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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

LO1 The types of special journals a business uses should depend on the types of transactions it has most frequently.

To determine

Identify whether the given statement is true or false.

Answer

True

Explanation

Special journal: It is a book which records some specific kinds of transactions such as cash receipts, cash payments, credit sales, and credit purchases. Special journal is created for any kind of transaction. A business uses special journals depending on the types of transactions that occur most repeatedly. If a specific type of transactions occur often, it is more likely a special journal of that type would be beneficial for the business.

The major advantages of the use of special journals:

  • It helps to saving the record-keeping expenses, because it is used to record the single kind of transaction. For example, the business has many transactions in which cash is paid out for that the business will likely to use a special journal for recording cash payments.
  • It helps to reduce the record-keeping errors because it records a single kind of transaction which helps to identify the errors.

Hence, the given statement is true.

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