Winnie T. P. Bear runs a small ceramic honey pot store at “The Woods” shopping
precinct. The business, called the “Hunny Pots”, sells two types of pots, Large and
Small.
The Business has registered for GST and has an ABN 40 741 258 639. It pays GST
quarterly to the Australian Tax Office.
Accounting system
The company has financial year end 30 June and prepares adjusting entries at the
end of the each month. The firm uses the following journals to maintain its accounting
records
? Sales Journal: to record all credit sales of inventory
? Purchased Journal: to record credit purchases of inventory
? Cash Receipts Journal: to records all cash receipts
? Cash Payments Journal: to records all cash payment
? General Journal: to record all transactions other than the above
The company maintains a general ledger for each account. Subsidiary ledgers are
used to record separate details that Accounts Receivable and Accounts Payable.
The company uses a perpetual inventory recording system.
Goods and services tax (GST)
The company is registered for GST and therefore is required to pay GST on its
purchases and collect GST on its sales. All prices include GST unless specifically
excluded
Unadjusted Trial Balance and Chart of Accounts
The unadjusted Trial Balance as at 29 February 2020 and a Chart of Accounts is
presented on the next page.
Accounting Procedures
The transactions are recorded by you, the accountant for Hunny Pots on a daily basis
in the appropriate journal. Transactions are posted daily from the General Journal.
Transactions are also posted daily to the Accounts Receivable and Accounts Payable
subsidiary ledgers. Total of the Special Journals are posted to the appropriate
accounts at the end of the account period.