Books of Original Entry and LedgersThe book of original entry is the book in which a transaction is recorded first. The book of original entry is also known as the day book, journal or subsidiary book.

Types of books of Original entry:Sales Journal/ Sales Day Book : For recording credit sale of goods only.Cash sales of goods and sale of assets, either on credit or for cash, are not recorded in this journal.

Format of the Sales JournalDate Name of the Customer/

(Debtor)Invoice

No.LedgerFolio

Amount$

Transfer to General Ledger (Sales Account)

Assignment Questions:Q. 1 Prepare Sales Journal from the following transaction for the month of March 2006.

2006Jan 1 sold goods to Jam $ 10,000Jan 7 Sold goods for cash $ 5,000Jan 9 sold goods to X, 300 Tables @ $ 100 eachJan 15 sold goods to Jill, 100 Chairs @ $ 50 eachJan 20 Bought goods for cash $ 3,000Jan 25 sold goods and received Cash $ 500Jan 30 Sold goods to Anil $ 4,000And post them to the relevant ledgers.

Q. 2 Prepare Sales Journal from the following transactions for the month of February 2006.

2006Feb1 Cash Sales $ 5,000Feb5 Sold goods to Tin, 100 Wall clocks @ $ 100 each less 5% Trade discountFeb7 Sold goods to Sam, 200 Floor mats @ $ 50 eachFeb9 Bought goods from Jill, 150 Tyres @ $ 50 each less 10% Trade discountFeb15 Bought a Motor Van $ 15,000Feb20 Sold goods to George

50 Motor cycles @ $ 10,000 each less Trade discount 10%Feb25 Sold goods to Albert 100 Tape recorders @ $ 500 each less Trade discount 5%Feb27 Cash sales $ 7,000Feb28 Sold goods on Credit to Zet $ 10,000

Post them to concerned ledgers.

Q. 3 Prepare Sales Journal from the following transactions for the month of January 2003:2003January 1 Sold goods on credit to Samson:

200 Tube Lights @ $10 each less 10% trade discount. 4 Sold goods on credit to Anson:

100 Table fans @ $100 each less 20% trade discount. 5 Cash Sales $ 7,000 7 Sold goods to Soson:

Goods costing $4,000 less 25% trade discount 10 Sold a Motor Van $ 15,000

15 Cash sales $5,00018 Credit sales to Alby $2,500 less $ 500 trade discount20 Sold an asset to X for $ 10,00021 Sold goods on credit to Adil agencies 500 Usha Fans @ $150 each

less 10% trade discount 30 Bought goods on credit from Lee $ 1,00031 Credit sales to Samson $4,500 less $500 trade discount.

Q. 4 Prepare the sales journal from the following for the month of March 2002:2002March1 Credit sales to Mohamed:

200 Ball point pens $25 each less 10% trade discount5 Credit sales to Anitha:

1000 reams of white papers @ $50 each ream less 25% trade discount9 Credit sales to Soothy $5,000 less $ 500 trade discount15 Sold goods on credit to Sathya:

400 ruled note books @ $20 each less 25% trade discount24 Credit sales to Milton $4,50031 Sold on credit to Allen goods after deducting trade discount $3000

Post the entries to the ledger accounts on 31st March 2002

Purchase Journal/ Purchase Day Book:For recording the credit purchase of goods only. Cash purchase of goods and

purchase of assets, either on credit or in cash, are not recorded in this journal.

Format of Purchases Journal

Date Name of the Supplier/ (Creditor)

InvoiceNo.

LedgerFolio

Amount$

Transfer to General Ledger (Purchase Account)

Assignment Questions:Q. 1 Write a short note about the Purchases Return Journal.

Q.2. Prepare Purchases Journal from the following transactions for the month of April 2005

2005 April 1Bought goods on credit from Thomas costing $ 15,000April 5 Credit purchases of goods from Jones 700 tables @ $ 50 eachApril 12 Credit purchases of goods from Albert 200 items @ $ 30 eachApril 15 Credit purchases of Furniture from Dave costing $ 7,500April 17 Bought on credit from Gordon 100 beds @ 1250 eachApril 20 Bought on credit from K.King 200 chairs @ $ 250 eachApril 25 Credit purchases from Alexander goods costing $ 30,000April 28 Cash purchases from Roberts $ 15,000Post the items to the concerned ledger account on 30th April 2005.

