A small amount of goods are not sold on account. Where are these sales posted? A....

A small amount of goods are not sold on account. Where are these sales posted?
A. purchases journal
B. sales journal
C. cash disbursement journal
D. cash receipts journal

Solutions

Expert Solution

The given question pertains to the recording of sales made on cash basis (not sold on account).
As we are aware that Sales is a major and vital part of reporting correct posting of it is required.

The subsidiary books mentioned here for given transactions and the reason of posting/ not posting in it are as follows :

1. Purchase Journal - It records only those transactions of purchases, which are affected on credit basis. Hence, this is not the right journal book for recording the transaction.

2. Sales Journal - It records only those transactions of sales, which are affected on credit basis. Since, the sale is not affected on account (credit) the transaction cannot be recorded in this journal as well.

3. Cash Disbursement Journal - It records all the transactions which involve cash outflow, i.e. it is a debit side of your cash account. Since, here we are considering cash sales and we are on the receiving end (of cash) and not expending, hence, the entry shall not be made in this ledger.

4. Cash Receipts Journal : It records all the transactions which involve cash inflow, in other words it is the credit side of your cash account. The said entry shall be made in this journal as we are receiving cash for the sales affected.

Therefore, the correct answer is D.

ekkarill92 answered 1 year ago

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