,000
Being cash sales

18/10 DR: Stationary Expenses 68,000

CR: W. Gichuhi 68,000
Being stationary bought on credit

DR: Bank 800,000

20/10 CR: Cash 800,000
Being cash transfer to the bank

DR: S.Kibaki 5,829,000

CR: Bank 5,829,000
21/10 Being payment for credit purchases

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 DR: Cash 530,000
26/10 CR: Sales 530,000
Being cash sales

DR: Bank
29/10 CR: N.Muthongo 2,250,000
L. Nganda 820,000
Being repayments from debtors 1,430,000

31/10 DR: N. Obat 975,000

L. Kahahu 2,630,000
CR: Banks 3,605,000

Being payments to creditors

DR: Wages 300,000

CR: Cash 300,000
31/10 Being cash payment of wages

Sales Journal

Date Account debited (debtors Accounts) Invoice No. folio amount

9/10 M. Muthongo 820,000
9/10 L.Nganda 1,560,000
9/10 B. Simiyu 1,700,000
14/10 T.Obaka 415,000
14/10 L.Nganda 2,4100,000
14/10 B. Simiyu 3,168,000

Purchases Journal

Date Accounts Credited (Creditors Account) Invoice No. Folio Amount

6/10 S.Kibaki 6,200,000

14/10 N. Obat 975,000

14/10 L. Kahahu 2,630,000
14/10 S.Kibaki 4,711,000

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Sales Returns Journal (return inwards)

Date Particulars Folio Amount

23/10 L. Nganda 130,000

Purchase Returns Journal (return outwards)

Date Particulars Folio Amount

13/10 S.Kibaki 371,000

2. LEDGERS
**B/c means Balance carried down

DR Equity CR
1/10 Bank 9,500,000
B/c 9,500,000
9,500,000 9,500,000

DR Bank CR
1/10 Equity 9,500,000 4/10 Equipment 1,100,000
20/10 Cash 800,000 7/10 Cash 400,000
29/10 N.Muthongo 820,000 21/10 S.Kibaki 5,829,000
29/10 L. Nganda 1,430,000 31/10 N. Obat 975,000
31/10 L. Kahahu 2,630,000
B/c 1,616,000
12,550,000 12,550,000

DR Motor Van CR
2/10 L.Obaka 3,825,000 B/c 3,825,000

3,825,000 3,825,000

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DR L.Obaka (creditor) CR
B/c 3,825,000 2/10 Motor Van 3,825,000

3,825,000 3,825,000

DR Equipment CR
4/10 Bank 1,100,000 B/c 1,100,000

1,100,000 1,100,000

DR Purchases CR
6/10 S.Kibaki 6,200,000 13/10 S.Kibaki 371,000
12/10 Cash 100,000
14/10 N. Obat 975,000
14/10 L. Kahahu 2,630,000
14/10 S.Kibaki 4,711,000 B/c 14,245,000
14,616,000 14,616,000

DR S.Kibaki (creditor) CR
13/10 Purchases 371,000 6/10 Purchases 6,200,000
21/10 Bank 5,829,000 14/10 Purchase 4,711,000
B/c 4,711,000
10,911,000 10,911,000

DR Cash CR
7/10 Bank 400,000 11/10 Wages 220,000
15/10 Sales 825,000 12/10 Purchases 100,000
26/10 Sales 530,000 15/10 Motor Expences 70,000

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 20/10 Bank 800,000
31/10 Wages 300,000
B/c 265,000

1,755,000 1,755,000

DR Sales (revenue) CR
23/10 L.Nganda 130,000 9/10 M. Muthongo 820,000
9/10 L.Nganda 1,560,000
9/10 B. Simiyu 1,700,000
15/10 Cash 825,000
25/10 T.Obaka 415,000
25/10 L.Nganda 2,410,000
25/10 B. Simiyu 3,168,000
26/10 Cash 530,000

B/c 11,298,000
11,428,000 11,428,000

DR M. Muthongo (debtor) CR
9/10 Sales 820,000 29/10 Bank 820,000
B/c -
820,000 820,000

DR L.Nganda (debtor) CR
9/10 Sales 1,560,000 23/10 Sales 130,000
25/10 Sales 2,410,000 29/10 Bank 1,430,000
B/c 2,410,000
3,970,000 3,970,000

DR B. Simiyu (debtor) CR
9/10 Sales 1,700,000
25/10 Sales 3,168,000 B/c 4,868,000
4,868,000 4,868,000

DR Wages (expenses) CR
11/10 Cash 220,000

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31/10 Cash 300,000 B/c 520,000
520,000 520,000

DR N. Obat (creditor) CR
31/10 Bank 975,000 14/10 Purchase 975,000
B/c -
975,000 975,000
DR L. Kahahu (creditor) CR
31/10 Banks 2,630,000 14/10 Purchase 2,630,000
B/c -
2,630,000 2,630,000

DR Motor Expenses CR
15/10 Cash 70,000 B/c 70,000
70,000 70,000

DR Stationary Expenses CR
18/10 W.Gichuhi 68,000 B/c 68,000

68,000 68,000

DR W. Gichuhi (creditor) CR
B/c 68,000 18/10 Stationary Exp. 68,000
68,000 68,000

DR T.Obaka (debtor) CR
25/10 Sales 415,000 B/c 415,000
415,000 415,000

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 3. Trial Balance
Trial balance of O.Maithya at the end of the Month ended 31st October
2023.
Account title Debit (Tshs) Credit (Tshs.)
Equity 9,500,000
Motor Vehicles 3,825,000
Equipment 1,100,000
Cash and Bank (1,616,000+265,000) 1,881,000

Purchases 14,245,000
Sales 11,298,000
Trade Creditors 4,711,000
Other Creditor (3,825,000+68,000) 3,893,000
Trade Debtors 7,693,00
Wages 520,000
Office expenses (stationary, Motor exp etc 138,000
Total 29,402,000 29,402,000

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