Q.3 Prepare Purchases Journal from the following transaction for the month of January 2005

2005Jan 1 Bought goods on credit from Peter 200 items @ $ 25 eachJan 4 Cash Purchases of goods from steward $ 40,000Jan 10 Credit purchases of goods from Smith $ 5,000Jan 17 bought on credit from David 400 items @ $ 30 each.Jan 19 bought a motor can on credit from Oliver $ 2,000Jan 20 bought goods on credit from Marshall 100 items @ $ 200 eachJan 25 Credit purchases of goods costing $ 25,000 from Adams.Post the items to the concerned ledger accounts on 31st January 2005.

Q. 4 Prepare Purchase Journal from the following transactions for the month of January 2003:

2003January1 Bought goods on credit from Alwin:

800 Items @ $20 each, less 25% trade discount.4 Bought goods on credit from Alby:

400 items @ $100 each, less 10% trade discount5 Bought goods for Cash $ 5,0007 Bought goods on credit from Amal:

400 items @ $30 each less 33 1/3 % trade discount15 Bought Furniture for $ 10,000

16 Bought goods on credit from Vimal:Goods costing $25,000 less $ 5,000 trade discount

26 Credit purchases of goods from:A.Allen $4,000 less trade discount ¼ of the cost.

28 Purchases goods for cash $ 10,000 30 Bought goods on credit from Adil:

Goods costing $2,000 net of trade discount.

Q. 5 Following are the credit purchases of goods in a business for the month of April 2003

2003 April 1 Bought goods on credit from Bilton:

500 Chairs @ $1,000 each less 15% trade discount 5 Cash purchases $ 2,0007 Bought 50 tables @ $500 each from Albert on credit net of trade

discount14 Bought on credit from Bitson: 100 mattresses at $2,000 each less

25% trade discount.21 Bought on credit from Betsy 100 beds @ $1,500 each less 10%

trade discount 25 Purchases a motor car on credit from X for $ 10,000

29 Credit Purchase from Binu, goods costing $20,000 less $ 2,000 Trade discount

30 Bought goods on credit from Bobby :- 100 fancy chairs @ $500 each less 30 % trade discount.

30 Credit purchases from Bimal $5,600 net of trade discount. 30 Purchased goods for cash $ 2,000

Post the items to the concerned ledger accounts on 30th April 2003Returns Inwards Journal/ Sales Returns Day Book:For recording only the return of goods from the customers.

Format of Sales Returns JournalDate Name of the Customer/

(Debtor)Credit Note

No.LedgerFolio

Amount

Transfer to General Ledger (Sales Returns Account)

Return Outwards Journal/ Purchase Return Day Book : For recording only the return of goods to the suppliers.

Format of Purchase Returns JournalDate Name of the Supplier/

(Creditor)Debit Note

No.LedgerFolio

Amount

Transfer to General Ledger (Purchase Returns Account)

Assignment Questions:Q. 1 Write a short note about the sales return journal.Q. 2 Write a short note about the purchases return journal.Q. 3 How does the sales journal differ from the purchases journal?

Select the correct answer:Q. 4 The number of subsidiary books in accounting are:

(a) Five (b) Two (c) Three (d) Six

Q. 5 The sales ledger contains:(a) only debtors a/c (b) both debtors & Creditors a/c(c) only suppliers a/c (d) none

Q. 6 The debtors ledger contains:(a) customers a/c (b) creditors a/c (c) bankers a/c (d) suppliers a/c

Q. 7 The total of purchases returns day book should be shown in the (a) sales ledger (b) purchase ledger (c) suppliers ledger (d) general ledger

Q. 8 The document which is necessary for making entries in the sales journal is the (a) purchases Invoice (b) voucher (c) sales Invoice (d) none of these

Q. 9 The purchase journal is a(a) day book (b) ledger (c) account (d) none of these

Q. 10 The debit note is a document which is used for making entries in the(a) sales Journal (b) purchases Journal(c) returns Inwards Journal (d) returns Outwards Journal

Q. 11 The sales journal contains a list of(a) cash sales (b) credit sales (c) credit purchases (d) cash purchases.

Q. 12 Asha sold goods on credit to Jisha for $2000 net of trade discount.In which journal will this transaction be recorded by Jisha ?(a) The sales returns journal (b) The purchases book (c) The purchases returns book (d) The cash book

Q. 13 The credit note number column is provided in the(a) sales book (b) sales returns book (c) purchases returns book (d) purchases book.

