Week 4

Question 1

1.Identify six books of prime entry

Answer 1

Books of prime entry
Journal
Cash book
Sales day book
Purchase day book
Sales return day book
Purchase return day book

Question 2

Why are transactions not simply entered directly into ledger account?

Answer 2

Day book contains full detail of each transaction: Ledger accounts merely a summary, thus avoiding unnecessary detail in ledger.
Records information immediately the transaction occurs: Ledger accounts may be written up retrospectively.

Question 3

Purchase day book

Answer 3

Purchase ledger : credit -> General Ledger : debit

Question 4

Sales day book

Answer 4

Sales ledger: debit -> General Ledger: credit

Question 5

Purchase returns day book

Answer 5

Purchases returns: credit -> General Ledger: debit

Question 6

Sales returns day book

Answer 6

sales returns : debit -> general ledger : credit

Question 7

Under why books of prime/original entry are used in an accounting system

Answer 7

If ledgers were updated each time a transaction occurred, the ledger accounts would quickly become cluttered and errors might be made. To avoid this, all transactions are initially recorded in a book of prime entry.