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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

Purchases on account of merchandise for resale would be recorded in the _______________.

  1. a. Sales journal
  2. b. Purchases journal
  3. c. Cash receipts journal
  4. d. Cash payments journal
  5. e. None of the above

To determine

Identify the journal under which the purchases on account of merchandise for resale will be recorded.

Explanation

Purchase journal:

It is a special journal that is used to record the purchase of merchandise that is purchased on account for resale only.

Justification for the incorrect answer:

Option a:

Sales journal is one form of special journal book, which records all the sales transactions that are sold to customers on credit. In a single column sales journal, debit aspect of accounts receivable and credit aspect of inventory are recorded, and then posted to individual subsidiary customer account.

Option c:

It is a special book where only cash receipts transactions that are received from customers, merchandise sales and service made in cash and collection of accounts receivable are recorded.

Option d:

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...

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