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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Which of the following is an advantage of the cash payments journal?

  1. a. It provides notification of early payment.
  2. b. Transactions do not have to be posted on a regular basis.
  3. c. Purchases and payments are recorded in the same place.
  4. d. Transactions involving credits to Cash are recorded in one place.
  5. e. None of the above.

To determine

Identify the correct option given as an advantage of the cash payments journal.

Explanation

Cash payments journal is the special journal entry used to record all the transactions in which cash goes out or decreases in the cash account. In the cash payment journal the transaction which credit the cash must be recorded. This cash payment journal may be used for the service or merchandising business.

Advantages of cash payment journal:

The advantages of the cash payment journal are given below.

  • In the cash payment journal transactions are generally recorded in one line.
  • In the same place itself all the transactions involving credits to cash are recorded in the cash payment journal.
  • Cash account credit side can be posted as one total in the general ledger while there is more number of transactions involving cash credits.
  • Special columns can be used for the similar transaction occurred and show it as one total...

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