Books of Original Entry

Which statement best defines books of original entry as used in accounting?

• Books where totals from the ledger are summarized for reporting

• Books where transactions are recorded for the first time before posting to ledger accounts

• Books used only for budgeting estimates and forecasts

• Books containing only closing entries at the end of the year

A sale on credit should be first entered in which book of original entry?

• Purchases Journal

• Sales Journal

• Cash Book

• General Journal

Match each transaction to the most appropriate book of original entry it belongs to.

• Cash Book for receipts and payments by cash/cheque; Returns Inwards Journal for goods returned by customers; Returns Outwards Journal for goods returned to suppliers

• Sales Journal for cash sales; Purchases Journal for goods returned by customers; General Journal for credit purchases

• Returns Inwards Journal for payments by cheque; Cash Book for goods returned to suppliers; Purchases Journal for credit sales

According to the journal entry format shown, which set lists the essential details that must be entered and are extracted from source documents?

• Date, Details, Folio, Invoice number, Amount

• Date, Ledger balance, Bank code, Cheque number, Total

• Transaction type, Approval stamp, Customer signature, Receipt number, Tax rate

• Supplier address, Payment terms, Currency symbol, Accountant initials, Discount

Which statement best describes a nominal account in basic accounting classifications?

• An account for debtors and creditors related to people or organizations

• An account that records fixed and current assets such as buildings and machinery

• An account in which expenses, income, and capital are recorded

• An account used only for cash transactions in the business

Items from the Sales Journal are posted to which side of customers’ personal accounts in the Sales Ledger?

• Debit side

• Credit side

• Both sides equally

• Only the balance column

A PURCHASE INVOICE is issued by whom and under what condition?

• By the customer when goods are sold for cash

• By the supplier when goods are bought on credit

• By the bank when payments are made by cheque

• By the store when goods are returned

A business made several credit sales during April. According to the notes, what two postings are required to reflect these in the ledgers?

• Debit suppliers’ accounts; credit Sales account

• Debit customers’ personal accounts; credit Sales account with period total

• Credit customers’ personal accounts; debit Purchases account

• Credit Sales account for each invoice; debit Purchases account with total

Which document is sent by the business to a supplier to request an allowance for goods the business returned?

• Debit note

• Credit note

• Goods received note

• Sales invoice

Which pairing correctly matches the journal with the ledger where individual personal accounts are posted?

• Returns Inward Journal → Sales Ledger

• Returns Inward Journal → Purchases Ledger

• Returns Outward Journal → Sales Ledger

• Returns Outward Journal → General Ledger only