Question
Oakhaven Rentals keeps its Cash account in running-balance format. On June 1, 2025 the account had an opening balance of $5,000 (debit).
| Date | Event |
|---|
| June 3 | Received $4,200 rent from tenants (Rent Revenue). |
| June 10 | Paid $2,600 in salaries (Salaries Expense). |
| June 18 | Paid $800 for utilities (Utilities Expense). |
| June 25 | Received $3,500 rent from tenants (Rent Revenue). |
Required: Using the Running Balance format, post the opening balance and the four June events to the Cash account, then balance it off on June 30, 2025. Name each posting after the other account involved.
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