Q. 14 The total of sales returns book is transferred to the(a) debit side of the sales A/C in the general ledger(b) credit side of the sales A/C in the sales ledger(c) credit side of the sales A/C in the general ledger(d) none of these.

Q. 15 The proper journal is the other name of the (a) general ledger (b) general journal(c) sales journal (d) sales ledger

Q. 16 In which book is the debit note number column shown?(a) Returns inwards book (b) Returns outwards book(c) General journal (d) None of these

Q. 17 Goods are returned to Anil by Sunil. In which book will Sunil record this transaction? (a) Sales journal (b) Returns inwards book(c) Returns outwards book (d) General journal

Q. 18 Anil sold the following goods to one of his customers on credit.200 sets of door mats @ $200 each less 25% trade discount.100 mattress @$ 250 each, no trade discount What is the amount with which Anil will record this transaction?(a) $50000 (b) $53000 (c) $ 55000 (d) $ 58000

Q. 19 Which of the following is wrong?(a) The sales journal is a book of original entry(b) Cash sales of goods are recorded in the cash book.(c) Capital is the difference between fixed assets & current assets.(d) The purchases book is for recording credit purchase of goods on

Q. 20 Which of the following is correct ?(a) Purchases of assets are recorded in the sales book (b) Sale of goods on credit are recorded in the cash book.(c) Current assets are also known as circulating assets.(d) Return of goods to the suppliers are recorded in the sales returns book

Q. 21 The journal is aa) part of the double entry systemb) part of the cash bookc) not a part of the double entry systemd) none of the above.

Q. 22 A credit note issued by us will be entered in thea) returns outwards a/c b) returns Inwards a/cc) purchases a/c d) sales a/c

Q. 23 A firm sells goods on credit. Which document does the firm use to record this?a) Purchases invoice b )Sales invoicec) Credit note d) Debit note

Q. 24 A firm buys goods on credit.Which document does the firm use to record this transaction?a) Credit note b) Debit notec) Purchase invoice d) Sales invoice

Q. 25 Mr. M sends back $ 900 of faulty goods to Mr. N.In which book of prime entry would Mr. N record this transaction?a) The general journal b) The purchase return journalc) The sales return journal d) The sales journal

Q. 26 A book keeper discovers that an amount paid to a supplier has not been entered in the books of accounts. In which book of account should enter this?

a) Purchase ledgerb) Creditors ledgerc) General ledgerd) None of the above.

Q. 27 Fill in the following with the most suitable terms

1) Book of original entry is the other name for ----------------------------.2) In the purchases journal, the names of --------------- are shown.3) The journal for recording returns of goods to the suppliers is ----------------4) The reduction allowed by the supplier from the list price of the goods is

known as ----------- ------------------.5) The general journal is also known as ---------------------------.6) The debtors ledger is also known as -------------------.

7) ------------------ is the book in which a transaction is recorded first.8) The purchase ledger contains the accounts of --------------------.9) The debtors ledger contains the accounts of ----------------------.10) The sales day book records all ------------- ------------- --- -------------11) The goods returned by customers into the business are recorded in the --------------------- --------------------- book.12) The credit purchase of an asset is shown in the --------------------------

journal.13) Credit sales of goods are recorded in the --------------------------- journal.14) The total of the returns inwards journal is transferred to the ----------------

side of --------------- a/c in the general ledger.15) The total of the purchases journal is transferred to the -------------- side of

the purchase a/c in the ---------------------- ----------------------.16) Asset accounts are shown in the -------------------------- ledger.17) In book keeping there are ------------------- subsidiary books.18) The general ledger is also known as -------------------------------------.

