Tag: journal - book of original entry

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Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

When a firm maintains a cash book, it need not maintain _______________.

  1. Journal Proper

  2. Purchase(journal)book

  3. Sales(journal)book

  4. Bank and cash account in the ledger
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a firm maintains a cashbook,  it does not need to maintain Separate Bank and cash account in the ledger.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

The prime entry for the acquisition of a cash book, ledgers and a journal for Rs 240 from X Ltd. on credit would be in the:

  1. Journal

  2. purchases Day Book

  3. Cash Book

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Transactions that do not fit into specialized journals (like cash books or purchase day books) are recorded in the Journal Proper. Since this involves multiple items (cash book, ledgers, journal) being acquired on credit, it is a non-routine transaction recorded in the general journal.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

The journal entry to account for the acquisition on credit of factory machinery from Millet plc should require which of the following:

  1. Debit Factory account and credit Millet plc account

  2. Debit Machinery account and credit Millet plc account

  3. Debit Millet plc account and credit Machinery account

  4. Debit Machinery account and credit Cash account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When purchasing machinery on credit, the asset (Machinery) is debited to increase it, and the liability (Millet plc) is credited to record the amount owed.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

An office equipment bought on credit would first be entered by the purchaser in the ________________.

  1. Returns Outward Book.

  2. Purchase Day Book.

  3. Journal Proper.

  4. Sales Day Book returns Inward Book.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Purchase Day Book is only for credit purchases of inventory (goods for resale). Office equipment is a fixed asset, so its credit purchase is recorded in the Journal Proper.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

Credit sale of various assets or investments will be recorded in ____________.

  1. General Jounal

  2. Sales Book

  3. Cash Book

  4. Purchase Book
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Sales Book is reserved for credit sales of inventory (goods). Credit sales of assets or investments are recorded in the General Journal (Journal Proper).

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

_______ is a book in which all the business transactions are originally recorded in chronological order and from which then are posted to the ledger accounts at any convenient time. 

  1. Ledger

  2. Journal

  3. Purchases return books

  4. Sales book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The journal is the book of original entry where transactions are recorded in chronological order before being posted to the ledger.