A business engages in various sales transactions and returns during its operational cycle. Match each sales-related transaction or accounting procedure on the left with its appropriate accounting rule or journal treatment on the right.
- Credit sale of trading inventory to a customer net of trade discountEntered in the Sales Journal based on the duplicate sales invoice
- Return of defective merchandise by a credit customerEntered in the Sales Returns Journal based on the credit note issued
- Periodic total of the Sales Returns Journal at the end of the monthDebited to the Sales Returns (Returns Inwards) Account in the General Ledger
- Sale of an obsolete office motor vehicle on creditEntered in the General Journal (Journal Proper) as a disposal of non-current asset
Answer
Credit sale of trading inventory matches entry in Sales Journal via sales invoice; Return of defective merchandise matches entry in Sales Returns Journal via credit note; Periodic total of Sales Returns Journal matches debiting the Sales Returns Account in the General Ledger; Sale of obsolete motor vehicle matches entry in the General Journal.
Each sales transaction and accounting event aligns with its explicit journal and ledger entry rule: regular inventory credit sales belong in the Sales Journal based on sales invoices; customer returns belong in the Sales Returns Journal based on credit notes issued; the periodic returns total is debited to the Sales Returns Account in the General Ledger; and non-current asset disposals on credit are recorded in the General Journal.
Step-by-Step Solution
Key Concept
Books of Original Entry and Ledger Rules for Sales and Sales Returns