1. Accounting Pathway for HSC
Answers to Workbook

2. Exercise 1

3. Circle those items that are assets to a business:
a) land
b) amounts contributed by the proprietor
c) computer equipment
d) filing cabinets
e) cash at bank
f) accounts payable (amounts we owe)
g) accounts receivable ( amounts owed to us)
h) cash withdrawn by the owner to pay personal debts
i) owners contribution to business
j) office furniture

4. Circle those items that are liabilities to a business:
a) loan to sales manager
b) interest on bank loan
c) loan from JLW Finance Company
d) bank overdraft
e) accounts payable
f) accounts receivable
g) cash at bank
h) mortgage
i) factory equipment
j) A lease on a car

6. Exercise 2

8. Revision

9. OWNED
Assets are items ………………… by the business. There are two categories of assets:
Current assets (assets that will be kept by the business for no longer than 12 months). 1. 2. 3. 4.
Non current assets (purchased by the business with the view that they will be kept and used by the business for more than 12 months).
Liabilities are the amounts ……………………. by the business. There are two categories of liabilities:
Current liabilities (amounts that will be repaid by the business within 12 months).
Non current liabilities (amounts that will be repaid by the business over a longer period of time, that is it will take longer than 12 months to pay off).
Accounts Receivable
Cash at Bank
Inventory
Petty Cash
Investment account (for 3 years)
Motor vehicle
Plant & Equipment
OWED
Accounts Payable
Bank overdraft
Mortgage
Loan (due in 18 months)
Please Note: these are examples only and other accounts may apply under the various categories / classifications.

10. OWNERS
Proprietorship represents the …………………. SHARE of the business.
This includes the amount originally invested, profits and losses, additional investment etc. 1. 2. 3.
Income or revenue is the ……………………of the business.
Expenses are the …………………. of running the business. 4. 5. 6.
Capital
Drawings
Net Profit or Net Loss
EARNINGS
Sales
Rent Received
Interest Received
COSTS
Salaries and Wages
Electricity
Rent
Interest
Accountancy Fees
Stationery
Please Note: these are examples only and other accounts may apply under the various categories / classifications.

11. PUZZLE

12. DEB I T I NVENTORY A R E D I T I C O M JOURNAL E V E N E S S E S
SOURCE
I NVENTORY A K
R E D I T I
C O M
JOURNAL
PROFIT
E V E N E
S S E S
G O O D W I L

13. Exercise 3

14. Liability
Credit
Asset
Debit
Asset
Debit
Proprietorship
Credit
Expense
Debit
Income
Credit
Income
Credit
Expense
Debit
Asset
Debit
Asset
Debit
Liability
Credit
Asset
Debit
Liability
Credit
Income
Credit
Expense
Debit
Expense
Debit

15. Exercise 4

16. 4 a)
15000
22000
2250
100
20000
19000
96620
1375
1180
36750
41625
15000
20000
125
185000
90250
2150
4850
244350
21675
419650
419650

17. 4 b)
15000
2000 50
100
50000
10000
5620
375
180
6750
1625
15000
20000
125
85000
10250
150
850
28800
1675
650
127100
127100

18. 4 c)
15000
22000 50
100
50000
10000
56620
375
180
26750
11625
15000
20000
125
185000
110250
150
4850
146700
11675
1650
344050
344050

19. Exercise 5

20. Circle the missing word (debit or credit) to complete the following statements ….
a) increase in proprietorship are recorded as a debit credit
b) goodwill will usually have a ? balance debit credit
c) decreases in income are recorded as a debit credit
d) bad debts will usually have a ? balance debit credit
e) assets usually have a ? balance debit credit
f) rent and interest received have a ? balance debit credit
g) drawings have a ? balance debit credit
h) payments from the bank account are a debit credit
i) decrease in expenses are recorded as a debit credit
j) rent will usually have a ? balance debit credit

21. Exercise 6

22. Circle the correct response to the question below :
(i) An example of a current liability would be:
(a) Bank overdraft
(b) Mortgage on buildings
(c) 5 year loan
(d) Cash at Bank
(ii) The principle that for every debit there is an equal and corresponding credit or debits = credits, is referred to as:
(a) golden rule
(b) matching
(c) balanced sides
(d) double entry
(iii) Which type of business ownership features joint and several liability?
(a) Sole trader
(b) Company
(c) Partnership
(d) both (a) and (c)
(iv) An example of a non current asset would be:
(a) Loan from ABC Loans
(b) Plant and Machinery
(c) Accounts Receivable
(v) Which type of business ownership has limited liability?

23. (vi) The owners share of the business is called:
(a) liabilities
(b) expenses
(c) assets
(d) proprietorship
(vii) The business will incur costs on a regular basis, these costs are referred to as:
(a) incomes
(b) balances
(c) revenues
(d) expenses
(viii) An example of a non current liability would be:
(a) Loan (due to be repaid in 36 months)
(b) Plant and Machinery
(c) Accounts Receivable
(d) overdraft at bank
(ix) An example of a Current Asset would be:
(a) Motor vehicle
(b) Accounts receivable
(c) Bank overdraft
(d) Accounts payable
(x) Cash drawn by the owner of the business for their personal use is debited to:
(a) cash at bank
(b) capital
(c) drawings
(d) purchases

24. Exercise 7

25. Find the missing figure in the following transaction analysis
ASSETS = LIABILITIES + PROPRIETORSHIP
$55,000 = + $13,850
$47,500 = $23,250 +
$26,085 = + $13,982
d) = $14, $9,437
e) $152,350 = $139,875 +
41,150
24,250
12,103
24,181
12,475

26. Exercise 8

27. a) Cash at bank $ 4,700
Inventory $33,250
Debtors (acc receivable) $13,130
Capital $??,???
Assets = Liabilities + Proprietorship
b) Cash on hand $27,568
Inventory $??,???
Office Furniture $ 8,769
Creditors (acc payable) $15,237
GST Clearing $ 1,200
Capital $32,892
Cash at bank 4700
Inventory
Debtors
Capital ? ,080
Cash on hand 27568
Inventory
Office Furniture 8769
Creditors
GST Clearing 1200
Capital

28. Assets = Liabilities + Proprietorship
c) Inventory $12,356
Motor Vehicles $27,451
Accounts Receivable $ 8,452
Bank $ 2,767
GST Clearing $??,???
Accounts Payable $ 6,325
Capital $40,999
Assets = Liabilities + Proprietorship
Inventory
Motor vehicle
Accounts Receivable
Bank
GST Clearing?
Accounts Payable
Capital

29. d) Cash at bank $ 9,884 Premises $127,360 Sundry debtors $???,???
Sundry creditors $ 13,772
Loan from Citibank $ 90,846
GST Clearing $ 7,623
Capital $ 39,391
Assets = Liabilities + Proprietorship
Cash at Bank
Premises
Sundry Debtors?
Sundry Creditors
Loan from Citibank
GST Clearing
Capital

30. Assets = Liabilities + Proprietorship
e) Petty cash $
Debtors $44,295
Loan to J Brown $??,???
Creditors $57,987
Bank Overdraft $ 4,362
Capital $ 7,549
Assets = Liabilities + Proprietorship
Petty Cash
Debtors
Loan to J Brown?
Creditors
Bank Overdraft
Capital

31. Exercise 9

33. Exercise 10