Sources and Recording of Data 2

On Your Marks
Sources and recording of data 2

This activity will help you to analyse examination-style questions and answers. You will look
at two different questions in this worksheet.
 You will look at the question and see a teacher’s comments about how to answer it.
The coloured highlighting in the comments refers back to the coloured highlighting
in the question.
 You will then look at a model answer with further teacher comments that will help
you to improve your skills. The coloured highlighting in the comments refers back to
the coloured highlighting in the model answer.
© Oxford University Press 2018

1
Question 1
Analyse the question: What do you need to do to answer this question successfully? Read
the teacher’s advice.
Wen is an electrical wholesaler. He sells goods on credit on a monthly basis. During October
he issued the following sales invoices to customers:
Date Invoice Transaction

number
Oct 3 733 Aye Moe: 40 kettles at $80 each, less 30%
trade discount
7 743 Chan Ma: 8 microwave ovens at $240 each,
less 20% trade discount
15 735 Hay Man: 24 irons at $65 each, less 15% trade
discount
24 736 Chan Ma: 30 toasters at $72 each, less 20%
trade discount
a) Calculate the amount charged for each sale. Comments

Show your working. (12 marks)
Trade discount is deducted on the invoice.
b) Prepare the sales journal for the month of
October. (5 marks) Remember that the amount of the trade
discount is not recorded in the accounting
c) Record the entries in the sales ledger and the system. Only the net amount after
nominal ledger. (5 marks) deducting trade discount is recorded in the
sales journal.
d) State three reasons for giving trade discount.
(3 marks)
(25 marks)

2
Study the answer: Read the answers below. Then read the comments regarding the
highlighted sections to see the teacher’s comments.
a)
$
Oct 3 40 x $80 = 3 200
Less 30% trade discount (960)
2 240
Oct 7 8 x $240 = 1 920

1 536
Oct 15 24 x $65 = 1 560

1326
Oct 24 8 x $240 = 1 920

1 536
b)
Sales journal
Date Customer Invoice No. $
Oct 3 Aye Moe 733 2 240
7 Chan Ma 734 1 536
15 Hay Man 735 1 326
24 Chan Ma 736 1 728
Total sales 6 830
c)
Sales ledger
Dr Aye Moe Cr
Oct 3 Sales 2 240
Dr Chan Ma Cr
Oct 7 Sales 1 536
24 1 728
Dr Hay Man Cr
Oct 15 Sales 1 326
General ledger
Dr Sales account Cr
Oct 31 Sales journal 6 830

3
d) Trade discount is given:
 for bulk buying

 for regular custom
 to encourage/increase sales.
Comments
Show your working in full and give the figures labels where possible.
Make sure you record the total sales in the sales journal.
Give each transaction a date.
Trade discount is only offered to other businesses engaged in the same line of business and is
not normally available to private individuals.

4
Question 2
Analyse the question: What do you need to do to answer this question successfully? Read
the teacher’s advice.
Carol Jones keeps a three-column cash book. On 1 November Carol’s cash book showed these
balances: cash $350, bank $6250.
The following transactions occurred during November:
Date Transaction
Nov 2 Cash sales $954
3 Cheque paid to Matt Davis in full settlement of the amount owed $1200, less
2% cash discount
5 General expenses paid in cash $120
8 Cheque received from Tony King in full settlement of the amount owed $1800,
less 3% cash discount
12 Cash sales $835
14 Transferred cash into bank $1000
16 Wages paid in cash $530
21 Payment by cheque to K Williams in full settlement of his account $760, less
2.5% cash discount
23 Cash taken by Carol Jones for private use $75
26 Bought equipment $4800 and paid by cheque
28 Cheque received from Richard Green in full settlement of his account $1400,
less 3% cash discount
Prepare at 28 November: Comments
a) The three-column cash book. Balance the cash book and total Each entry in the cash
the discount columns. (23 marks) book must have a date.
Carry down the closing
b) Post the entries to the: balances on the cash
i) personal accounts in the purchases ledger
account and the bank
ii) personal accounts in the sales ledger
iii) totals of the discounts columns in the nominal ledger. account.
(10 marks) The entries in the ledgers

must have a date.
c) State the source documents which would be used for the
transactions on:
i) Nov 2
ii) Nov 3
iii) Nov 5
iv) Nov 8
v) Nov 14
(5 marks)
d) State two reasons for giving cash discount. (2 marks)
© (40
Oxford University Press 2016
marks)
5
Study the answer: Read the answers below. Then read the comments regarding the
highlighted sections to see the teacher’s comments.
a)
Dr Cash book Cr
Dis Cash Bank Dis Cash Bank
alld recd
$ $ $ $ $ $
Nov 1 Balances 350 6 250 Nov 3 Matt Davis 24 1 176
b/d
2 Sales 954 5 General exp 120
8 Tony King 54 1 746 14 Bank (C) 1 000
12 Sales 835 16 Wages 530
14 Cash 1 000 21 K Williams 19 741
(C)
28 R Green 42 1 358 23 Drawings 75
26 Equipment 4 800
28 Balances c/d 414 3 637
96 2 139 10 354 43 2 139 10 354
Dec 1 Balances 414 3 637

b/d
b)
i)
Purchases ledger
Dr Matt Davis Cr
Nov 3 Bank 1 176
Discount received 24
Dr K Williams Cr
Nov 21 Bank 741
Discount received 19
ii)
Sales ledger
Dr Tony King Cr
Nov 8 Bank 1 746
Discount 54
allowed
Dr Richard Green Cr
Nov 28 Bank 1 358
Discount 42
allowed

6
Nominal ledger
Dr Discount allowed Cr
Nov 28 Cash book 96
Dr Discount received Cr
Nov 28 Cash book 43
c)
i) Nov 2: Till roll
ii) Nov 3: Cheque counterfoil
iii) Nov 5: Cash receipt
iv) Nov 8: Paying-in slip counterfoil
v) Nov 14: Paying-in slip counterfoil
d) Cash discount is given:
 to encourage prompt payment

 to encourage payment of monthly accounts within an agreed time limit.
Comments
The discount columns – discounts allowed and discounts received – are not accounts. They are
memorandum columns and have to be totalled, not balanced.
The closing balances have to be carried down.
Give each transaction a date.
Only the totals of the discount columns are posted to the ledger. The individual amounts are
posted to the personal accounts in the purchases and sales ledgers.

7

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On Your Marks

Sources and recording of data 2

© Oxford University Press 2018

Date Invoice Transaction

a) Calculate the amount charged for each sale. Comments

© Oxford University Press 2018

Oct 7 8 x $240 = 1 920

Oct 15 24 x $65 = 1 560

Oct 24 8 x $240 = 1 920

© Oxford University Press 2018

 for bulk buying

Give each transaction a date.

© Oxford University Press 2018

The following transactions occurred during November:

Prepare at 28 November: Comments

(10 marks) The entries in the ledgers

d) State two reasons for giving cash discount. (2 marks)

Dec 1 Balances 414 3 637

© Oxford University Press 2018

Nov 28 Cash book 43

i) Nov 2: Till roll

ii) Nov 3: Cheque counterfoil

iii) Nov 5: Cash receipt

iv) Nov 8: Paying-in slip counterfoil

v) Nov 14: Paying-in slip counterfoil

d) Cash discount is given:

 to encourage prompt payment

The closing balances have to be carried down.

Give each transaction a date.

© Oxford University Press 2018

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