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In which book of original entry, will you record the following transactions?
Q.Purchases day book records:
- a)All cash purchases.
- b)All credit purchases
- c)Credit purchases of goods in trade.
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
In which book of original entry, will you record the following transac...
The correct book of original entry to record the given transactions is the "Credit Purchases Day Book".
Explanation:
The Credit Purchases Day Book is a subsidiary book used in double-entry bookkeeping to record all credit purchases of goods in trade. It is a chronological record of all credit purchases made by the business.
Let's break down the options given in the question and see why option 'C' is the correct answer:
a) All cash purchases: Cash purchases are not recorded in the Credit Purchases Day Book because this book specifically deals with credit transactions. Cash purchases would be recorded in the Cash Book or the Purchases Day Book.
b) All credit purchases: While it is true that the Credit Purchases Day Book records credit purchases, this option is not entirely correct as it is too broad. The Credit Purchases Day Book specifically focuses on credit purchases of goods in trade, as mentioned in option 'C'.
c) Credit purchases of goods in trade: This option is the correct answer. The Credit Purchases Day Book is used to record credit purchases of goods that are intended for resale. These purchases are made on credit from suppliers or vendors and are typically meant to be sold to customers.
d) None of the above: This option is incorrect as the correct answer has already been determined to be option 'C'.
Summary:
The Credit Purchases Day Book is the book of original entry where credit purchases of goods in trade are recorded. It provides a detailed record of credit purchases made by the business and helps in tracking and managing accounts payable.
Explanation:
The Credit Purchases Day Book is a subsidiary book used in double-entry bookkeeping to record all credit purchases of goods in trade. It is a chronological record of all credit purchases made by the business.
Let's break down the options given in the question and see why option 'C' is the correct answer:
a) All cash purchases: Cash purchases are not recorded in the Credit Purchases Day Book because this book specifically deals with credit transactions. Cash purchases would be recorded in the Cash Book or the Purchases Day Book.
b) All credit purchases: While it is true that the Credit Purchases Day Book records credit purchases, this option is not entirely correct as it is too broad. The Credit Purchases Day Book specifically focuses on credit purchases of goods in trade, as mentioned in option 'C'.
c) Credit purchases of goods in trade: This option is the correct answer. The Credit Purchases Day Book is used to record credit purchases of goods that are intended for resale. These purchases are made on credit from suppliers or vendors and are typically meant to be sold to customers.
d) None of the above: This option is incorrect as the correct answer has already been determined to be option 'C'.
Summary:
The Credit Purchases Day Book is the book of original entry where credit purchases of goods in trade are recorded. It provides a detailed record of credit purchases made by the business and helps in tracking and managing accounts payable.
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In which book of original entry, will you record the following transactions?Q.Purchases day book records:a)All cash purchases.b)All credit purchasesc)Credit purchases of goods in trade.d)None of the aboveCorrect answer is option 'C'. Can you explain this answer?
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