Question

1. Identify the errors, if any, in the journal entries for the given transactions. If there is no error write no error. 2 marks for the each entry.

1. Started business with capital of AED 100,000

	Capital		100,000
	Cash			100,000
	Capital invested

Space for the correct entry

2. Paid salaries to Mr Ali AED 5,000

	Salaries		5,000
	Ali’s account			5,000
	Salary paid to Ali

3. Received Fees from clients AED 10,000

	Cash		10,000
	Client			10,000

4. Received a loan of AED 50,000 from bank

	Loan account		50,000
	Bank			50,000

2. You are given the following Journal entries of a firm for a period. Prepare cash account. 1 marks each

1/1/16	Cash		60,000
	Bank			60,000
	Cash withdrawn from bank

3/1/16	Rent		5,000
	Cash			5,000

9/1/16	Land		20,000
	Cash			20,000
	Land purchased

Answer 1

a	Started business with capital of AED 100000
	Error
	Correct JE
	Cash A/c….Dr	100000
	To Capital A/c….Cr	100000
a	Paid salary to Mr. Ali AED 5000
	Error
	Correct JE
	Salary A/c….Dr	5000
	To Cash A/c…Cr		5000
a	Received fees from clients AED 10000
	No Error
a	Received a loan of AED 50000 from bank
	Error
	Correct JE
	bank A/c….dr	50000
	To Loan A/c…..Cr	50000
	Cash Account
Dr					Cr
Date	Particulars	Amount	Date	Particulars	Amount
1.1.16	To bank	60000	3.1.16	By Rent	5000
			9.1.16	By Land purchased	20000
				By balance c/d	35000
	Total	60000		Total	60000