Ledger Processing in Trading Companies

What is the primary purpose of a special journal?

• To systematically record specific types of transactions.

• To calculate tax liabilities.

• To track employee attendance.

• To summarize all financial statements.

Which of the following is NOT a type of special journal?

• Sales journal

• Purchases journal

• Cash receipts journal

• General journal

How is the total of a special journal typically posted to the ledger?

• The total is posted as a summary report to management.

• The total is posted as a single entry to the respective accounts in the ledger.

• The total is not posted to the ledger at all.

• The total is posted individually for each transaction.

What type of transactions are recorded in a sales journal?

• Cash sales transactions.

• Credit sales transactions.

• Inventory purchases.

• Service transactions.

In which journal would you record cash purchases?

• Cash book

• Expense report

• Inventory journal

• Sales ledger

What is the effect of posting from a special journal to the general ledger?

• It deletes all previous entries in the general ledger.

• It creates a new special journal entry in the general ledger.

• It updates the general ledger accounts with summarized transaction data from the special journal.

• It only affects the balance sheet without updating the income statement.

Which account is typically debited when recording a sale in the sales journal?

• Inventory

• Sales Revenue

• Cash

• Accounts Receivable

What is the main advantage of using special journals?

• They eliminate the need for any bookkeeping.

• They simplify the process of auditing financial statements.

• They provide a way to categorize all transactions into one journal.

• The main advantage of using special journals is increased efficiency in recording similar types of transactions.

How often should special journals be reviewed for accuracy?

• Monthly or quarterly.

• Annually

• Daily

• Weekly

What is the role of the subsidiary ledger in relation to special journals?

• The subsidiary ledger replaces the need for special journals.

• The subsidiary ledger summarizes all transactions in the general ledger.

• The subsidiary ledger is used to record only cash transactions.

• The subsidiary ledger details individual accounts related to transactions recorded in special journals.