IMPORTANT

FORMATS FOR
O LEVEL/IGCSE
ACCOUNTING

7707/0452
By Ms Shayan Shakoor
rapidrevisionwithshayan
0331-2273562
 Other payables and Other receivables

Expense
Date Details $ Date Details $
1st Jan Prepaid b/d X 1st Jan
Owing b/d X
2023 2023

Bank X 31st Dec Income Statement X

2023
Cash X

31st Dec Owing c/d 31st Dec Prepaid c/d X

X
2023 2023

X X

1st Jan Prepaid b/d X 1st Jan Owing b/d X

2024 2024

• Note: Account title will be the expense in the question. Example, Rent payable, Insurance,
Advertising expenses and so on
• The Rule for expense account is POOP
• There can be multiple payments by means of a cheque, Direct debit or Standing order or
Credit transfer or cash. So ALL payments during the year must be recorded on the debit
side.
 Income
Date Details $ Date Details $
1st Jan Owing b/d X 1st Jan Prepaid b/d X
2023 2023

31st Dec Income Statement X Bank X

2023
Cash X

31st Dec Prepaid c/d X 31st Dec Owing c/d X

2023 2023

X X
1st Jan Owing b/d X 1st Jan Prepaid b/d X
2024 2024

• Note: Account title will be the income in the question. Example, Rent receivable, commission
income , Advertising income and so on.
• The Rule for income account is OPPO
• There can be multiple receipts of income by cheque or credit transfer or cash.
 Irrecoverable debts and provision for
doubtful debts

Irrecoverable debts

Date Details $ Date Details $

Mr A X 31st Dec Income statement X
Mr B X 2023

X X

• Mr A and Mr B are both unable to pay the business hence, we record their amounts in the
irrecoverable debts expense account, whereas their own accounts will be credited. At the
end of the year the total irrecoverable debts will be transferred to the income statement.

• The date for writing off the debt will be according to the question.

$ $
Dr Cr
Journal entry to write off an irrecoverable debt

Irrecoverable debts X

Mr A X

Irrecoverable debts X

Mr B X
 Provision for doubtful debts
Date Details $ Date Details $

31st Dec Balance c/d X 31st Dec Income statement X

2021 2021

X X

31st Dec Balance c/d 1st Jan

X Balance b/d X
2022 2022
31st Dec Income statement X
2022

X X

31st Dec 1st Jan Balance b/d

Income statement X X
2023 2023
31st Dec Balance c/d X
2023

X X

1st Jan Balance b/d X

2024

• 2021 is the year of creation for provision for doubtful debts

• In 2022 the provision increases
• In 2023 the provision decreases
 $ $
Dr Cr
Journal entry for creation of provision/ increase
in provision

Income statement X

X
Provision for doubtful debts

Journal entry for reduction in provision

Provision for doubtful debts X

Income statement X
 Depreciation and Disposals of Non current Assets
Three important T Accounts

Non current Asset

Date Details $ Date Details $
1st Jan Balance b/d X Disposal X
2023
Bank X
Cash X

Mr Chai X 31st Dec Balance c/d X

2023

X X

1st Jan Balance b/d X

2024

• Note: The account title differs from question to question. For example in some cases it will be
motor vehicle, or it can be fixtures and fittings, machinery, computer or office equipment.

• The bank represents non current asset bought and paid for by cheque, direct debit, credit
transfer.

• The cash represents the cost of non current asset bought and paid for by cash.

• Mr Chai is the one from whom the business has bought a non current asset on credit.

• ALL values in this account are cost. Hence the value for disposal will also be the original cost of
the non current asset.

• Disposal date will be the date when the asset was disposed off.
 Provision for depreciation - Non current Asset
Date Details $ Date Details $
Disposal 1st Jan Balance b/d
X X
2023
31st Dec Balance c/d X 31st Dec Income Statement X
2023 2023

X X
1st Jan Balance b/d X
2024

• Provision is a contra asset account, and contra means opposite. It works on opposite rules. It
increases on the credit side and decreases on the debit side
• Balance b/d represents the accumulated (total) depreciation charged on all the assets lets say motor
vehicles at the start of the year. This is basically depreciation charged in the previous years.
• Income statement represents depreciation charge for the current year.
• Disposal represents the accumulated (total) depreciation charged on the disposed off asset.

Disposal
Date Details $ Date Details $
Non current asset X Provision for depreciation X
Bank/cash/ Mr coffee X

Income statement X
X X

• Income statement acts as a balancing figure in this account

• In case of loss, income statement itself is debited, hence income statement will come on the credit
side.
• In case of profit, income statement itself is credited, hence income statement will come on the debit
side of the disposal account.
 • Notice that Non Current asset was credited with disposal and disposal is debited with non current
asset.

• Provision for depreciation was debited with disposal hence disposal is credited with provision.

• Bank or cash is coming in the business when the asset is disposed off. Hence bank/ cash is being
debited. Also disposal will be credited with bank/ cash.

