Books of original entry

X sends back $800 of faulty goods to Y in

which book of prime entry would Y record this

transaction?

• General Journal

• Purchases Journal

• Sales Journal

• Sales Returns Journal

An article is subject to a 20% trade discount. Its list

price is $600. What is the sale price?

• $120

• $480

• $580

• $720

A retailer purchases goods worth $3 000. He receives

30 per cent trade discount and 5 per cent cash

discount. How much should he pay for the goods?

• $1 995

• $2 095

• $2 100

• $2 850

A trader received an invoice for $4 000 less 25%

trade discount. Subsequently he returned one-eighth

of the value of the goods. What amount would be

entered in his Returns Outwards Account?

• $375

• $400

• $450

• $500

A credit balance in the Cash Book indicates that

• There is a balance in the bank

• Too much cash is paid out of the office

• The bank balance is overdrawn

• Too many discounts are allowed

Cost of stock purchases $400

Trade discount 10%

• $360

• $390

• $410

• $440

A Supplier offers the following discounts. Trade

discount 12.5% off list and cash discounts of 3%.

What is the lowest amount that will be paid for

goods with a list price of $1 600?

• $1 358

• $1 400

• $1 552

• $1 600

Bookkeeper discovers that an amount paid to a

supplier has been wrongly entered in another

supplier’s account. What book of original entry will

the bookkeeper use when correcting this error?

• Cash book

• General Journal

• Purchases Day Book

• Sales Day Book

supplier’s account in a customer’s books has a

credit balance of $8000. What does this mean?

• The customer owes the supplier $8000

• The customer has paid the supplier $8000

• The supplier has paid $8000

• The supplier owes $8000

On January 12, 1994, a merchant purchased goods

amounting to $120 on the following terms: 5% cash

discount if paid within 30 days. He settled his debt

on February 28, 1994. How much did he pay?

• $112

• $114

• $120

• $126