Question
Oakview Tutoring keeps its Cash account in the classic two-sided T-account format. On June 1, 2025 the account had an opening balance of $5,000 (debit). The following cash transactions took place during June.
| Date | Transaction |
|---|
| June 5 | Paid office rent for the month, $1,500. |
| June 8 | Received cash for tutoring services provided, $3,200. |
| June 15 | Purchased equipment for cash, $2,400. |
| June 20 | Collected $1,800 from customers who had been billed earlier. |
| June 27 | Paid assistants’ salaries, $1,900. |
Required: Using the T-Account format, post the opening balance (Balance b/d) and all five transactions to the Cash account, then balance the account off on June 30, 2025 (Balance c/d). Name each posting after the other account involved (e.g. "Service 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