• If the business sells the asset to Mr coffee on credit, Mr coffee would become a receivable also will
be debited and disposal will be credited.

Journal Entries for disposal

$ $

Dr Cr
1) To remove the cost of asset from the books of the business
Disposal X

Non current asset X

2) To remove accumulated depreciation of the disposed off asset

Provision for depreciation X

Disposal X

3) To record the money received in the form of a cheque/

cash. Or a receivable from Mr coffee

Bank/ Cash/ Mr coffee X

Disposal X

4) To record loss on disposal

Income statement X
Disposal X
 $ $
Dr Cr
OR to record profit on disposal

Disposal X

Income statement X

Control Accounts

Sales ledger control account

Date Details $ Date Details $

1st Jan Balance b/d X 1st Jan

Balance b/d (minority) X
2023 2023
Sales X Sales returns X

Interest X Bank X
(charged on overdue accounts)
Cash X
Bank (dishonoured cheque) X
Discount allowed X
Bank (refund) X
Debts recovered X X
Irrecoverable debts
Bank (debts recovered) X

Contra X
31st Jan 31st Jan Balance c/d
2023 Balance c/d (minority) X X
2023

X X

1st Feb Balance b/d 1st Feb X

X Balance b/d (minority)
2023 2023
• The sales ledger control account is also known as the total of trade receivables account.
• Anything that increases trade receivables appears on the debit side
• Anything that decreases trade receivables appears on the credit side
• Only and only credit sales are recorded here and cash sales are not recorded here. Cash sales won’t
create trade receivables.
• Provision for doubtful debts has nothing to do with sales ledger control account
• Bank represents receipts from credit customers in the form of cheques or credit transfers
• Cash represents receipts from credit customers in the form of cash

Purchases ledger control Account

Date Details $ Date Details $

1st Jan Balance b/d (minority) X 1st Jan Balance b/d X

2023 2023
Purchases Returns X Purchases X
Bank X Interest (charged on X
overdue accounts)
Cash
X
Bank (refund) X
Discount Received X
Contra X
31st Jan Balance c/d X 31st Jan Balance c/d (minority) X
2023 2023

X X

1st Feb Balance b/d (minority) X 1st Feb Balance b/d X

2023 2023
• Purchases ledger control account is a total of trade payables account
• Anything that increases trade payables comes on credit side
• Anything that decreases trade payables comes on the debit side
• Only and only credit purchases will come in the purchases ledger control account
• Bank represents payments by cheque or bank transfers to credit suppliers
• Cash represents payments by cash to credit suppliers

Where does the information for the sales ledger control account come from?

The information comes from the Books of original entry.

• Sales (credit) - sales journal

• Bank (receipts) - cash book
• Cash (receipts) - cash book
• Discount allowed - cash book
• Sales returns - sales returns journal
• Dishonoured cheques - cash book
• Bank (refund) - cash book
• Interest - general journal
• Contra - general journal
• Irrecoverable debts - general journal
• Debts recovered - general journal
• Bank (debts recovered) - cash book

Where does the information for the purchases ledger control account come from?

The information comes from Books of original entry.

• Purchases (credit) - purchases journal

• Bank (payments) - cash book
• Cash (payments) - cash book
• Purchases returns - purchases returns journal
• Discount received - cash book
• Interest - general journal
• Bank (refund) - cash book
• Contra - general journal

Reasons for minority balance in control accounts

• Overpayment
• Payment in advance
• Returns after payment
 Financial Statements of a sole trader

ABC
Income statement for the year ended______

$ $
Revenue
X
Less: Sales Returns (X)

Net sales X

Less: Cost of sales

Opening Inventory X

Add: Purchases X

Add: Carriage Inwards X

Less: Purchases Returns (X)
Less: Drawings of goods (X)

Less: Closing Inventory (X) (X)

GROSS PROFIT X

Add: Incomes

Discount Received X

Rent Received X

Commission Received X

Debts Recovered X

Reduction in provision X
 $ $
Profit on disposal X X

X
Less: Expenses

Rent Expense X

Wages and Salaries X

Insurance X
Heat and Light X
Motor Expenses X
Rates X
Discount allowed X
General Expenses X
Commission expense X
Advertising expense X

Sundry expenses X

Carriage outwards X

Irrecoverable debts X

Administrative expenses X

Distribution expenses X

Depreciation- Premises X

Depreciation- Buildings X
Depreciation- Motor Vehicles X

Depreciation- Fixtures X

Increase in Provision for doubtful debts X

Loss on disposal X (X)

 Profit from operations X
Less: Interest Expense (X)

Profit for the year X

• Reduction in Provision for doubtful debts or increase in provision can either be there in a
question. Same goes for profit or loss on disposal.

