Edexcel IGCSE Accounting: Ledger accounting (4AC1) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 2.3, Ledger accounting, of Topic 2, Introduction to bookkeeping, in the Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1, October 2016. They test the three ledgers and double entry. The specification lists no tiers or paper-only markers for this section. All businesses, people and amounts are invented, and amounts are in dollars.

Links: Edexcel IGCSE Accounting course hub, printable checklist, all free 10-minute diagnostics, the ledger accounting study guide and the revision notes.

Questions

1. (a) Explain the purpose of the receivables ledger. [2] (b) Explain the purpose of the payables ledger. [2]

2. Tariq Textiles keeps a nominal ledger, a receivables ledger and a payables ledger. State the ledger in which each of these accounts is kept: Wages; Rana Stores, a customer who buys on credit; Wazir Weavers, a supplier who sells on credit; Delivery van; Capital. [5]

3. For each transaction of Tariq Textiles, state the account to be debited and the account to be credited. [6]

• (i) A delivery van is bought and paid for by bank.
• (ii) Insurance is paid in cash.
• (iii) Goods are sold on credit to Rana Stores.
• (iv) Faulty goods are returned to Wazir Weavers.
• (v) A loan is received and paid into the business bank account.
• (vi) Rana Stores pays what it owes by cheque, which is banked.

4. Tariq Textiles paid wages of 750 by bank. A trainee debited the Bank account with 750 and credited the Wages account with 750. (a) State the correct double entry. [2] (b) Explain what the trainee’s entries wrongly show. [2]

5. On 1 March, Ghazala Boutique owed Tariq Textiles 2,250. During March: on 6 March Tariq sold goods on credit to Ghazala Boutique for 3,600; on 12 March Ghazala Boutique returned goods worth 450; on 20 March Ghazala Boutique paid 2,250 by bank; on 27 March Tariq sold goods on credit for 1,980. Prepare the account of Ghazala Boutique, balance it at 31 March and bring the balance down. [6]

6. Zafar Cycles had 6,300 in the bank on 1 July. During July: on 3 July the owner paid in a further 15,000 of capital; on 5 July a loan of 20,000 was received into the bank; on 9 July equipment costing 11,500 was bought by bank; on 14 July Dunmore Gym paid 3,750 by bank; on 19 July Kamal Components was paid 4,200 by bank; on 23 July electricity of 640 was paid by bank; on 28 July the owner took 1,500 from the bank as drawings. Prepare, balance and bring down the Bank account for July. [8]

7. Salma Sports had 450 in cash on 1 April. During April: on 8 April cash sales were 1,870; on 11 April cleaning of 120 was paid in cash; on 19 April the owner took 300 in cash for private use; on 26 April 1,500 of cash was paid into the bank. (a) Prepare the Cash account for April, balance it and bring the balance down. [4] (b) Prepare the Drawings account entry for April. [1]

8. Mehr Bakery starts business on 1 September. Its transactions in September are: on 1 September the owner pays 18,000 into the business bank account; on 2 September ovens are bought by bank for 7,500; on 4 September flour is bought on credit from Golden Mills for 3,800; on 7 September goods are sold on credit to Palm Court Hotel for 2,900; on 10 September Golden Mills is paid 2,000 by bank; on 13 September Palm Court Hotel returns goods worth 300; on 17 September Palm Court Hotel pays 1,500 by bank; on 21 September goods worth 400 are returned to Golden Mills; on 26 September rent of 900 is paid by bank. (a) Prepare the Bank account for September, balance it and bring the balance down. [5] (b) Prepare the account of Golden Mills, balance it and bring the balance down. [3] (c) Prepare the account of Palm Court Hotel, balance it and bring the balance down. [3] (d) State the ledger in which the accounts in (b) and (c) are kept. [1]

