Question
Maple Street Bakery keeps its Cash at Bank account in running-balance format. On March 1, 2025 the account had an opening balance of $4,000 (debit).
The following cash transactions took place during March 2025:
- Mar 3 — Cash sales banked, $2,500 (folio CB1)
- Mar 8 — Paid shop rent, $900 (folio CB2)
- Mar 14 — Bought a display oven for cash, $1,800 (folio CB3)
- Mar 21 — Cash sales banked, $3,200 (folio CB4)
- Mar 27 — Paid electricity bill, $450 (folio CB5)
Required: Post the opening balance and all five transactions to the Cash account (dates in DD/MM/YYYY format), then balance the account off on 31/03/2025. Name each posting after the other account involved (e.g. "Sales Revenue").
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 1 — Presentation of Financial Statements
Work the cycle in its fixed order: journalise, post to the ledger, extract an unadjusted trial balance, pass adjusting entries, extract an adjusted trial balance, prepare the statements, then close the temporary accounts. Each step consumes the output of the one before it, so an error early on propagates all the way to the closing entries rather than staying local.
Common mistakes
- Preparing the financial statements from the unadjusted trial balance instead of the adjusted one.
- Closing permanent accounts — assets, liabilities and capital carry forward; only revenue, expense and drawings/dividends close.
- Forgetting that the post-closing trial balance should contain no income statement accounts at all.
Further readingIAS 1: what goes where in a full set of statements