Question

Fiona Sporty uses a purchases journal, a cash payments journal, a sales journal, a cash receipts journal and a general journal. Indicate in which journals the following transactions are most likely to be recorded. a) Purchased inventories on credit b) Sales of inventory on credit c) Received payment of a customer’s account d) Payment of monthly rent by cheque e) End of period closing entries

Answer 1

Transaction	Journal	Reason
Purchased Inventories on credit	Purchase Journal	For recording the credit purchase Purchase journal is used.
Sales of Inventories on credit	Sales Journal	For recording the credit sales Sales journal is used.
Received payment of a customer's Account	Cash Receipts Journal	Receiving of payment from receivables are recorded in Cash Receipts Journal.
Payment of Monthly rent by cheque	Cash Payments Journal	Payment by cheque is treated as a cash payment, therefore payment through cheque are recorded in Cash Payment Journal.
End of period closing entries	General Journal	All Opening, Closing, Adjustment, Transfer entries are recoreded through General Journal.