How the problems are made
Each problem is an invented small business: a gift shop, a hardware store, a cloth shop or a repair service. The owner starts it with capital, buys and sells goods on credit and for cash, takes returns, pays suppliers and expenses, takes drawings, and sometimes borrows or buys equipment. Customers never pay more than they owe, the bank never runs dry, and every account ends the month with a balance.
A compound entry, start to finish
In set EQZG32, Leah Byrne buys shop fittings on 17 October for $4,600, paying $1,600 by bank transfer and owing Shopfit Direct the rest. One compound entry records it: debit Fixtures and fittings $4,600; credit Bank $1,600 and Shopfit Direct $3,000. In the ledger, the fixtures and fittings account gets two debit lines, Bank $1,600 and Shopfit Direct $3,000. On 21 October J Patel returns goods worth $320: debit Sales returns, credit J Patel. His account then has $3,950 on the debit side and $320 on the credit side, so the balance c/d of $3,630 goes on the credit side and comes down as a debit on 1 November. The trial balance totals $22,000 on both sides. Open set EQZG32
What each level covers
1: journal entries for a month. 2: post a given journal to the ledger (or US T-accounts) and balance each account. 3: a trial balance from a list of balances, with returns, drawings and sometimes an overdraft. 4: the whole month, journal to trial balance. 5: correction of errors and the suspense account, with the corrected profit; the US layout instead finds one error in a trial balance by halving the difference or dividing it by 9. 6: adjusting entries for accruals and prepayments (US: supplies, insurance, salaries and unearned revenue).
Questions
What are the rules of debit and credit?
Assets, expenses, purchases and drawings go up on the debit side. Liabilities, capital and income go up on the credit side. Every transaction has at least one debit and one credit, and the two totals are always equal.
How do you write a journal entry?
Write the date, then the account debited with its amount in the Debit column, then the account credited, indented, with its amount in the Credit column. In India the debit line ends in Dr. and the credit line starts with To. A short narration below says what happened.
How do you balance a ledger account?
Add up both sides. Write the difference on the smaller side as balance c/d, so both sides reach the same total, and total them. Then bring the balance down (b/d) on the other side, dated the first day of the next period.
Which balances go on the debit side of a trial balance?
Assets, expenses, purchases, sales returns and drawings. Capital, liabilities, sales, other income and purchases returns go on the credit side. A bank overdraft is money owed to the bank, so it is a credit balance.
Which errors do not affect the trial balance?
Cambridge IGCSE lists six: errors of commission, compensating errors, complete reversal, omission, original entry and principle. In each one the debits still equal the credits, so the trial balance agrees even though the books are wrong.
What is a suspense account?
A temporary account that holds the difference when a trial balance does not agree. Each one-sided error found is corrected through it, and once every such error is corrected its balance is nil.
How do you find an error in a trial balance?
Work out the difference between the totals. If half of it matches a balance, that balance may be in the wrong column. If it divides exactly by 9, two digits may have been swapped. OpenStax describes both checks.
What is an adjusting entry?
A journal entry at the end of a period that puts income and expenses in the right period: amounts still owed, amounts paid in advance, and supplies or insurance used up. No cash moves in an adjusting entry.
Sources, checked October 26, 2026: Cambridge IGCSE Accounting 0452 syllabus for 2026 (PDF), topics 2.1, 2.3, 3.1, 3.2 and 4.3; NCERT Accountancy Part I, class 11, chapter 3: Recording of Transactions I (PDF); chapter 4: Recording of Transactions II (PDF); chapter 6: Trial Balance and Rectification of Errors (PDF); Part II, chapter 9: Financial Statements II (PDF); AAT Level 2 Certificate in Accounting specification, version 5.7 (PDF); OpenStax Principles of Accounting, Volume 1, sections 3.5 and 3.6 and 4.3.