9. The account of Fiza Florists, a credit customer of Anwar Paints, is shown with one entry missing.

Date	Details (Dr)	Amount	Date	Details (Cr)	Amount
1 Oct	Balance b/d	3,640	14 Oct	Sales returns	520
6 Oct	Sales	5,200	28 Oct	Bank	?
			31 Oct	Balance c/d	4,100

(a) Calculate the amount received from Fiza Florists on 28 October. [3] (b) State what the closing balance of 4,100 shows. [1] (c) Explain two ways in which Anwar Paints can use this account. [2]

10. Salma Sports keeps all its accounts in one ledger. The owner is advised to use separate nominal, receivables and payables ledgers. (a) Explain two benefits to Salma Sports of keeping separate receivables and payables ledgers. [4] (b) State the account debited and the account credited for each transaction: (i) the owner brings her own van into the business; (ii) 1,000 of a loan is repaid by bank; (iii) goods are bought for cash; (iv) a credit customer returns goods. [4] (c) The receivables ledger shows balances of 1,950, 2,730 and 640. The payables ledger shows balances of 3,100 and 1,450. Calculate the total owed to the business by customers and the total the business owes to suppliers. [2]

Answers

1. (a) It holds an account for each credit customer [1] so the business can see how much each customer owes, send statements and chase payment [1]. (b) It holds an account for each credit supplier [1] so the business knows how much it owes each supplier and can plan when to pay [1]. [4] Examiner insight: Say what the ledger holds and why it helps the business.

2. Wages: nominal ledger [1]. Rana Stores: receivables ledger [1]. Wazir Weavers: payables ledger [1]. Delivery van: nominal ledger [1]. Capital: nominal ledger [1]. [5] Examiner insight: Only credit customers and credit suppliers have personal accounts. Everything else is nominal.

3. (i) Debit Delivery van, credit Bank [1]. (ii) Debit Insurance, credit Cash [1]. (iii) Debit Rana Stores, credit Sales [1]. (iv) Debit Wazir Weavers, credit Purchases returns [1]. (v) Debit Bank, credit Loan [1]. (vi) Debit Bank, credit Rana Stores [1]. [6] Examiner insight: Give both accounts for each item. A correct debit with the wrong credit is unlikely to earn the mark for that transaction.

4. (a) Debit Wages 750 [1]. Credit Bank 750 [1]. (b) Debiting Bank wrongly increases the bank balance by 750 although money left the bank [1]. Crediting Wages reduces the expense instead of recording that wages were incurred [1]. [4] Examiner insight: Say what each wrong entry does to the account’s balance. Saying only that they are reversed is weaker.

5. Opening balance 2,250 on the debit side [1]. Both sales, 3,600 and 1,980, on the debit side [1]. Returns of 450 on the credit side [1]. Bank 2,250 on the credit side [1]. Balance c/d 5,130, from 7,830 less 2,700 [1]. Equal totals of 7,830, and Balance b/d of 5,130 on the debit side [1]. [6] Examiner insight: Show the addition behind the balance, so a slip does not hide correct entries and method.

6. Opening balance 6,300 on the debit side [1]. Capital 15,000 and loan 20,000 on the debit side [1]. Dunmore Gym 3,750 on the debit side [1]. Equipment 11,500 on the credit side [1]. Kamal Components 4,200 on the credit side [1]. Electricity 640 and Drawings 1,500 on the credit side [1]. Balance c/d 27,210, from 45,050 less 17,840 [1]. Equal totals of 45,050 and Balance b/d of 27,210 on the debit side [1]. [8] Examiner insight: Bank is an asset, so money received goes on the debit side. Naming the other account in each entry shows the double entry.

7. (a) Opening balance 450 and sales 1,870 on the debit side [1]. Cleaning 120, Drawings 300 and Bank 1,500 on the credit side [1]. Balance c/d 400, from 2,320 less 1,920 [1]. Equal totals of 2,320 and Balance b/d of 400 on the debit side [1]. (b) Drawings account: debit side, 19 April, Cash, 300 [1]. [5] Examiner insight: Cash paid into the bank is a credit in Cash. Bank receives the matching debit.

