2.1 The double entry system of book-keeping (3)

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1.

A business is in the process of recording its financial transactions. Explain the purpose of the division of the ledger into the Sales Ledger, the Purchases Ledger, and the Nominal (General) Ledger. For each ledger type, state the type of transactions that are recorded.

2.

Question 1

On 1st January 2023, ABC Ltd purchased equipment for £5,000 in cash. On 15th January 2023, the equipment was sold for £6,000. Record the transactions in the ledger using the double-entry system.

3.

Question 2

The following transactions occurred at XYZ Ltd during the month of February 2023:

  • 1st February: Received £2,000 from a customer for goods supplied on credit.
  • 10th February: Paid £300 for office supplies in cash.
  • 20th February: Received £1,500 from a customer for goods supplied on credit.
  • 25th February: Paid £500 to a supplier for goods purchased on credit.
Record these transactions in the ledger using the double-entry system.