is entered in purchase journal. Key Terms Introduced in the Chapter • Posting • Sales (Journal) Book • Day books • Balancing of Accounts • Cash book • Purchase (Journal) book • Petty Cash book • Purchases return (Journal) Book • Sales return (Journal) Book Summary with Reference to Learning Objectives . Journal : Basic book of original entry. .
Cash book : A book used to record all cash receipts and payments. . Petty cash book : A book used to record small cash payments. .
Purchase journal : A special journal in which only credit purchases are recorded . Sales journal : A special journal in which only credit sales are recorded . Purchases Return Book : A book in which return of merchandise purchased is recorded. .
Sales Return Book : A special book in which returns of merchandise sold on credit are recorded. Questions For Practice Short Answers . Briefly state how the cash book is both journal and a ledger. .
What is the purpose of contra entry? . What are special purpose books? .
What is petty cash book? How it is prepared? . Explain the meaning of posting of journal entries?
. Define the purpose of maintaining subsidiary journal. . Write the difference between return Inwards and return ouwards.
. What do you understand by ledger folio? . What is difference between trade discount and cash discount?
. Write the process of preparing ledger from a journal. . What do you understand by Imprest amount in petty cash book?
Long Answers . Explain the need for drawing up the special purpose books. . What is cash book?
Explain the types of cash book. . What is contra entry? How can you deal this entry while preparing double column cash book?
. What is petty cash book? Write the advantages of petty cash book? .
Describe the advantages of sub-dividing the Journal. . What do you understand by balancing of account? Numerical Questions Simple Cash Book .
Enter the following transactions in a simple cash book for December : Cash in hand ,