Tag: purchases and sales book

Questions Related to purchases and sales book

The following comments all relate to the recording process. Which of these statements is correct?

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

  1. The general journal is a chronological record of transactions.

  2. The general ledger is posted from transactions recorded in the general journal.

  3. The trial balance provides the primary source document for recording transactions into the general journal.

  4. Transposition is the transfer of information from the general journal to the general ledger.

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Correct Option: A

Transactions that a business doesn't record in any specialized journal are recorded in which journal or book?

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

  1. Cash payments journal

  2. Cash receipts journal

  3. Purchases return journal

  4. General journal

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Correct Option: D

Journal is a book of __________.

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

  1. original entry

  2. all cash transactions

  3. secondary entry

  4. all non-cash transactions

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Correct Option: A

The process of recording a transaction in the journal is called __________.

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

  1. Posting

  2. Journalising

  3. Tallying

  4. Casting

  5. Balancing

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Correct Option: B

XYZ company purchase an asset that turns out to be defective and was required to be sold as a worn out item. The entry will be made in _______________.

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

  1. Worn out journal

  2. Cash journal

  3. General journal

  4. None of the above

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Correct Option: C

What will be journal entry when cash is withdrawn from bank for personal use?

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

  1. Drawings A/c debit, bank A/c credit

  2. Cash A/c debit, drawings A/c credit

  3. Bank A/c debit, drawings A/c credit

  4. Bank A/c debit, capital A/c credit

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Correct Option: A
Explanation:

Drawings are the amounts taken by the owner of a business for his personal use in anticipation of profit. Drawings are usually made in the form of cash, but there could be other assets or goods withdrawn by the owner for his personal use.

Journal Entry will be:-
Drawing A/c Dr. 
   To Bank A/c.