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Postage stamps purchased for Rs. 30 by business. This transaction will be recorded in:
- a)Purchase book
- b)Cash Book
- c)Petty Cash Book
- d)Journal
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Postage stamps purchased for Rs. 30 by business. This transaction will...
Transaction recorded in Petty Cash Book
Petty Cash Book is used to record small cash transactions of a business. In this case, the purchase of postage stamps for Rs. 30 is a small cash transaction that can be easily recorded in the Petty Cash Book.
Explanation:
- Petty Cash Book: As mentioned earlier, Petty Cash Book is used to record small cash transactions. It is maintained by the person responsible for handling petty cash in the business. It contains columns for date, particulars, voucher number, amount, and balance.
- Purchase Book: Purchase Book is used to record credit purchases of goods. Since the transaction in question involves cash purchase of postage stamps, it cannot be recorded in the Purchase Book.
- Cash Book: Cash Book is used to record all cash transactions of a business. However, Petty Cash transactions are not recorded in the Cash Book as they are recorded separately in the Petty Cash Book.
- Journal: Journal is used to record all non-cash transactions of a business. Since the transaction in question involves cash purchase, it cannot be recorded in the Journal.
Conclusion:
Since the transaction involves a small cash purchase, it can be easily recorded in the Petty Cash Book. Petty Cash Book is a subsidiary book of accounts that helps in maintaining proper records of small cash transactions.
Petty Cash Book is used to record small cash transactions of a business. In this case, the purchase of postage stamps for Rs. 30 is a small cash transaction that can be easily recorded in the Petty Cash Book.
Explanation:
- Petty Cash Book: As mentioned earlier, Petty Cash Book is used to record small cash transactions. It is maintained by the person responsible for handling petty cash in the business. It contains columns for date, particulars, voucher number, amount, and balance.
- Purchase Book: Purchase Book is used to record credit purchases of goods. Since the transaction in question involves cash purchase of postage stamps, it cannot be recorded in the Purchase Book.
- Cash Book: Cash Book is used to record all cash transactions of a business. However, Petty Cash transactions are not recorded in the Cash Book as they are recorded separately in the Petty Cash Book.
- Journal: Journal is used to record all non-cash transactions of a business. Since the transaction in question involves cash purchase, it cannot be recorded in the Journal.
Conclusion:
Since the transaction involves a small cash purchase, it can be easily recorded in the Petty Cash Book. Petty Cash Book is a subsidiary book of accounts that helps in maintaining proper records of small cash transactions.
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Community Answer
Postage stamps purchased for Rs. 30 by business. This transaction will...
Purchase of postage stamps in business is considered as day-to-day expenses and these are of very small amounts because of this these are also known as petty expenses and are recorded in petty cash book.
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Postage stamps purchased for Rs. 30 by business. This transaction will be recorded in:a)Purchase bookb)Cash Bookc)Petty Cash Bookd)JournalCorrect answer is option 'C'. Can you explain this answer?
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