8. (a) Capital 18,000 on the debit side [1]. Palm Court Hotel 1,500 on the debit side [1]. Equipment 7,500, Golden Mills 2,000 and Rent 900 on the credit side [1]. Balance c/d 9,100, from 19,500 less 10,400 [1]. Equal totals of 19,500 and Balance b/d of 9,100 on the debit side [1]. (b) Purchases 3,800 on the credit side [1]. Bank 2,000 and Purchases returns 400 on the debit side [1]. Balance c/d 1,400 and Balance b/d of 1,400 on the credit side [1]. (c) Sales 2,900 on the debit side [1]. Sales returns 300 and Bank 1,500 on the credit side [1]. Balance c/d 1,100 and Balance b/d of 1,100 on the debit side [1]. (d) Golden Mills is in the payables ledger and Palm Court Hotel is in the receivables ledger [1]. [12] Examiner insight: In an extended record, tick each transaction off as you post it, to avoid omissions and double posting.

9. (a) Total of the debit side is 3,640 plus 5,200, which is 8,840 [1]. The credit side must also total 8,840, so the receipt is 8,840 less 520 less 4,100 [1]. The amount received is 4,220 [1]. (b) Fiza Florists owed 4,100 to Anwar Paints at 31 October [1]. (c) It shows how much Fiza Florists owes, so a statement can be sent or payment chased [1]. It lists the sales, returns and payments behind the balance, which helps settle a disagreement [1]. [6] Examiner insight: For a missing figure, use equal totals on the two sides and show that step.

10. (a) The business can see how much each customer owes [1], so it can chase late payers and send statements [1]. The business can see how much it owes each supplier [1], so it can plan payments and avoid missing due dates [1]. (b) (i) Debit Vehicles, credit Capital [1]. (ii) Debit Loan, credit Bank [1]. (iii) Debit Purchases, credit Cash [1]. (iv) Debit Sales returns, credit the customer [1]. (c) Total owed by customers is 1,950 plus 2,730 plus 640, which is 5,320 [1]. Total owed to suppliers is 3,100 plus 1,450, which is 4,550 [1]. [10] Examiner insight: Link each feature of the ledger to what the business can do with it.

Where marks are usually lost

• Choosing the wrong side without first classifying the account.
• Writing the name of the account being written in, rather than the other account, in the details column.
• Reversing customer and supplier sides.
• Crediting receipts to Bank or Cash.
• Leaving out the second entry, or posting one twice.
• Balance c/d put on the same side as the larger total, or Balance b/d missing.
• Defining a ledger without saying why a business uses it.

Next steps

Use the revision notes, the study guide, tick off the checklist, explore the course hub and try the free 10-minute diagnostics. Book a free trial class.

Frequently asked questions

How do you record a credit sale in the ledger? Debit the customer’s account in the receivables ledger, because the customer now owes the business, and credit the sales account. When the customer pays, debit bank or cash and credit the customer.

How do you record a credit purchase from a supplier? Debit purchases, which is an expense, and credit the supplier’s account in the payables ledger, because the business owes the supplier. A payment to the supplier debits the supplier and credits bank.

Why are receipts of money debited to the bank account? Bank and cash are assets, so money coming in increases them and is a debit, while money going out is a credit. Crediting receipts to bank or cash is a common error in Edexcel IGCSE Accounting (4AC1) questions.

How should you explain the purpose of a ledger? Say what the ledger holds and why a business uses it, for example that the receivables ledger shows how much each customer owes so the business can chase payment. A definition with no reason loses marks.

Official syllabus

Pearson Edexcel International GCSE in Accounting (4AC1) specification, Issue 1, October 2016, published by Pearson Education Limited – Topic 2 Introduction to bookkeeping, section 2.3 Ledger accounting, points 2.3a and 2.3b.