Journal Revision for ACCT 5942 Students

Complete the main journal entries encountered in recording the transactions and
events of a company shown below. You may ignore any goods and services tax and
income tax consequences.

Transaction or event Journal

1. Credit sale to a customer * Dr. Accounts receivable

Cr. Sales revenue

2. Cash sale to a customer * Dr. Cash

Cr. Sales revenue

* See also journal 14. to record the cost of sale if a perpetual inventory system

3. Cash received on account Dr. Cash

from a customer with no Cr. Accounts receivable
discount allowed

4. Cash received on account Dr. Cash

from a customer with Dr. Discount allowed
discount allowed Cr. Accounts receivable

5. Return of goods from a Dr. Sales returns

customer Cr. Accounts receivable
Dr. Inventory
Cr. Cost of sales

6. Raising an allowance for bad Dr. Doubtful debts expense

and doubtful debts Cr. Allowance for doubtful debts

17
Transaction or event Journal

7. Writing a bad debt off Dr. Allowance for doubtful debts

against the allowance for bad Cr. Accounts receivable
and doubtful debts

8. Writing a bad debt off where Dr. Bad debts expense

there is no allowance Cr. Accounts receivable
account

9. Reduction of allowance for Dr. Allowance for doubtful debts

bad and doubtful debts based Cr. Doubtful debts expense
on ageing analysis

10. Opening inventory (periodic Dr. COGS Opening inventory

inventory system) * Cr. Inventory

11. Credit purchase of inventory Dr. COGS Purchases

from a supplier (periodic Cr. Accounts payable
inventory system) *

12. Closing inventory (periodic Dr. Inventory

inventory system) * Cr. COGS Closing inventory

* Journals 10 and 12 assume that separate accounts for the beginning and ending inventory components of cost of
goods sold are recognised as part of the compilation of a full trial balance.

13. Credit purchase of inventory Dr. Inventory

from a supplier (perpetual Cr. Accounts payable
inventory system)

18
Transaction or event Journal

14. Cost of sale (perpetual Dr. Cost of goods sold

inventory system) Cr. Inventory

15. Write down of inventory to Dr. Writedown expense

net realizable value Cr. Inventory

16. Cash payment on account to Dr. Accounts payable

supplier with no discount Cr. Cash

17. Cash payment on account to Dr. Accounts payable

supplier with discount Cr. Discount received
received Cr. Cash

18. Raising a provision for Dr. Warranty expense

warranty Cr. Provision for warranty

19. Payment of the costs of Dr. Provision for warranty

warranty claims Cr. Cash

20. Depreciation of plant for the Dr. Depreciation expense

period Cr. Accumulated depreciation

21. Goodwill written off Dr. Impairment loss

Cr Goodwill

19
Transaction or event Journal

22. Reversing entry for accrued Dr. Accrued audit fees

audit fees outstanding at the Cr. Audit fees expense
beginning of the period

23. Recording audit fees paid Dr. Audit fees expense

during the reporting period Cr. Cash

24. Adjusting entry for the Dr. Audit fees expense

accrual of audit fees that are Cr. Accrued audit fees
owing at end of the period

25. Recording insurance paid in Dr. Prepaid insurance

advance during the reporting Cr. Cash
period

26. Adjusting entry for prepaid Dr. Insurance expense

insurance at the end of the Cr. Prepaid insurance
period

27. Acquisition of shares in Dr. Investment in shares

another company for cash Cr. Cash
consideration

28. Acquisition of land in return Dr. Land

for issue of shares Cr. Share capital

20
Transaction or event Journal

29. Acquisition of land in return Dr. Land

for issue of debentures Cr. Debentures

30. Sale of land (at cost) for cash Dr. Cash

proceeds resulting in a gain Cr. Land
Cr. Gain on sale

31. Sale of buildings (at written Dr. Cash

down cost) for cash proceeds Dr. Accumulated depreciation
resulting in a gain Cr. Buildings
Cr. Gain on sale

32. Borrowing money from a Dr. Cash

bank Cr. Borrowings

33. Interest due and paid on Dr. Interest expense

borrowed funds at the end of Cr. Cash
the period

34. Interest due and payable at Dr. Interest expense

the end of the period Cr. Interest payable

35. Repayment of borrowings Dr. Borrowings

Cr. Cash

21
Transaction or event Journal

36. Loan made to a related entity Dr. Loan receivable

Cr. Cash

37. Interest due and receivable at Dr. Interest receivable

the end of the period Cr. Interest revenue

38. Issuing shares for cash Dr. Cash

consideration Cr. Share capital

39. Conversion of unsecured Dr. Unsecured Notes

notes into ordinary shares Cr. Share capital

40. Dividends declared and Dr. Dividends provided

approved but unpaid in the Cr. Provision for dividends
current period

41. Payment of dividends for Dr. Provision for dividends

which a provision exists Cr. Cash

42. Dividends appropriated and Dr. Dividends paid

paid in the current period Cr. Cash

43. Transfer from retained Dr. Transfer to general reserve

profits to general reserve Cr. General reserve

22
Transaction or event Journal

44. Transfer from general Dr. General reserve

reserve to retained profits Cr. Transfer from general reserve

45. Transfer from asset Dr. Asset revaluation reserve

revaluation reserve to capital Cr. Capital profits reserve
profits reserve

46. Bonus share issue from Dr. Capital profits reserve

capital profits reserve Cr. Share capital

47. Share buyback at issue price Dr. Share capital

Cr. Cash

48. Revaluation of land above Dr. Land

cost Cr. Asset revaluation reserve

49. Revaluation of buildings Dr. Accumulated depreciation

above written down cost Cr. Buildings
Dr Buildings
Cr. Asset revaluation reserve

* In ACCT 2542 we will expand on journals 48 and 49

50. Loan receivable forgiven Dr. Loan writedown expense

Cr. Loan receivable

23