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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Identify journals

Assuming the use of a two-column (all-purpose) general journal, a revenue journal, and a cash receipts journal as illustrated in this chapter, indicate the journal in which each of the following transactions should be recorded:

a. Closing of drawing account at the end of the year.

b. Providing services for cash.

c. Sale of office supplies on account, at cost, to a neighboring business.

d. Receipt of cash from sale of office equipment.

e. Receipt of cash for rent.

f. Receipt of cash on account from a customer.

g. Providing services on account.

h. Investment of additional cash in the business by the owner.

i. Receipt of cash refund from overpayment of taxes.

j. Adjustment to record accrued salaries at the end of the year.

To determine

Journal:

Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Revenue journal:

Revenue journal refers to the journal that is used to record all revenues on account. In the Revenue journal, all Revenue transactions are recorded only when the business sold the goods and rendered the services on account. For example, the business sold furniture on account.

Cash receipts journal:

Cash receipts journal refers to the journal that is used to record the all transaction which involves the cash receipts. For example, the business received cash from customers.

To identify: The types of journal for the given transactions.

Explanation

(b), (d), (e), (f), (h), (i) – Cash receipt journal:

In this case (a) providing services for cash (d) receipt of cash from sale of office equipment (e) receipt of cash for rent (f) receipt of cash from customer (h) Investment of additional cash in the business by the owner (i) receipt of cash refund from overpayment of taxes and are cash receipt journal, because all these transactions are involved in cash. Hence, these transactions come under cash receipt journal...

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