Question

Duckstein Ltd uses special journals and a general journal. The following transactions occurred during September 2017.

Sept. 2. Sold inventory on account to R. Crow, invoice no. 101 for $960, terms n/30. The cost of the inventory sold was $600.

Sept 10. Purchased inventory on credit from L. Dayne $1200, terms 2/7, n/30.

Sept 12. Purchased of ce equipment on account from B. Piazza $13 000.

Sep 21. Sold inventory on account to Buffy Ltd, invoice no. 102 for $1600, terms 2/14, n/30. The cost of the inventory sold was $960.

Sept 25. Purchased inventory on account from F. Sage $1800, terms n/30. 27 Sold inventory to Harold Ltd for $1400 cash. The cost of the inventory sold was $840.

Required

(a) Draw up a sales journal (see gure 6A.3, p. 360) and a single-column purchase journal (see gure 6A.7, p. 365). (Use page 1 for each journal.)

(b) Record the transaction(s) for September that should be journalised in the sales journal and the purchases journal.

(c) What is the advantage of having a multicolumn purchases journal as opposed to a single-column purchases journal?

Answer 1

Ans - (a) and (b)

Note: Cost of Inventory sold not to be part of these journals but shall berecorded in Proper Journals.

Cash Sales of Inventory to Harold Ltd not to be recorded in Sales Journal but in Cash Receipt Journal.

Ans: (C)

In case of multi column purchase journal advantage is that a clear cut seggregation of purchases between merchandise , Supplies , Equipment etc is readily available.Subsequent posting information is readily available as seggregated and process becomes easier.