State the account to be debited and credited for each transaction, and the effect of each transaction on the Statement of Financial Position.

Here are the solutions for Question 2, covering the journal entries, their effects on the Statement of Financial Position, and the Suspense Account.

QUESTION 2

Part 1: State the account to be debited and credited for each transaction, and the effect of each transaction on the Statement of Financial Position.

• viii. Asiedu used part of the goods meant for his personal use GH¢400.

  • Debit: Drawings A/c
  • Credit: Purchases A/c
  • Effect on SFP: Assets (Inventory) decrease, Equity (Drawings) decreases.

• ix. Withdrew cash from bank for office use GH¢1,500.