Accounting Subsidiary Books

 Cash Book records all receipts of and payments in cash. 

( True) Ledger is a subsidiary book.

 Petty cash book is used for recording a large number of small payments such as conveyance, cartage, postage, telegram and other expenses (miscellaneous expenses) which are usually in nature.

Journal proper is the book of original entry used for transactions that do not fit into specialized subsidiary books like the cash book, sales book, or purchase book.

Subsidiary books are books of original entry where transactions are recorded for the first time before being posted to the ledger.

The Cash Book, Purchases Returns Book, and Journal Proper are all considered subsidiary books in accounting systems.

Purchases Book, Sales Book, and Bills Receivable Book are all standard subsidiary books used to record specific types of credit transactions.

The sale of old furniture is not a credit sale of goods, so it should not be in the Sales Day Book. To rectify, we must reverse the entry in Sales (debit) and record it correctly in the Furniture account (credit).

If the Sales book was overcast, the sales account was credited with an excess amount. To rectify this after the trial balance, we debit the Sales account and credit the Suspense account.

Sales represent the revenue generated by a business from selling goods or services. In accounting, all revenue and expense accounts are classified as nominal accounts.

Return of goods, purchased on credit is recorded under Purchase Return Book or return outward book. Purchase book shows a debit balance, so purchase return book will show credit balance. While returning the goods buyer sent a "debit note" to the seller. The debit note contains the quantity of returned goods and reason of returning goods.

Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as "Credit note". The returned outward book is used to record return of goods purchased on credit.

Withdrawal slip is used to withdraw cash from the bank. It is the slip that an account holder has to fill to enable him to withdraw money from the bank. It includes the name of the account holder, amount to be withdrawn, account number and date that should be provided at the time of withdrawing money from the bank.

Special Journals (also known as subsidiary journals) are chronological records of frequently occurring transactions such as sales, purchases and cash receipts/payments.

Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as "Credit note". A duplicate copy of credit note is used to record the transaction in the sales return book and the original copy is sent to the original party who returned the goods i.e. customer.

Following are memorandum books:

The journal is sub-divided into different journals known as the subsidiary books or books of prime entry or books of original entry.

Credit sales of goods are recorded in the Sales Book. Cash sales go to the Cash Book, and non-goods credit transactions go to the Journal Proper.

Standing orders are automatic payments made by the bank on behalf of the customer. These are recorded as credits in the cash book (bank column) because they represent money leaving the account.

Sales book, Purchase book, and Cash book are standard subsidiary books. A 'Salary book' is not a standard subsidiary book used for recording primary transactions in the same way.

An error of commission occurs when a transaction is recorded incorrectly, such as a mistake in casting (totaling) a subsidiary book.

All statements (i), (ii), and (iv) are correct. (i) is commission, (ii) is correct as casting error affects the total but not individual debtor accounts, and (iv) is correct as it doesn't affect the trial balance totals.

An overcast sales day book overstates the credit side of the ledger, and the other errors also affect trial balance totals, resulting in a net difference. Analyzing each error systematically reveals the net effect on the suspense account. The resulting discrepancy leads to the correct trial balance status described in the option.

Recording a return as a sale increases the sales figure (revenue) and hides the return (expense/reduction). This artificially inflates the gross profit.

When transactions are moderate, businesses use a specific 'Sales or Return Journal' to track goods sent on approval until they are formally accepted or returned.

Purchasing goods is a credit to the supplier and a debit to purchases. Recording this in the Sales Return Book incorrectly treats the transaction as a return of goods sold, which reduces the recorded sales and increases the cost of goods sold, thereby decreasing the gross profit.

The sale or return ledger is a subsidiary ledger used to record sale or return basis transactions by customer. The ledger includes individual accounts for each customer and also a total account used to record the sale or return daybook totals.

Due to the wrong posting of purchase return in sales A/c, sales increases by Rs.10000 , that will result in increase in gross profit.

Selling goods should be recorded in the Sales Book. Recording it in the Sales Return Book incorrectly reduces the total sales figure, which directly leads to a decrease in the calculated gross profit.

If two or more transactions of the same nature occur on the same day and either debit account and/or credit account are common in them, then instead of passing a separate entry for each such transaction, one combined entry may be passed. Such type of entry is known as compound journal entry.

In terms of goods sent numerously, goods returned by the customer within the specified time limit are first recorded in the Sale or Return Day Book. After this, the customer’s accounts are individually credited in the Sale or Return Ledger while the Sale or Return A/c is debited with the total of the Sale or Return Day Book.

The proprietor represents a person or a group of persons (the owner). In accounting, accounts related to persons are classified as personal accounts.

Cost of cars is Rs 50000 each so the cost of goods lying with the customers will be 100000.

Since the furniture was sold to Ram on credit previously, the amount received from him should be credited to his account to settle the debt. The cash received is debited to the Cash account.

|
Date
|
Particulars
|
Credit Note No.
|
L.F.
|
Amount

|
| --- | --- | --- | --- | --- |
|
5th Jan 2016
|
Goyal
& Co. Rampur returned 2 Polyster sarees @ 125 each
|
 
|
 
|
250
|
|
10th Jan 2016
|
Return of
goods by Garf & Co. 2 Kota sarees @ 50
 
|
 
|
 
|
100
|
|
17th Jan 2016
|
Mittal
& Co. Hissar returned 2 silk sarees @ 325
|
 
|
 
|
650
|
|
31st Jan 2016
|
No Entry
|
 
|
 

|
-
|
|
 
|
Total of Sales Return book
|
 
|
 
|
900
|

Return of goods by a customer is a Sales Return (Return Inward), which is debited to the Sales Return Account. Return Outward refers to the return of goods to a supplier (Purchase Return).