(a) Identify the book of original entry in which each of the following transactions will be recorded:
(i) purchase of office equipment on credit; (ii) credit purchases;
(iii) bank charges;
(iv) goods returned by a customer.
(b) State one source from which each of the following items could be transferred into purchases ledger control account: (i) purchases; (ii) cash payments; (iii) returns outwards; (iv) discount received; (v) petty cash payments.
(c) Explain the following types of ledgers:
(i) sales ledger, (ii) purchases ledger; (ii) general ledger.
(a)
| S/N | Transaction | Book of Original entry |
| i | Purchase of the office equipment | General Journal |
| ii | Credit purchase | Purchase day book |
| iii | Bank charges | Cas book |
| iv | Goods returned by customer | Sales of day book |
(b)
| S/N | Item | Source |
| i | Purchase | Purchase day book |
| ii | Cash Payment | Cash book |
| iii | Return Outward | Purchase day book |
| iv | Discount received | Cash book |
| v | Petty cask book | Cash book |
(c)
(i) Sales ledger: This is the ledger that is used to record all credit transactions relating to credit sales. It does not include the cash sales. It records all credit sales and transactions relating to the credit sales. Examples of transactions include discount allowed, credit sales payment by debtors. The balance on the sale ledger shows the debtors at the beginning and at the end of the period.
(ii) Purchase ledger: This is the ledger that is used to record all credit transaction relating to purchases. The balance at the beginning is the creditor at the beginning and the balance at the end is the creditor at the end of the period. All transaction that relates to credit purchase are recorded in the purchase ledger.
(iii) General ledger: This is the ledger that is used to record all transaction that does not have specific heading such as assets, liabilities, equity, income and expense. These trans- actions are not feasible to be separated lost there will be too
much accounts.
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