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A. Objective Type Questions:

I. Indicate the correct alternative: 

1. Purchases book records……..

(a) all purchases                      (b) all cash purchases

(c) all credit purchases            (d) all credit purchases of goods.

 

2. Sales book records…….

(a) Sale of assets on credit      (b) Sale of goods on credit

(c) Cash sales                          (d) all credit sales.

 

3. Purchases Return book records……..

(a) return of goods purchased on credit (b) return of assets purchased on credit

(c) return of all things             (d) return of capital. 

 

4. Sales Return book records…….. .

(a) return of assets sold on credit        (c) return of all things

(b) return of goods sold on credit       (d) return of capital.

 

5. Journal proper records…….. .

(a) all transactions                               (b) all cash transactions

(c) all credit transactions                     (d) all transactions not recorded in any of subsidiary books.

 

6. The purchases journal contains…….. .

(a) All purchases                                 (c) Credit purchase of merchandise

(b) All purchases of merchandise        (d) Cash purchase of merchandise.

 

7. The source document for recording entries in the purchases return~ journal is generally…….. .

(a) A credit note                                  (b) An invoice

(c) A bill                                              (d) A debit notes.

 

8. Goods purchased on cash are recorded in the…….. .

(a) Purchase book                                (b) Sales book

(c) Cash book                                      (d) Purchases return book.

 

9. Total of these transactions is posted in Purchase account…….. .

(a) Purchase of furniture                     (b) Cash and Credit Purchase

(c) Purchase returns                             (d) Purchase of stationery.

 

10. The Periodic total of sales returns journal is posted to…….. .

(a) Sales account                     (b) Goods account

(c) Purchase Returns account (d) Sales Returns account.

 

Ans. 1. (d) 2. (b) 3. (a) 4. (b) 5. (d) 6. (c) 7. (d) 8. (c) 9. (b) 10. (d).

 

II. Fill in the blanks with appropriate words:

1. Purchases book always has ………… balance.

2. Sales book has ………… balance.

3. Return outwards book has ………. balance.

4. Return inwards book has ………. balance.

5. In the purchases journal. all …… purchases of merchandise are recorded.

6. In the sales journal. all …… sales of merchandise are recorded.

Ans. l. debit 2. Credit 3. Credit 4. Debit 5. Credit 6. Credit.

 

B. Very Short Answer Type Questions:

Where will you record the following transactions?

1. Credit purchases of goods

2. Credit sales of goods

3. Credit sales of assets

4. Credit purchases of assets

5. Sale of furniture by M/s Tokali & Sisters, furnishers, Dimapur

6. Return of goods previously sold on credit

7. Return outwards of goods.

8. List the various subsidiary journals.

 

C. Short Answer Type Questions:

 

1. Enumerate the causes responsible for the return of goods from the purchaser to sellers.

2. Name the books, which record non-cash transactions.

3. Explain briefly the difference between purchases book and purchases account.

4. Differentiate between sales book and sales account.

5. Explain the term ‘ Debit Note’ and ‘Credit Note’ in five sentences.

6. Describe journal proper in five sentences.

7. Mention five transactions to be recorded in journal proper.

8. Prepare a format of columnar purchases book and post three imaginary transactions in it.

9. What is special journal? Give a specimen of such journal showing at least five entries.

10. What is difference between trade discount and cash discount?

 

D. Long Answer Type Questions: 

1. What is meant by sub-division of journal? What are its advantages?

2. Explain purchases book and sales book with their format. Why does a trader keep these books?

3. What purpose do the purchases return and sales return books serve? How are they prepared? In what respects they are different from each other?

4. Write notes on:

(a) Debit note (b) Credit note.

5. Enumerate the possible causes for which goods are returned to the seller.

6. Enumerate books, where non-cash transactions are recorded. Explain the various columns used in any one of them.

 

                                                                                                                   PRACTICAL QUESTIONS

                                                                                                           Purchases Book and Sales Book

1. Enter the following transactions in the Purchases Book:

2006

Mar. 1              Purchased from Khan Bros., Daryaganj (Invoice No. 324)

50 tins Ghee @ $ 500 per tin

100 bags Sugar @ $ 900 per bag

Less: 10% Trade discount.

 

Mar. 2              Bought of M/s Mehra Stores, Rohini (Invoice No. 325)

20 bags Rice @ $ 300 per bag

10 bags _sugar @ $ 1 000 per bag

15 bags Wheat @ $  400 per bag

Less : 10% Trade discount.

 

Mar. 30            Bought of Miss Rajshree, Preet Vihar (Invoice No. 326)

10 bags Sugar @ $ 1000 per bag

30 tins Ghee @ $ 400 per tin.

