Books Of Prime Entry

Question 1

What is a book of prime entry?

Answer 1

The place where a transaction is first recorded in the books of the business.

Question 2

Define sales day book

Answer 2

Is a list of the sales invoices that are to be processed for a given period

Question 3

In its simplest form, what do the SDB comprise?

Answer 3

Just the names of the customers and the amount of the invoices issued in a particular week.

Question 4

The SDB is a list, the totals of which are used to…

Answer 4

Preform the accounting entry

Question 5

What does the SDB usually include?

Answer 5

Analysis columns showing how the total value of each customers invoice is made up

Question 6

What columns are in an analysed sales day book?

Answer 6

Date of trans, customer name, ref column(code number of cust acc), invoice number, total including VAT as shown on invoice, VAT column, product 1, 2 etc, the total boxes

Question 7

Define the sales returns day book

Answer 7

A list of the credit notes that are to be processed for a given period

Question 8

What is the difference between sales day book and sales return day book

Answer 8

Instead of invoice number column, there will be a credit note number column

Question 9

Define the purchase day book

Answer 9

A list of purchases invoices that are to be processed for a given period (a week)

Question 10

What does the purchase day book compromise of

Answer 10

The names of the suppliers and the amount of the invoices received in the week

Question 11

The purchase date book analysed should include

Answer 11

The date, the supplier, the reference, the invoice number, the total, the VAT column, product 1, 2, the total boxes

Question 12

Define the purchases returns day book

Answer 12

This is similar to purchase day book, instead of having an invoice number, there will be a credit note number.

Question 13

Define cash book

Answer 13

A cash book is a record of cash receipts and payments that can form part of the double entry bookkeeping system as well as being a book of prime entry

Question 14

What are the various forms of a cash book?

Answer 14

Two column or three column cash book

Question 15

What is the difference between a two column and three column cash book?

Answer 15

The three column introduces a discount column

Question 16

How is a pro forma two column laid out

Answer 16

The left hand side records money recieved
The right hand side records money paid out
The date column is transaction date
The narrative column describes transaction
The cash column on left represents cash recieved whereas on the right shows cash paid
The bank on the left shows money recieved the bank on the right shows money paid

Question 17

Define the analysed cash book

Answer 17

Is a cash book with additional columns for analysing principle sources and payments for cash into types of income and expense

Question 18

How is a proforma analysed cash receipt displayed?

Answer 18

Date, narrative, reference, cash, bank, VAT, receivables and cash sales

Question 19

How is a proforma analysed cash payments book shown?

Answer 19

Date, narrative, ref, cash, bank, VAT, payables, cash purchases, admin

Question 20

Define discounts allowed day book

Answer 20

Is used to record the discounts that have not been deducted at the point of the invoice being recorded in the sales day book but instead were offered on a conditional basis. (Prompt payments)

Question 21

What is the purpose of the discounts allowed day book?

Answer 21

To record the credit notes that must be issued due to the customer taking advantage of a prompt payment discount that have been offered.

Question 22

What does a credit note deal with?

Answer 22

The reduction to the original foods value(net amount) and VAT.

Question 23

What happens after a credit note is dealt with?

Answer 23

The total (gross amount) is then deducted from the receivable (credit customers) balance.

Question 24

What is the discounts allowed day book used for?

Answer 24

A list used to perform the accounting entry.

Question 25

How is a discounts allowed day book laid out?

Answer 25

Date, narrative, reference, total, VAT, net

Question 26

Define discounts received day book

Answer 26

Is used to record the discounts that have not been deducted at the point of the invoice being recorded in the purchases day book but instead were offered on a conditional basis.. prompt payment

Question 27

What is the purpose of the discounts received day book?

Answer 27

To record the credit notes that have been recieved due to the business taking advantage of a prompt payment discount that was offered.

Question 28

How is a discounts recieved day book laid out?

Answer 28

Date, narrative, ref, total, vat, net

Question 29

Define petty cash

Answer 29

A small amount of cash that most businesses hold in order to make small cash payments.

Question 30

Define petty cash book

Answer 30

Is one in which all petty or small payments made through the petty cash fund are recorded systematically