Quote:
4 A stock count is performed at 30th April 2008 by Bruce Richards and values are
given to stock items by Jack Albie. The value of stock at this date is calculated as
$11,234.
Opening Stock of the month was $12,356 so i put this in the journal is this correct!
Dr. Inventory $1122
Cr. Opening Stock $1122
Is "stock" meant to be inventory items for re-sell, or like supplies on hand? Where I'm from we don't call it "stock" in accounting terms, so I don't know. Either way, this entry can't be correct. If this is inventory for re-sell you would have to have more information than this to even do the entry. Since all you have is the beginning balance, it looks like it could be periodic. Can you confirm that? If the value of the inventory is lower at month-end, you need to credit it. A debit to an asset increases the account. Also, the other side of that entry has to be some kind of account that can close to equity - I would call it Income Summary and you'd have some kind of equivalent. But I can't say anymore than that without knowing for sure what this is.
-------
Quote:
5 April’s interest on the BNZ Term Loan at 6.5% per annum is due for payment on
1st May 2008.
Do I have to enter this as its due next month or do I still have to pay for it this month.
Neither. You aren't entering "due next month." You're entering what has accrued this month. The due date is irrelevant unless it falls within the accounting period. And since it's not due this month, you won't be paying it. And paying things has nothing to do with adjusting entries. If you paid something, it's already recorded and you don't adjust it.
Quote:
I worked out that 6.5% of the loan was 10,458 would this be the correct journal?
Dr. Interest Payable $10458
Cr. BNZ Bank Account
That interest amount for one month means you've got an almost 2 million loan. Do remember it's only for one month. This and your last entry are making me think you do not know your normal balances. Payables are liabilities and credit accounts. If it's payable, it increases and you'd have to credit it. Debiting a liability means you're removing it. And you don't mess with the bank account. That's the principal on the loan and has nothing to do with interest. The point of accruing it is to expense the interest. An accrual is something that has been earned or incurred, but the money hasn't exchanged hands yet, which describes accrued interest. So you have an expense incurred.
----------
Quote:
6 Materials for a May job were ordered by Bruce Richards from Mico Wakefield on
30th April and arrived later that day. The invoice however, didn’t come in until the
5th May. The goods were valued at $7,123.
For this would I debit Materials and credit Accounts Payable? Or do nothing as the invoice doesn't come till next month, but will this make assets understated?
First one is correct. The piece of paper is irrelevant to whether the event has occurred or not. You have the materials and have taken legal possession of them, so you have to record them.
------
Quote:
7 Work started on a small job on 28th April. The job wasn’t finished however until
4th May with an invoice going out on 10th May. The value of the work done to 30th
April was $1,658.
Dr. Accrued Revenue $1658
Cr. Construction Revenue $1658
Um, I'd stick it into Receivables, but that works if that's what you were taught to do, since Receivables is generally for accrued revenues. (It's actually receivable whether you've billed it or not.)
