Check over each of the transactions described in sections 7.4.1 to 7.4.12. Make sure you understand each one. Using a pencil, tick each entry in Table 7.3 to check that you have understood the entry for each transaction.

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7.4.1 Acquisition of inventory: direct materials In purchasing the rolls of paper, the business acquires an asset, shown by a debit entry in the ledger account for materials inventory. In taking credit from the supplier it incurs a liability, shown by a credit entry in the ledger account for a trade creditor. 7.4.2 1 June Materials inventory Trade creditor Dr 180,000 Cr 180,000 Acquisition of inventory: indirect materials In purchasing the inks, glue and dyes, the business acquires a further asset, shown by a debit entry in the ledger account for materials inventory. In exchange, the asset of cash has diminished, shown by a credit entry in the cash account. 1 June Materials inventory Cash Dr 25,000 Cr 25,000