• Prepaid is ALWAYS subtracted from the value given in the trial balance whether its an income or
an expense

• Owing/ Accrued is ALWAYS added to the value given in the trial balance whether its an income
or expense

• Depreciation with straight line method = cost x percentage

• Depreciation with reducing balance method = (cost - accumulated depreciation) x Percentage

• Provision for doubtful debts = (trade receivables - irrecoverable debts) x percentage of provision.

• For provision only and only the change in provision for doubtful debts goes in the income
statement

• If provision has reduced it goes in the incomes section

• If provision has increased it goes in the expenses section

 ABC
Statement of financial position as at_________

$ $ $
Accumulated
Cost depreciation NBV
NON CURRENT ASSETS

Motor Vehicles X X X
Premises X X X

Land and buildings X X X

Fixtures and fittings X X X

Office equipment X X X

Computers X X X

X
CURRENT ASSETS

Inventory X

Trade receivables X
Less: provision for doubtful debts (X) X
Other receivables X
Bank X

Cash X X
Total assets X

Capital at start X
Add: profit for the year X
X

Less: drawings (X) X

 $ $ $
NON CURRENT LIABILITIES

X
Bank loan

CURRENT LIABILITIES

Trade payables X

Bank overdraft X
Other payables X X

• Other receivables include prepaid expenses and owing incomes

• Other payables include owing expenses and prepaid incomes

• Capital at start + profit for the year - drawings = Capital at end

• Non current assets can include more items

• Accumulated depreciation is subtracted from cost of the non current asset to get the net
book value of the non current asset.

• Bank is an asset and it is a positive balance in the bank account. Bank overdraft is a
liability and it is a negative balance in the bank account. It can either be there in a
question.
 Important formats for accounting for partnerships

Mr A and Mr B
Appropriation account for the year ended _________

$ $

Profit for the year X

Add: interest on drawings

Mr A X
Mr B X X
X

Less: Interest on capital

Mr A X
Mr B X

Less Salary - Mr A X (X)

X
Profit Shares
Mr A X
Mr B X
X
 • Residual profits are distributed among partners in the profit sharing ratio

• percentages for interest on drawings and interest on capital are mentioned in the question

Partner’s Current Account

Current Account

Date Details Mr A Mr B Date Details Mr A Mr B

Drawings X X 1st Jan Balance b/d X X

2023
Interest on drawings X X Interest on capital X X

Drawings- Salary X Salary X

31st Dec Balance c/d X X Interest on loan X
2023
Profit Shares X X

t
X X X X

1st Jan Balance b/d X X

2024

• Current account may also have a debit balance brought down

• Anything that increases partner’s capital must come on the credit side of the current account
• Anything that decreases partner’s capital must come on the debit side of the current account
• Interest on partner’s loan comes on the credit side in case it isn’t paid to the partner. Basically added
to partner’s capital.
• Salary is credited in the current account when its allotted to the partner
• When salary is also paid to the partner, it comes on the debit side of the current account as well
• The balance c/d may come on the credit side too. In case the partner withdraws more than what they
are entitled to.
• Share of losses must come on the debit side of the current account
 Manufacturing Account
ABC
Manufacturing account for the year ended______

$ $

Cost of Raw Materials used

Opening inventory of Raw Material X
Add: Purchases of Raw Material X
Add: Carriage inwards on Raw Material X
Less: Purchases returns on Raw Material (X)
X
Less: Closing Inventory of Raw Material X
(X)

Direct Labour
Factory Wages X

Direct Expenses
Royalties
X
Packaging costs X
PRIME COST X

Add: Indirect Factory Overheads X

Production Manager’s Salary X
Factory Supervisor’s Salary X
Rent of Factory X
 $ $
Heat and Light of factory X
Insurance X
Indirect wages X
Depreciation- Factory Machinery X
Depreciation- Factory Building
X
Depreciation- Factory Equipment
X
Depreciation- Loose tools X X

X
Add: Opening Work in progress
X
Less: Closing Work in Progress (X)
COST OF PRODUCTION X

• The factory wages can be worded as direct wages or production wages in the question.

• Only factory related costs or expenses go to the manufacturing account. Any sales, office,
administrative or distribution expenses will go in the expenses section of the income statement.
 ABC
Income statement (trading section) for the year ended__________

$ $

Revenue X
Less: Sales Returns (X)
Net Sales X

Less: Cost of sales

Opening inventory of finished goods X
Add: Purchases of finished goods X
Add: Carriage inwards on finished goods X
Less: Purchases returns on finished goods (X)
Add: Cost of production X
X
Less: Closing inventory of finished goods (X) (X)
Gross Profit X
 Important for Limited companies

Statement of changes in equity

Share General Retained Total

Capital Reserve Earnings

Balance at start X X X X
Shares issue X X
Profit for the X X
year

Dividend paid - (X) (X)

Interim

Dividend paid- (X) (X)

Final

Transfer to X (X) -
general reserve

Balance at end X X X X

• Every row must be totalled

• Balances at end row must be equal to the total column in the end
• Dividends proposed don’t come in the statement of changes in equity

The end 😊