DAY BOOKS

Question 1

WHAT DOES IT MEAN ‘‘ON CREDIT’’

Answer 1

CASH PAYMENT RELATING TO A FINANCIAL TRANSACTION WILL OCCUR AT A LATER DATE.

• UNTIL CASH IS RECEIVED OR PAID, BUSINESS WILL HAVE:
  - RECEIVABLE ASSET FROM A CUSTOMER
  - PAYABLE LIABILITY TO A SUPLLIER

Question 2

BOOKS OF PRIME ENTRY (DAY BOOKS)

Answer 2

• SALES DAY BOOK (SALES INVOICES/ ACCOUNT FOR CUSTOMERS)
• PURCHASESDAY BOOK (PURCHASES INVOICES/ ACCOUNT FOR SUPPLIERS)
• RETURN SALES DAY BOOK ( SALES CREDIT NOTES)
• RETURN PURCHASES DAY BOOK ( PURCHASES CREDIT NOTES)
• DISCOUNT ALLOWED DAY BOOK ( CREDIT NOTES GIVEN TO CUSTOMERS)
• DISCOUNT RECEIVED DAY BOOK (CREDIT NOTES RECEIVED FROM SUPPLIERS)

Question 3

CASH DAY BOOK

Answer 3

FOR FINANCIAL TRANSACTIONS THAT INVOLVE THE PROMPT PAYMENT OR RECEIPT OF CASH.

• EVEN THOUGH IS THE CASH BOOK IS A SEPARATE BOOK WHEN IT COMES TO PREPARE THE FINANCIAL STATEMENT IT IS USED AS IF IT WAS A T-ACCOUNT IN THE GENERAL LEDGER.

Question 4

BANK RECONCILIATION

Answer 4

IT IS A CHECK BETWEEN THE CASH BOOK AND THE BANK STATEMENT… SEE IF THEY MATCH