Question

Required: Consider the following transactions. In the blank column beside the transaction, identify the journal it should be recorded in.

Use:

·         S...... for Sales Journal

·         P...... for Purchases Journal

·         CR.... for Cash Receipts Journal

·         CD.... for Cash Disbursements Journal

·         G.... for General Journal

Dec 1	Purchased merchandise on credit (terms 2/10, n/30).
Dec 2	The owner of the business invested some office furniture into the business.
Dec 3	Sold merchandise on account (terms 2/10, n/30).
Dec 4	The owner invested cash in the business.
Dec 5	A customer returned defective merchandise (from Dec 3 transaction) which was then scrapped.
Dec 6	Gave a customer a credit memo for an allowance on a prior sale.
Dec 7	Received and paid the telephone bill.
Dec 8	Received a credit memorandum from a supplier granting us an allowance on a previous purchase of merchandise.
Dec 9	Received payment from a customer.
Dec 10	Accrued interest revenue.
Dec 11	Paid the balance owing on a purchase (from Dec 1).
Dec 12	Borrowed money from the bank.
Dec 13	Sold old office equipment for cash.
Dec 14	Purchased office supplies on credit.
Dec 15	Paid salaries.
Dec 16	Sold merchandise and received cash.
Dec 17	Prepared closing entries.
Dec 18	Paid cash for merchandise.
Dec 19	Received a credit memorandum from a supplier when defective merchandise was returned.
Dec 20	Performed services on account.

Answer 1

(1)

sales journal is used to record credit sales of the company. the journal entry to record credit sales is

accounts receivable account (debit)

sales/revenue account (credit)

(2)

purchase journal is used to record credit purchases during a period of time for a company. the journal entry to record credit purchases is

purchases/inventory account (debit)

accounts payable account (credit)

(3)

cash receipt journal is used to record journal entries related to cash sales and any cash received during a period of time. the journal entry to record cash sales is:

cash account (debit)

sales/revenue account (credit)

(4)

cash disbursement journal is used to record journal entries related to cash purchases and cash payments during a given period of time. The journal entry to record cash purchases is:

purchases/inventory account (debit)

cash account (credit)

(5)

General journal is a journal which is used to record transactions relating to adjustment entries, opening stock, accounting errors capital investment etc.

Dec 1	Purchased merchandise on credit (terms 2/10, n/30).	Purchase journal as it is credit purchases
Dec 2	The owner of the business invested some office furniture into the business.	general journal is used.
Dec 3	Sold merchandise on account (terms 2/10, n/30).	sales journal as it is credit sales.
Dec 4	The owner invested cash in the business.	cash receipt journal is used as cash is received.
Dec 5	A customer returned defective merchandise (from Dec 3 transaction) which was then scrapped.	general journal will be used.
Dec 6	Gave a customer a credit memo for an allowance on a prior sale.	general journal is used to reduce the total receivable for a customer.
Dec 7	Received and paid the telephone bill.	cash disbursement journal is used to record the transaction.
Dec 8	Received a credit memorandum from a supplier granting us an allowance on a previous purchase of merchandise.	general journal is used to record the transaction. the accounts payable is reduced.
Dec 9	Received payment from a customer.	cash receipt journal will be used.
Dec 10	Accrued interest revenue.	general journal is used because interest is accrued but cash is not received.
Dec 11	Paid the balance owing on a purchase (from Dec 1).	cash disbursement journal will be used as cash is being paid.
Dec 12	Borrowed money from the bank.	cash receipt journal will be used as cash is received.
Dec 13	Sold old office equipment for cash.	cash receipt journal will be used as cash is received.
Dec 14	Purchased office supplies on credit.	purchase journal is used
Dec 15	Paid salaries.	cash disbursement journal is used.
Dec 16	Sold merchandise and received cash.	cash receipt journal is used.
Dec 17	Prepared closing entries.	general journal is used.
Dec 18	Paid cash for merchandise.	cash disbursement journal is used.
Dec 19	Received a credit memorandum from a supplier when defective merchandise was returned.	general journal is used.
Dec 20	Performed services on account. (sales journal is used.)