chapter 7 - books of prime entry

Question 1

definition of:

book of prime entry

Answer 1

one which transactions are recorded before being entered in ledger

Question 2

advantages of books of prime entry

Answer 2

• same types of transactions are grouped together, useful when posting to ledger
• book-keeping can be divided between several people
• assist in collating and summarising of accounting information

Question 3

definition of:

sales journal

Answer 3

a list of names of businesses to which credit sales have been made, the value of goods sold and the date on which the sales were made

Question 4

definition of:

sales returns

Answer 4

a list of name of businesses which have returned goods previously sold on credit, the value of goods returned and the date on which the returns were made

Question 5

definition of:

purchases journal

Answer 5

a list of names of businesses from which credit purchases were made, value of goods purchased and the date the purchases were made

Question 6

definition of:

purchases returns journal

Answer 6

a list of names of businesses to which goods previously purchased on credit were returned, the value of goods returned and the date the returns were made

Question 7

boos of rifle entry and source of documents

Answer 7

sales journal: copy of invoices
sales returns journal: copy of credit notes
purchases journal: original copy of invoices
purchases returns journal: original copy of credit notes