Books of prime entry

Question 1

Name 8 books of prime entry?

Answer 1

Sales day book
Sales return day book
Purchase day book
Purchase return day book
Cash book - debit and credit
Petty cash book
Discounts received day book
Discounts allowed day book

Question 2

Which business document is included in the sales day book?

Answer 2

It lists all the business invoices sent to credit customers.
Includes the total, VAT, net prices

Question 3

Which business document is included in the sales returns day book?

Answer 3

Lists all the credit notes that the business has received.
Includes total, VAT, net prices

Question 4

What is the purpose of the cash book?

Answer 4

To record all the money received and paid out by the business. Often split into debit and credit side.

Question 5

What does the debit and credit cash book record?

Answer 5

Debit - records all the money received by the business. For example: Cash, cheque or debit card. Generally accumulated through cash and credit sales.
Credit - Records all the money paid out by the business. For example: Purchases of goods for resale, Payments made to suppliers, Regular payments such as salaries.

Question 6

Which business document is recorded in the purchases day book?

Answer 6

When purchases are made to suppliers they will receive an invoice from the supplier. This purchase invoice will be recorded in the purchases day book.

Question 7

Which business document is recorded in the purchases return day book?

Answer 7

The business might have been invoiced for goods they brought which were faulty or not ordered. Therefore, they will request a credit note against the invoice. These credit notes need to be recorded.

Question 8

What is a recieveables ledger?

Answer 8

Contains a ledger account for every customer. Shows the amount owed by that customer.

Question 9

What is a payable ledger?

Answer 9

Contains ledger accounts for each supplier. The suppliers ledger account shows how much is owed to that business.

Question 10

On a receivables ledger T account what do the two sides show?

Answer 10

Left hand side records the invoices, increasing the money owed by the customer.
Right hand side records the credit notes, prompt payment discounts all of which decrease the amount owed by the customer.

Question 11

On a payables ledger T account what do the two sides show?

Answer 11

LEFT hand side records the invoices which increases the amount owed to the supplier.
RIGHT hand side records the credit notes, ppd and payments to the supplier all of which decrease the amount owed to the supplier.