Builder's Guide to Accounting 03

Question 1

1 p 37.

What is a SALES JOURNAL?

Answer 1

It is a BOOK OF ORIGINAL ENTRY, and summarizes information from SOURCE DOCUMENTS.

Question 2

2. In the case of SALES, a SOURCE DOCUMENT is:

Answer 2

either an INVOICE or a PAYMENT, depending on whether you are booking the ACCRUAL of EARNED INCOME or the RECEIPT OF A CASH PAYMENT.

Question 3

3. EVERY entry into your system is made on:

Answer 3

a JOURNAL.

Question 4

4. What is the INCOME JOURNAL?

Answer 4

It SUMMARIZES multiple INCOME TRANSACTIONS during the month, and a month end entry is then made from it TO THE GENERAL LEDGER.

Question 5

5. What is the value of keeping good record of RECEIVABLES?

Answer 5

YOU CANNOT FORECAST CASH FLOW UNLESS YOU CAN ESTIMATE YOUR FUTURE RECEIPTS.

Question 6

6. You can track your changing COLLECTION PATTERN by:

Answer 6

watching the trends in your COLLECTIONS. With this information, you can establish a dependable pattern for FORECASTING THE FUTURE, steering you away from bad customers.

Question 7

7. If you are NOT managing your RECEIVABLES effectively, you:

Answer 7

may continue to take on work that will cause COLLECTION PROBLEMS.

Question 8

8. TRENDS, good or bad, are difficult to see because:

Answer 8

they HIDE within the CHANGES in your sales volume.