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Tabular Statements Question
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18-04-2012 7:10pm#1Ok we're doing Tabular Statements now in Accounting (we always do OL q's before starting the HL), and one of the questions says "Paid creditors by cheque, €3000, and received discount of €100."
To answer this do you:
A) Minus 3000 from the Creditors account and add back 100 to the Capital account. Having (€2900) in the totals.
Or
Do you take it that you paid €3100 i.e you take €3100 from the Creditors account (minus) then add back 100 to the Profit and Loss account in Liabilites. Leaving (€3000) in both totals.
My teacher said it's option B but I'm pretty sure for similar q's in the exam papers they follow option A in the marking schemes (plus it makes more sense). The q above is from our book.
Just don't want to be confused before moving on to the HL q's.
Thanks.
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Comments
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kevin12345 wrote: »Ok we're doing Tabular Statements now in Accounting (we always do OL q's before starting the HL), and one of the questions says "Paid creditors by cheque, €3000, and received discount of €100."
To answer this do you:
A) Minus 3000 from the Creditors account and add back 100 to the Capital account. Having (€2900) in the totals.
Or Do you take it that you paid €3100 i.e you take €3100 from the Creditors account (minus) then add back 100 to the Profit and Loss account in Liabilites. Leaving (€3000) in both totals.
My teacher said it's option B but I'm pretty sure for similar q's in the exam papers they follow option A in the marking schemes (plus it makes more sense). The q above is from our book.
Just don't want to be confused before moving on to the HL q's.
Thanks.
Hey, this is how I would do it,
creditors = (3000) as you reduce them by their full amount.
Bank = (2900) as you paid by cheque but received 100 euro discount so only amount. paid.
profit/loss = +100 as you did't have to pay the whole 3000.
That for me would leave (2900) on both pages ( i do mine over 2 A4 pages and bank as a negative asset.)
hope this helps!0 -
ChemHickey wrote: »Hey, this is how I would do it,
creditors = (3000) as you reduce them by their full amount.
Bank = (2900) as you paid by cheque but received 100 euro discount so only amount. paid.
profit/loss = +100 as you did't have to pay the whole 3000.
That for me would leave (2900) on both pages ( i do mine over 2 A4 pages and bank as a negative asset.)
hope this helps!
That's exactly what I would do too. Thanks 0
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