Question

 A company entered into the following transactions. Match each transaction with the appropriate journal.

 S- Sales Journal

 P- Purchase Journal

 R- Cash Receipts Journal

 D- Cash Disbursements Journal

 G- General Journal

 1. Returned defective inventory that we had purchased on account that had cost $4,800.

 2. A customer returned a $2,000 item he had purchased on account.

 3. Paid $44,000 in wages and salaries in regular payroll.

 4. Purchased a display rack on account for $2,600.

 5. The owner invested $15,000 cash into the business.

 6. Sold $6,200 of merchandise on credit. The merchandise has a cost of $5,000.

 7. Purchased merchandise on account for $6,400.

 8. Wrote a check in the amount of $2,800 to pay the utility bill.

 9. Recorded cash sales of $1,300.

 10. Recorded an adjusting entry for depreciation of $6,000 on store equipment.

Answer 1

S - Sales Journal - includes all transaction with regard to sale. Eg - Sale of goods on credit (on account) and cash basis, return of sold goods.

P - Purchase Journal - includes all transaction with regard to purchases. Eg - Purchase of goods on account and cash basis, return of purchased goods due to defects.

R - Cash Receipts Journal - journal for transactions exclusively for receipt of cash (withdrawal from bank, collection from debtor, infusion of capital etc could also be from sales, purchase returns,)

D - Cash Disbursements Journal - journal to record cash payments such as payment of wages, settlement of creditors, payment of expenses, repayment of loan etc

G - General Journal - journal used to record other general transactions or to make transfer/adjusting entries. eg - depreciation entry, deffered tax etc

As per above, the transaction from 1 to 10 can be classified as follows -

1 - P (Purchase return)

2 - S (Sales return)

3 - D (Wages paid in cash)

4 - G (even though it is purchase, it is not purchase of merchandise but an asset therefore it would not form part of purchase journal)

5 - R (Infusion of capital in cash)

6 - S (Sales)

7 - P (Purchases)

8 - G (payment through bank, not a cash payment )

9 - S (primarily cash is received for selling hence forming part of sales journal)

10 - G (finalisation/adjusting entry)