3.2 Books of Prime Entry and Ledgers

Question 1

6 Books of Prime Entry

Answer 1

• Sales Journal
• Purchases Journal
• Sales Returns Journal
• Purchases Returns Journal
• Cash Book
• General Journal

Question 2

Sales Journal

Answer 2

Lists all the sales invoices

Question 3

Purchases Journal

Answer 3

Lists all the purchase invoices

Question 4

Sales Returns Journal

Answer 4

Lists all credit notes issued by the business

Question 5

Purchases Returns Journal

Answer 5

Lists all credit notes received by the business

Question 6

Cash Book

Answer 6

Used to record bank receipts and bank payments, as well as cash discounts allowed and cash discounts received

Question 7

What is the Left Side of the Cash Book used to Record?

Answer 7

• Positive bank balance at the start of the month
• Amounts received by the business (cash and bank payments from customers)
• Cash discounts allowed

Question 8

What is the Right Side of the Cash Book used to record?

Answer 8

• Negative bank balance at the statrt of the month
• Amounts paid by the business (eg: to suppliers for goods received)
• Cash discounts received

Question 9

General Journal

Answer 9

Used to record non-routine transactions

Question 10

Receivables Ledger

Answer 10

Includes a T-account for each individual credit customer

Question 11

Payables Ledger

Answer 11

Includes a T-account for each individual credit supplier

Question 12

General Ledger

Answer 12

Includes T-accounts for every item that will appear in the financial statements

• Income Statement: Revenue, Purchases, Expenses
• SoFP: Assets and Liabilities, Capital, Drawings