Question

Preparing a Personal Account
8. From the information given below:
(a) Prepare the account of Mr. Small as it would appear in the books of Mr. Big.
2011
Mar. 1 Debit balance brought forward
3,000
Mar. 7 Mr. Small made credit purchases from Mr. Big
1,500
Mar. 12 Mr. Small returned defective goods
150
Mar. 15 Mr. Small paid on account
Mar 30 Mr. Small repaired the roof of Mr. Big's premises and agreed to adjust the value of this work in his account 530
(b) What does the balance of the account at the end of the month mean?
plz give the correct answer.​

Answer 1

a) journal

in the book of Mr. Small

purchases account. dr. 1500

to Mr. Big. 1500

(being goods purchased on credit)

In the books of Mr. Big

Mr. small

dr. 1500

to sales account. 1500

(being goods sales on credit)

b) The accounting closing balance refers to the amount carried forward to the next accounting period. It is the difference between credits and debits in a ledger at the end of one accounting period that is carried forward to the next.