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Hong Kong True Light College

To. Hong Kong True Light College. PRINCIPLES OF ACCOUNTS. By Irene Lui. CASH. Hi! ^.^. BOOK. Introduction. Example. Exercise's Answer. Exercise. Cash Book Book of original entry for cash and bank receipts and payments. Discount Allowed A reduction given to customers

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Hong Kong True Light College

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  1. To Hong Kong True Light College

  2. PRINCIPLES OF ACCOUNTS By Irene Lui

  3. CASH Hi! ^.^ BOOK

  4. Introduction Example Exercise's Answer Exercise

  5. Cash Book Book of original entry for cash and bank receipts and payments.

  6. Discount Allowed A reduction given to customers who pay their accounts within the time allowed.

  7. Discount Received A reduction given to us by a supplier when we pay his account within the time allowed.

  8. A Worked Example The following is an example of a three-column cash book for the whole Of a month, showing the ultimate transfer of the totals of the discount Columns to the discount accounts. 1995 $ May 1 Cash balance brought down from April 29.00 May 1 Bank balance brought down from April 654.00 May 1 Debtors account : M. Sing 40.00 May 1 Creditors account: S. Long 100.00 May 8 We pay S. Long his account by cheque, deducting 5% cash discount $5. 95.00 May25 We pay wages in cash. 92.00 May28 M. Sing pays us in cash after having deducted 5% cash discount $2. 38.00

  9. Example's Answer (page64) May1 Bal.b/d 29 654 May8 S.Long PL58 5 95 May11 Bank C 100 May11 Cash C 100 May28 M.Sing SL91 2 38 May25 Wages GL77 92 May31 Bal.c/d 75 459 2 167 654 5 167 654 Jun1 Bal.b/d 75 459 Double Entry

  10. Purchases Ledger (page 58) May8 Bank CB64 95 May1 Bal.b/d 100 May8 Discount CB64 5 100 100 Sales Ledger (page 91) May28 May1 Bal.b/d 40 Cash 38 Discount 2 May28 40 40

  11. General Ledger (page 77) May25 Cash CB64 92 (page 88) May31 Total for the month CB64 5 CB64 2 May31 Total for the month

  12. Exercise Enter up a three-column cash book from the following details. Balance off at the end of the month, and show the discount as they would appear in the general ledger. 1997 May 1 Started business with $6000 in the bank. May 1 Bought fixtures paying by cheque $950. May 3 Cash sales $407. May 5 S. Man paid us his account of $220 by a cheque for $210, we allowed him $10 discount. May 7 Paid K. Tong $80 owing to him by means of a cheque $76, he allowed us $4 discount. May12 Paid rates by cheque $410. May16 Paid W. Man his account of $120 by cash $114, having deducted $6 cash discount. May20 T. Lee paid us a cheque for $78, having deducted $2 cash discount. May31 Cash sales paid direct into the bank $88.

  13. Answer

  14. THE END Bye!! C Irene Lui

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