B 1, 3 & 4
The entries for transactions 1, 3, and 4 are incorrect because they show an increase in Cash at bank when in fact, these transactions involve a decrease in Cash at bank.
Use the following transaction analysis chart prepared by a student to answer Question 25.
Transaction Accounts involved Type of accounts Increase or
decrease Action
1 Payments to creditor, K 3 500 Creditor
Cash at bank Liability
Asset Decrease
Decrease 3 500 Dr
3 500 Cr
2 Received from a debtor K 2 000 Debtor
Cash at bank Asset
Asset Increase
Decrease 2 000 Dr
2 000 Cr
3 Purchase of goods on credit K 3 000 Purchases
Cash at bank Expense
Asset Increase
Decrease 3 000 Dr
3 000 Cr
4 Paid rent expense K 1 400 Rent expense
Cash at bank Expense
Asset Increase
Decrease 1 400 Dr
1 400 Cr
6 Purchase of Motor vehicle on credit
from Ela Motors K 30 000 Motor vehicle
Creditor - Ela Motors Asset
Liability Increase
Increase 30 000 Dr
30 000 Cr
25. Which entries included in the chart are incorrect?
A 1, 2 & 6
B 1, 3 & 4
C 2 & 3
D 3 & 6
1 answer