Question 2 Data to answer Q3

Date	Details	Debit ($)	Credit ($)
2 November	I.T. Expense	4 000
	Cash at Bank		500
	Accounts Payable		3 500
	(Upgrade of webpage functionality and layout)
10 November	Equipment	2 895
	Cash at Bank		2 895
	(business purchased speakers for the shop)
16 November	Cash at Bank	285
	Equipment		285
	(Sold old sewing machine for cash)
21 November	Sewing Mannequin	395
	Capital		395
	(Sahra contributed a sewing mannequin from her home to the business)
26 November	Accounts Payable	3 897
	Cash at Bank		3 897
	(Paid for supplies purchased in October)
30 November	Cash at Bank	1 200
	Beachwear Sales		1 200
	(Sales of beachwear at local surfing event)

Question 3

REQUIRED:

Please write a letter in your own words, using the Harvard** referencing system wherever appropriate addressing the queries raised by Sahra Ong (the client).

Sahra Ong has written to the Managing Partner of the accounting firm you work for as a graduate accountant because she is confused about a journal entry she prepared on the 16th November (see question 2). When Sahra discussed this transaction with her friend Jed Skee, he told her that she should credit the account Equipment but she does not know why as she only thought you should debit the account Equipment and she is a bit embarrassed to ask her friend to explain.

• Explain with reference to the appropriate accounting definition the accounting element* that was credited on the 16th of November. Ensure you also explain why the account was credited. (4 marks)
• Jed Skee was asking her what form or structure her business Vacation is. Sahra is not entirely sure. Please advise Sahra of the main three forms or structures of business as described in Accounting for Business and which one Vacation is and why. (4 marks)