Topic 6: Journals

Question 1

1. What are Journals?

Answer 1

A Journal is where accounting information is first recorded from source documents.

Question 2

2. What are the advantages of special journals?

Answer 2

● Repetitive work is reduced since similar transactions are recorded into one book.
● Reduce unnecessary details in the ledger as only the totals are posted to the ledger.
● Responsibility may be given to staff to take charge of specific journals/Allows division of labour.
● Information on transactions is easily obtained for monitoring and control purposes.

Question 3

3. Define Sales Journal*

Answer 3

Records credit sales of inventory.

Question 4

4. Define Purchases Journal*

Answer 4

Records credit purchases of inventory.

Question 5

5. Define Sales Returns Journal*

Answer 5

● Records return of goods, previously sold on credit, by customers.
● Records any reduction in customers’ accounts due to an overcharge.

Question 6

6. Purchases Returns Journal*

Answer 6

● Records return of goods, previously bought on credit, to suppliers.
● Records any reduction in suppliers’ accounts due to an overcharge.

Question 7

7. Define General Journal

Answer 7

Records transactions not recorded in Special Journals or Cash Book and Petty Cash Book.

Question 8

8. Define Cash Book

Answer 8

Records all cash and cheques received and paid.

Question 9

9. Define Petty Cash Book

Answer 9

Records small amounts of cash paid or recevied.