Q. 28 Prepare the returns inwards and returns outwards journals from the following for the month of March 2002:-2002 March

1 Returned goods to Mathew $ 2504 Rinu returned goods to us $ 4508 Returned goods to Sojan $100015 Received goods returned by Sunil $80021 Returns outwards to Minu $50031 Returns inwards from Tinu $700

Show the postings to the ledger accounts on 31st March 2002

Q. 29 Prepare returns inwards journal and returns outwards journal form the followingtransactions for the month of November, 2002:- 2002 Nov 1 Returns inwards from Sanal $ 250 4 Returned to Amal, goods at list price $3000 less 20% trade discount. 7 Goods returned to Manu $ 600 list price, less 10% trade discount. 9 Bhimal returned goods at net of trade discount $ 450 15 Adil returned goods to us $ 200 19 Goods returned to Sunil $ 300 25 Returns outwards to Samuel $ 500 30 Returns inwards from Excell $ 1500Show the postings to the ledger accounts on 30th Nov 2002

Q. 30 The following transactions have been taken from the books of a business 2003

January1 Credit sales to K. Ball: 400 items @ $25 each, less 25% trade discount.4 Credit purchases from M. Muthu 400 items @ $50 each

less 20% trade discount 6 Returns inwards from K. Ball 20 items (out of sales on 1st Jan)

7 Returns outwards to M. Muthu: 40 items (out of purchases on 4th Jan)10 Credit sales to P.Poter 1,000 items @ $40 each less 10% trade discount.13 Credit Purchases from T. Terry 300 items @ $30 each

less 25% trade discount.14 Returns inwards from P.Poter: 100 items (out of goods sold on 10th

January)15 Returns outwards to T.Terry 100 items (out of goods bought from him

on 13th Jan.)18 Credit sales to L.Lane $3,500 net of trade discount.20 Credit purchases from S.Sita $7,000 net of trade discount.24 Credit sales to K. Ball $10,000 less $1,000 trade discount25 Credit purchases from M.Muthu $12,000 less trade discount ¼th of cost26 Returns inwards from L Lane $500 net of trade discount.27 Returns outwards to S.Sita $1,500 net of trade discount.28 Credit sales to P.Poter list price $ 8,000 less 20% trade discount.31 Credit purchases from T.Terry list price $ 4,000 less trade discount 10%Prepare appropriate journals for recording the above transactions for the month

of January 2003 and show the postings to the ledger on 31st Jan 2003.

Q. 31 The following information is related to the business of Ken 2002 March1 Credit sales to Mathew $2,000 less $200 trade discount2 Credit sales to David 200 items @ $20 each less 10% trade discount.4 Credit purchases from Sunil 300 items @ $10 each less 20% trade

discount.5 Credit Purchase from Sajan 400 items @ $25 each less 10% trade

discount7 Returns inwards from Mathew $90 net of trade discount.9 Returns outwards to David 10 items @ $ 20 each

less 10% trade discount.12 Credit sales to Minu 500 items @ $50 each less 25% trade discount.15 Credit purchases from Sunan $5,000 net of trade discount.18 Returns inwards from Minu 100 items @ $50 each less 25% trade

discount.23 Returns outwards to Sunan $500 net of trade discount.24 Credit sales to Naadhan $15,000 less $2,500 trade discount26 Credit purchases from Sudha $10,000 less 10% trade discount28 Returns inwards from Naadhan $1,000 less $ 250 trade discount

31 Returns outwards to Sudha $1,000 less 10% trade discount.

Record the above transactions in the appropriate journals and post them to the ledger accounts on 31st March 2002.

Q. 32 The following transactions are taken from the books of a sole trader for the month of January 2003 2003 January

1 Credit sales to Nisha:20 sets of tube lights @ $100 each30 table fans @ $300 each. Less 25% trade discount

4 Bought on credit from Asha:100 colour television sets @ $1,000 each200 table lamps @ $100 each. All less 20% trade discount

9 Returned goods by Nisha:10 table fans of wrong colour (sold on 1st January)

15 Returned to Asha 10 colour televisions (bought on 4th January)20 Credit sales to Jisha:

300 radios @ $ 400 each. Less 10% trade discount150 sets of tube lights @ $100 each. No trade discount.

