{"id":220893,"date":"2025-05-29T03:30:31","date_gmt":"2025-05-29T03:30:31","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=220893"},"modified":"2025-05-29T03:30:33","modified_gmt":"2025-05-29T03:30:33","slug":"the-following-transactions-were-carried-out-during-the-month-of-january","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/05\/29\/the-following-transactions-were-carried-out-during-the-month-of-january\/","title":{"rendered":"The following transactions were carried out during the month of January"},"content":{"rendered":"\n

Alhaji Mohammed Garuba started business January 1, 1991 with a capital of N16,000. The following transactions were carried out during the month of January:<\/p>\n\n\n\n

    \n
  1. Purchased furniture by cash N2,400<\/li>\n\n\n\n
  2. Purchased stationery N200 cash<\/li>\n\n\n\n
  3. Purchased goods by cash N3,500<\/li>\n\n\n\n
  4. Purchased goods on credit from Mallam Nagogo N5,000<\/li>\n\n\n\n
  5. Sold goods for cash N6,000<\/li>\n\n\n\n
  6. Sold goods to Charlotte Umedo on credit N2,400<\/li>\n\n\n\n
  7. Paid advertisement expenses N200 cash<\/li>\n\n\n\n
  8. Paid Mallam Nagogo N3,500 cash being part of settlement of goods purchased<\/li>\n\n\n\n
  9. Paid rent in cash N300<\/li>\n\n\n\n
  10. Paid salaries and wages N600 cash.<\/li>\n<\/ol>\n\n\n\n

    Required: You are required to write up ledger Accounts recording the above transactions and extract a Trial Balance.<\/p>\n\n\n\n

    The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n

    Ledger Accounts<\/h3>\n\n\n\n

    Capital Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 1<\/td>Cash<\/td>–<\/td>16,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Cash Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 1<\/td>Capital<\/td>16,000<\/td>–<\/td><\/tr>
    Jan 1<\/td>Furniture<\/td>–<\/td>2,400<\/td><\/tr>
    Jan 1<\/td>Stationery<\/td>–<\/td>200<\/td><\/tr>
    Jan 1<\/td>Purchases<\/td>–<\/td>3,500<\/td><\/tr>
    Jan 15<\/td>Sales<\/td>6,000<\/td>–<\/td><\/tr>
    Jan 20<\/td>Advertisement<\/td>–<\/td>200<\/td><\/tr>
    Jan 25<\/td>Mallam Nagogo<\/td>–<\/td>3,500<\/td><\/tr>
    Jan 28<\/td>Rent<\/td>–<\/td>300<\/td><\/tr>
    Jan 31<\/td>Salaries & Wages<\/td>–<\/td>600<\/td><\/tr>
    Total<\/strong><\/td><\/td>22,000<\/strong><\/td>10,700<\/strong><\/td><\/tr>
    Balance c\/d<\/td><\/td><\/td>11,300<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Furniture Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 1<\/td>Cash<\/td>2,400<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Stationery Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 1<\/td>Cash<\/td>200<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Purchases Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 1<\/td>Cash<\/td>3,500<\/td>–<\/td><\/tr>
    Jan 4<\/td>Mallam Nagogo<\/td>5,000<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Mallam Nagogo Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 25<\/td>Cash<\/td>3,500<\/td>–<\/td><\/tr>
    Jan 4<\/td>Purchases<\/td>–<\/td>5,000<\/td><\/tr>
    Balance c\/d<\/td><\/td><\/td>1,500<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Sales Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 15<\/td>Cash<\/td>–<\/td>6,000<\/td><\/tr>
    Jan 18<\/td>Charlotte Umedo<\/td>–<\/td>2,400<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Charlotte Umedo Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 18<\/td>Sales<\/td>2,400<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Advertisement Expense Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 20<\/td>Cash<\/td>200<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Rent Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 28<\/td>Cash<\/td>300<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Salaries and Wages Account<\/strong><\/p>\n\n\n\n

    Date<\/th>Particulars<\/th>Debit (\u20a6)<\/th>Credit (\u20a6)<\/th><\/tr><\/thead>
    Jan 31<\/td>Cash<\/td>600<\/td>–<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Trial Balance as at 31 January 1991<\/strong><\/h3>\n\n\n\n
    Account<\/th>Dr (\u20a6)<\/th>Cr (\u20a6)<\/th><\/tr><\/thead>
    Cash<\/td>11,300<\/td>–<\/td><\/tr>
    Furniture<\/td>2,400<\/td>–<\/td><\/tr>
    Stationery<\/td>200<\/td>–<\/td><\/tr>
    Purchases<\/td>8,500<\/td>–<\/td><\/tr>
    Advertisement<\/td>200<\/td>–<\/td><\/tr>
    Rent<\/td>300<\/td>–<\/td><\/tr>
    Salaries & Wages<\/td>600<\/td>–<\/td><\/tr>
    Charlotte Umedo (Debtor)<\/td>2,400<\/td>–<\/td><\/tr>
    Mallam Nagogo (Creditor)<\/td>–<\/td>1,500<\/td><\/tr>
    Capital<\/td>–<\/td>16,000<\/td><\/tr>
    Sales<\/td>–<\/td>8,400<\/td><\/tr>
    Total<\/strong><\/td>25,900<\/strong><\/td>25,900<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n\n\n\n

    Explanation<\/strong><\/h3>\n\n\n\n

    The double-entry bookkeeping system is used to record business transactions in ledger accounts, ensuring that every debit has a corresponding credit. The opening capital of \u20a616,000 by Alhaji Mohammed Garuba on January 1st is credited to the Capital Account and debited to the Cash Account, showing the business started with cash. Cash payments for furniture, stationery, and purchases are recorded as debits to respective asset or expense accounts and credits from the Cash Account.<\/p>\n\n\n\n

    Purchases made on credit from Mallam Nagogo are debited to Purchases and credited to the creditor’s account. When part payment of \u20a63,500 is made, it reduces the liability (debit to Mallam Nagogo) and cash (credit to Cash).<\/p>\n\n\n\n

    Sales transactions are treated as revenue: cash sales increase the Cash Account and credit sales increase Accounts Receivable (Charlotte Umedo). The total sales of \u20a68,400 are credited to the Sales Account.<\/p>\n\n\n\n

    Expenses such as advertisement, rent, and salaries are treated as debits to their respective expense accounts and credited to Cash, showing outflows of funds.<\/p>\n\n\n\n

    A trial balance<\/strong> is prepared to check the arithmetical accuracy of ledger entries. It lists all balances to confirm that total debits equal total credits. In this case, both sides of the trial balance match at \u20a625,900, indicating accurate recording.<\/p>\n\n\n\n

    This process provides insight into the business\u2019s financial position and helps in preparing final accounts like the income statement and balance sheet. It demonstrates the importance of systematically tracking transactions to ensure financial integrity and informed decision-making.<\/p>\n\n\n\n

    \"\"<\/figure>\n","protected":false},"excerpt":{"rendered":"

    Alhaji Mohammed Garuba started business January 1, 1991 with a capital of N16,000. The following transactions were carried out during the month of January: Required: You are required to write up ledger Accounts recording the above transactions and extract a Trial Balance. The Correct Answer and Explanation is: Ledger Accounts Capital Account Date Particulars Debit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-220893","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/220893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=220893"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/220893\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=220893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=220893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=220893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}