Double entry

Question 1

Personal savings

Answer 1

referred to as ‘capital’. You need to credit ‘capital’

Question 2

Sales returns

Answer 2

opposite of ‘sales revenue’. You need to debit ‘sales returns’

Question 3

Purchase returns

Answer 3

opposite of ‘purchases’. You need to credit ‘purchases returns’

Question 4

Purchases of non-current assets such as vehicles or equipment

Answer 4

they are not ‘purchases’. you need to debit ‘vehicles’ or ‘equipment’

Question 5

Drawings

Answer 5

money or goods taken out of the business by the owner-are a debit. drawings are similar to a running cost, even if they are not an expense on the income statement.

Question 6

Sales journal

Answer 6

lists the invoices for credit sales

Question 7

Purchases journal

Answer 7

lists the invoices for credit purchases

Question 8

sales returns journal

Answer 8

lists the credit notes issued by the business. also called the returns in journal.

Question 9

Purchases returns journal

Answer 9

lists the credit notes received by the business. also called the returns out journal

Question 10

cash book

Answer 10

used to record bank reciepts and bank payments. a three column cash book has an extra column to record cash discount allowed and cash discount recieved