Subsidiary Books - 1 - Free MCQ Practice Test with solutions, SSC CGL

The rectifying entry will be made in Journal proper to rectify the error of posting in wrong account.

A document sent to customer when he returns the goods is called Credit note. A credit note or credit memo is a commercial document issued by a seller to a buyer.

To determine the balance transferred from the Sales day book, we need to consider the following information:
1. The initial balance of the Sales day book is Rs. 25,000.
2. Rs. 5,000 were recovered from debtors.
To find the balance transferred, we can use the following formula:
Balance Transferred = Initial Balance + Recovered Amount
Now let's calculate the balance transferred:
Balance Transferred = Rs. 25,000 + Rs. 5,000 = Rs. 30,000
Therefore, the correct answer is Rs. 30,000.

Subsidiary Books are those books of original entry in which transactions of similar nature are recorded at one place and in chronological order. In a big concern, recording of all transactions in one Journal and posting them into various ledger accounts will be very difficult and involve a lot of clerical work.

The shop owner gives discount due early payment and it is a cash transaction so it is recorded in cash book.

Sales Book records only credit sale of goods to the customers. When goods are sold, invoices are sent out to them and that only becomes the source document or voucher for recording transaction in sale book.

Sales book is a subsidiary book that records all the credit sales of the goods. It is totalled normally on a monthly basis and the total will be posted to the credit side of  the Sales A/c. The total of the Sales book is not entered but posted to the Sales A/c because it is transferred from the sales book.

A purchase returns journal (also known as returns outwards journal/purchase debits daybook) is a prime entry book or a daybook which is used to record purchase returns. In other words, it is the journal which is used to record the goods which are returned to the suppliers.

To determine the amount to be credited to the Sales Account, we need to calculate the sales tax first.
Given:
Goods sold for cash = Rs. 10,000
Sales tax rate = 10%
Step 1: Calculate the sales tax amount
Sales tax amount = (10% of Rs. 10,000)
Sales tax amount = (10/100) * 10,000
Sales tax amount = Rs. 1,000
Step 2: Calculate the total amount including sales tax
Total amount = Goods sold for cash + Sales tax amount
Total amount = Rs. 10,000 + Rs. 1,000
Total amount = Rs. 11,000
Therefore, the Sales Account will be credited by Rs. 11,000.
Answer: b. Rs. 11,000

Purchase Day book (Purchase Register)is the book of original entry in which all the transactions relating to only credit purchase are recorded. Cash purchases do not find place in purchase day book as they are recorded in Cash book.The every month total of purchase is to be posted on the debit side of the purchase account.

Purchase book records credit purchases of goods only. Whenever, goods are purchased, purchase account is debited. In all cases of purchases, goods come into business, so purchases account has to be debited. Monthly total of purchases book is posted to the debit of purchases account in the ledger.

Purchase book is an accounting ledger in which all credit purchase of trading goods are recorded. Two most important requirement for recording entry in purchase book are:
1. Purchase must be on credit
2. Purchase must be of trading goods.
Therefore, in the given question credit purchase of stationery will be recorded in purchase book. as the purchaser deals in stationery.

Purchase of furniture is not for the trading purposes hence furniture cannot be included as goods and recorded in purchase book. Since the purchases are made on credit hence they cannot be entered in the cash book. Therefore, purchase of furniture will be recorded in journal.

Purchase return day book is also called as Purchase return book or Purchase return journal or Purchase return register. All purchase return vouchers are recorded in purchase return day book. The totals of purchase returns book is posted to the ledger on credit side of the Purchases return A/c.

A journal proper is the book of original entry in which only those entries are recorded that cannot be recorded in the special journal. It is also termed as a General Journal. When the journal is divided into various subsidiary books, it remains only a residuary book in which only those transactions are recorded that cannot be recorded in any other subsidiary book. In such a case, the journal is called as Journal proper. Purchase of asset on credit can neither be recorded in the cash book or the purchase book because cash book only records cash transactions and purchase book only records the credit purchase of goods. Thus purchase and sale or return of purchased or sale asset on credit is recorded in journal proper. In our question a second hand motor car is purchased on credit which is fixed asset hence, it will be recorded in Journal proper.

Purchase returns book is maintained to record the transactions of goods returned to the supplier which were purchased on credit.
Whenever, such purchases are to be returned a debit note is issued by a seller as an advise of the amount of returns by the buyer with the complete details of the purchases to be returned.

Sales book is a subsidiary book that records all the credit sales of the goods. It is totalled normally on a monthly basis and the total will be posted to the credit side of  the Sales A/c. The total of the Sales book is not entered but posted to the Sales A/c because it is transferred from the sales book.

Purchase of fixed assets on credit is originally recorded in Journal Proper. On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset.

Buyer of goods is customer from the point of view of business. In his books our account balance would show a credit balance. When he returns the goods to us, he debits our account and to show this fact he sends a debit note to us indicating the above fact.

Purchase book also known as purchase journal is an accounting ledger in which all credit purchases of trading goods are recorded.

A Sales book is a record of all credit sales made by a business. 
It is one of the secondary book of accounts, and unlike cash sales, which are recorded in cash book, sales book is only prepared to record credit sales. 
The amount entered in the sales book is on behalf of invoices supplied to purchasers. 
A Sales book is also called Sales Journal or Sales Day Book.

Trade discount is not recorded in books because trade discount is given only to traders. And this happens between the wholesalers and retails.
whereas cash discount is recorded in books because it is given on the products which is given by the retailers to the consumers.
for eg- if a retailer buys goods from wholesalers then,if,the wholesaler provide/give any discount on the products which the retailer bought. then this kind of discount is called trade discount.

A purchase book records only all credit purchases of goods and trade. Cash purchases are recorded via the cash book while the credit purchase of an asset is recorded via a journal entry.

A Sales book is a record of all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales. The amount entered in the sales book is on behalf of invoices supplied to purchasers. A Sales book is also called Sales Journal or Sales Day Book.

When goods are returned, a debit note is prepared and is sent to the supplier with the returned goods. An original copy is sent to the supplier, informing him of the amount for which his account has been debited on account of the returned goods. A duplicate copy of the debit note becomes the source document, on the source document, on the basis of which entries are recorded in the Purchases Returned Book. Thus, a debit note is required for recording the transactions in the Purchases Return Book.