Double Entry

X buys goods on credit from Y. What is the name for the document used by X to settle the liability to Y?

• Cheque

• Credit note

• Receipt

• Statement of Account

In which book of account is cash discount received first recorded?

• Sales ledger

• Sales journal

• Purchases journal

• Cash book

X sells goods with a list price of $5000 to a credit customer. The customer is allowed a 5% trade discount and a further 2.5% cash discount if payment is within 20 days of the invoice date.

What amount should be credited to the Sales account of X?

• $4631

• $4750

• $4875

• $5000

Which should be recorded in the general journal?

• debts written off as bad

• goods returned to supplier

• goods sold for cash

• trade discount allowed to customer

Which account could have a credit balance?

• Carriage outwards

• Carriage inwards

• Bank

• Cash

X keeps a full set of books of account. Where will the Sales account appear?

• general journal

• general ledger

• sales journal

• sales ledger

X buys goods on credit from Y, who issues an invoice. The goods are unsuitable and X returnsthem to Y without paying for them.

Which document should Y issue to X on receipt of the returned goods?

• credit note

• debit note

• purchases invoice

• receipt

A business purchases goods on credit for $800, less 25 % trade discount, with a cash discount of 5 % if payment is received in full within 28 days.

How much will the business pay if it settles within 28 days?

• $560

• $570

• $600

• $760

A retailer bought 20 items from a manufacturer at list price of $20 each, subject to 20 % trade discount. The retailer later returned ten of the items.

How much is entered in the Sales Returns Journal of the manufacturer?

• $160

• $200

• $240

• $320

The totals of the discount columns in a trader’s Cash Book were as follows.

$200 debit

$150 credit

What entry will the trader make in the Discount Allowed account?

• $150 credit

• $200 credit

• $150 debit

• $200 debit