Question 4 (5 marks)

Outline five (5) reasons for the discrepancy between the cash book and the bank statement.

XYZ Ltd commenced business on 1st January 2014. On that day, XYZ Ltd bought equipment on credit from CCC Ltd equipment Ltd at P85 000. The equipment will be used for 5 years and the estimated value at the end of the 5 years is P25, 000. Calculate the depreciation for the equipment at 10% for the first three years using the reducing balance method.

Question 5 (10 marks)

Indicate the accounts to be debited and credited in each of the following transactions.

e. Lorato started business with P100,000 cash.

f. P80,000 cash was banked.

g. Bought motor vehicle paying by cheque P20,000.

h. Paid rent P10,000 cheque.

i. Cash Sales P5,000.