24 Bought on credit from Usha:200 clocks @ $ 200 each, 50 table lamps @ $150 each.No trade discount.

26 Returns inwards from Jisha 30 radios (out of sales on 20th January)31 Returned to Usha 5 clocks (out of purchase on 24th January)You are required to prepare the necessary journals and post the entries to the ledger accounts for the month of January 2003

Q. 33 Prepare: a) the purchases journalb) the sales journalc) the purchase return journald) the sales return journal

for the month of July 2002 from the following transactions2002 July1 Credit purchase from Jackson:

1,000 clocks @ $210 each; 500 tape recorders @ $300 each. Less 331/3 % cash discount

7 Cash purchases from Jack:700 table fans @ $200 each, 100 computer tables @ $150 each.Less 10% trade discount and 20% cash discount.

9 Sold goods on credit to Azleefa:200 tape recorders @ $350 each and 20 table fans @ $250 eachLess trade discount 25% and cash discount 10%

11 Credit sales to Arifa:250 table fans @ $260 each, 300 clocks @ $240 each.

Less 20% trade discount; 331/3 % cash discount.14 Returned 20 table fans to Jack which were purchased on 07th July 200216 Azleefa returned 15 tape recorders and 5 table fans21 Cash sales to Majeedha:

50 computer tables @ $180 each, 40 tape recorders @ $360 each200 clocks @ $300 each. No trade discount.

25 Arifa returned $700 net of trade discount worth of goods to us.27 Bought on credit from Firuza:

90 table lamps @ $ 200 each. Less 5% trade discount and 10% cash discount

28 Returned $300 net of trade discount value of goods to Firuza29 Credit purchases from Nasreena $7,100 net of trade discount30 Bought motor car on credit from Neema for $8,00031 Sold goods for $ 6,190 to Zulfa on credit net of trade discount.

Q. 34 The following transactions are occurred in the business of Gilberth , a sole traderfor the month of 2003 January:-

2003 Jan. 1 Sold goods on credit to A.Allen:- 200 dozen red pens @ $ 60 per dozen

50 pairs of shoes @ $150 eachLess 20% trade discount

4 Bought goods on credit from B.Bill:-400 rulers @ $ 10 ea ; 50 dozen pencils @ $5 eachLess $ 100 trade discount

12 Returns inwards from A.Allen 10 pairs of damaged shoes 18 Returns outwards to B.Bill: 50 broken rulers 24 Sold on credit to C.Clint:

1000 staplers @ $20 each less 10% Trade discount500 erasers @ $5 each, no trade discount

28 Returns inwards from C.Clint : 100 staplers not up to the standard 29 Bought on credit from D.Darling

250 ball point pens @ $15each less 20% trade discount100 dozen pencils @ $ 5 each less 10% trade discount

31 Returns outwards to D.Darling: 25 ball point pensYou are required to prepare the necessary journals for recording the above transactions for the month of January 2003 and show the postings to the ledgeraccounts on 31st January 2003

Q. 35 The following transactions are occurred in the books of a sole trader for the month

of December, 2002:-2002 Dec 1 Credit sales to Mahesh 2000 items @ $ 10 each less 20% trade discount. 3 Credit purchases from Mann 400 items @ $ 25 each, less 25% trade

discount. 5 Credit purchases from Mathew $20000, less 25% trade discount 7 Credit sales to Martin 600 items @ $ 50 each, less 5% trade discount 8 Returns inwards from Mahesh 100 items @ $10 each less 20 % trade

discount 10 Returns outwards to Mann: 50 items @ $ 25 each, less 25% trade

discount. 12 Returns outwards to Mathew $ 5000 less 25% trade discount 14 Returns inwards from Martin: 25 items @ $ 50 each, less 5% trade

discount. 18 Credit purchases from Manju $ 8000, net of trade discount. 20 Credit sales to Mithun $ 6000 less $600 trade discount. 24 Returns outwards to Manju $2000, net of trade discount. 26 Returns inwards from Mothun $1000, less $ 60 trade discount. 29 Credit purchase from Manu $ 4000 30 Credit sales to Mahesh 500 items @ $10 each, less $500 trade discount

You are required to prepare the appropriate journals for recording the above transactions for the month of December 2002 and show the transfer of entries to the concerned ledger accounts