CH3 - Recording & Summarising Transactions

Question 1

Importance of maintaining financial records for internal use

Answer 1

Financial records are used by the management of the company for control purpose.
It would be hard for a business to function if it did not keep accounting records.

Question 2

Settlement discount allowed.
Expected to pay

Answer 2

Dr Receivables 1940- after diskaun
Cr Sales 1940

Question 3

Settlement discount allowed.
Expected to pay and pay within time period

Answer 3

Dr cash 1940-after diskaun
Cr Receivables 1940

Question 4

Settlement discount allowed.
Expected to pay and pay after time period

Answer 4

Not entitled for discount
Dr Cash 2000 -original amount
Cr Receivables 1940
Cr Sales 60 -diskaun

Question 5

Settlement discount allowed.
Not expected to pay.

Answer 5

Dr Receivables 8000 -original amount
Cr Sales 8000

Question 6

Settlement discount allowed.
Not expected to pay. And pay WITHIN time period.

Answer 6

Entitled for discount.
Dr cash 7760 -after diskaun
Dr Sales 240 -diskaun
Cr Receivables 8000 -original amount