{"id":158,"date":"2016-07-13T13:50:00","date_gmt":"2016-07-13T12:50:00","guid":{"rendered":"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/13\/an-intermediate-level-test-on-your-double-entry\/"},"modified":"2016-07-13T13:50:00","modified_gmt":"2016-07-13T12:50:00","slug":"an-intermediate-level-test-on-your-double-entry","status":"publish","type":"post","link":"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/an-intermediate-level-test-on-your-double-entry\/","title":{"rendered":"AN INTERMEDIATE LEVEL TEST ON YOUR DOUBLE ENTRY"},"content":{"rendered":"
\nScenario:<\/span><\/b><\/div>\n
\n<\/a>On
\n20th<\/sup> April 20XX, Jemm Ltd bought a machine for \u00a330,000 net for
\ncompany use and paid VAT on the purchase and half of the total amount was paid
\nthrough the bank account immediately and the balance will be paid at the end of
\nnext month. What will be the double entry posting for this across the two
\nperiods?<\/o:p><\/span><\/div>\n
\n<\/div>\n
\n<\/div>\n
\n1. Double entry
\nposting:<\/o:p><\/span><\/b><\/div>\n
\n20\/04\/XX<\/o:p><\/span><\/b><\/div>\n
\nDR:
\nMachine account                     \u00a330,000<\/o:p><\/span><\/div>\n
\nDR:
\nVAT account                            \u00a36,000<\/o:p><\/span><\/div>\n
\nCR:
\nBank account                           \u00a318,000<\/o:p><\/span><\/div>\n
\nCR:
\nPLCA                                       \u00a318,000<\/span><\/div>\n
\n<\/div>\n
\nReason:<\/o:p><\/span><\/b><\/div>\n
\nThe
\nmachine account has been debited because machines are increasing and if an
\nasset is increasing we debit the relevant asset account and we have debited VAT
\naccount with 20% of \u00a330000; because VAT on purchases is an asset which can be
\nclaimed back from HMRC and the amount to be claimed back is obviously
\nincreasing due to this additional purchase. <\/o:p><\/span><\/div>\n
\n<\/div>\n
\nWe
\nhave credited bank with half of the total amount because bank account is paying
\nout only \u00a318,000 now and the balance in the bank account is reducing; if an
\nasset is decreasing, we credit the relevant asset account.<\/span> <\/span><\/div>\n
\n<\/div>\n
\n2. Double entry
\nposting:<\/o:p><\/span><\/b><\/div>\n
\n31\/05\/XX<\/o:p><\/span><\/b><\/div>\n
\nDR:
\nPLCA                           \u00a318,000<\/o:p><\/span><\/div>\n
\nCR:
\nBank account               \u00a318,000<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nReason:<\/o:p><\/span><\/b><\/div>\n
\nThe
\nPLCA is being debited because a liability being owed has now been paid, so the
\ncreditors balance is reducing and if a liability is reducing we debit. We have
\ncredited bank because bank account is now paying out the outstanding balance of
\n\u00a318,000 and the balance in the bank account is reducing; if an asset is
\ndecreasing, we credit the relevant asset account.<\/o:p><\/span><\/div>\n
\n<\/div>\n
\nREMEMBER:<\/o:p><\/span><\/div>\n
\nDEAD\/CLIC<\/o:p><\/span><\/b><\/div>\n
\n
<\/span><\/b><\/div>\n
\nYours Sincerely,<\/span>
The Friendly Team<\/span>

<\/span><\/div>\n
\nThe Training Place of Excellence Limited<\/span><\/div>\n

<\/p>\n

\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Scenario: On 20th April 20XX, Jemm Ltd bought a machine for \u00a330,000 net for company use and paid VAT on the purchase and half of the total amount was paid through the bank account immediately and the balance will be paid at the end of next month. What will be the double entry posting for … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-158","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"yoast_head":"\nAN INTERMEDIATE LEVEL TEST ON YOUR DOUBLE ENTRY - The Training Place Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thetrainingplace.org\/blog\/2016\/07\/an-intermediate-level-test-on-your-double-entry\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AN INTERMEDIATE LEVEL TEST ON YOUR DOUBLE ENTRY - The Training Place Blog\" \/>\n<meta property=\"og:description\" content=\"Scenario: On 20th April 20XX, Jemm Ltd bought a machine for \u00a330,000 net for company use and paid VAT on the purchase and half of the total amount was paid through the bank account immediately and the balance will be paid at the end of next month. What will be the double entry posting for ... 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