[Ans. Total $ 1,45,300]

 

2. Prepare a Purchases Book from the following transactions:

2006

Jul. 1                Purchased from M/s Adi Furniture House, Lajpat Nagar (Invoice No. 545)

120 Chairs @ $ 150 per chair

50 Tables @ $ 400 per table

Less: 5% Trade discount

 

Jul. 10              Purchased from M/s Naghma & Co., NO IDA (Invoice No. 7 14)

150 Desks @ $ 220 per desk

160 Chairs @ $ 180 per chair

Less : 10% Trade discount.

 

Jul. 25              Purchased from M/s Ashok Furniture House, New Delhi (invoice No. 816)

5 Sofa sets @ $ 3000 each

40 Chairs @ $  150 each

35 Tables @ $  250 each

Less : 10% Trade discount. [Ans. Total of purchases book = $ 1, 18,495]

 

3. Prepare a Sales Book from the following transactions:

2006

Jan. 3               Sold to M/s Akash Bros., New Delhi (Invoice No. 2001)

I 00 Copies of Golden Accountancy @ $ 80 each

200 Copies of Golden Economics @ $ 45 each

50 Copies of Golden English @ $ 40 each

Less: 10% Trade Discount.

 

Jan. 7               Cash sales to M/s Pinki Book Depot. Daryaganj, for $ 20,000 (Invoice No. 2025)

Jan. 23 Goods sold to M/s Gargi & Sons., Sarojini Nagar (Invoice No. 2885)

200 Golden English for Class XII @ $ 40 each

I 00 Golden Hindi for Class XII @ $ 50 each

50 Golden Chemistry for Class XII @ $ 80 each

Less : Trade Discount @ 20%.

[Ans. Total of Sales Book $ 30,700]

 

4. Enter the following transactions in the Sales Book of M/s Arora Bros. Punjab:

2006

Jan. 4               Sold to M/s Hira Lal & Co., Punjab (Invoice No. 3025)

15 dozens pencil is @ $ 14 per dozen

2 gross registers @ $ 100 per gross

Jan. 10             Sold to M/s Adi, Punjab (Invoice No. 4085)

10 gum bottles@ $ 4.50 per bottle

5 dozens rulers @ $ 12 per dozen

Less: 5% Trade Discount

Jan. 15             Sold old typewriter to M/s David & Co., on credit for Rs. 1000 (Invoice No. 5724)

Jan. 20 Sold M/s Philiphs Radio, Panipat (Invoice No. 6482)

10 dozens pens @ $ 60 per dozen for cash

Jan. 25             Sold to M/s Cheap Store, Panipat (invoice No. 7892)

10 dozens pencils@ $ 16 per dozen

4 reams of white paper @ $ 60 per ream

Less: 10% Trade Discount. [Ans. Total of the sales book $ 3,069.75)

 

5. Enter The following transactions in the Columnar Purchases Book of A.P. Chatterjee:

2001

May 1              Purchased from M/s Chatterjee Store, New Delhi (Invoice No. 178)

100 bags Wheat @ $ 400 per bag

50 bags Rice @ $ 450 per bag

200 bags Sugar @ $ 900 per bag

May 5              Bought of James Paharganj (Invoice No. 275)

100 bags wheat@ $ 400 per bag

100 bags Rice@ $ 450 per bag

May 8              Arnold, Karol Bagh sold to us : (Invoice No. 295)

100 bags Sugar @ $ 900 per bag

May 9              Mathews, Patel Nagar, sold to us (Invoice No. 310)

200 bags Wheat @ $ 460 per bag.

[Ans. Total of purchase book $ 5, 09,500]

 

Purchases Retums Book and Sales Returns Book

6. Prepare Purchases Returns Book of Novelty Furniture House:

2006

Feb. 1              Returned to Kapoor & Co. (Debit Note No. 156)

5 Stools @ $ 80 per Stool

10 Chairs @ $ 150 per Chair

Feb. 10            Returned to M/s Standard Furniture Stores: (Debit Note No. 188)

5 Tables @ $ 100 per Table

8 Stools @ $ 70 per Stool

Feb. 28            Returned to M/s Toshali & Co. : (Debit Note No. 198)

7 Tables @ $ 120 per Table

5 Stools @ $ 100 per Stool.

[Ans. $  4,300]

 

7. Prepare Returns Books from the following information:

2002

Dec. 1              M/s Anshul & Co. returned to us 20 chairs @ $ 200 per chair

Less: Trade discount 5%

Dec. 4              Returned to Vijaya 9 chairs @ $  120 per chair being not of specified quality

Dec. 7              Received back from Miss. Anne & Co. ; 4 stools @ $  40 each ; 20 almirahs @ $ 700 each

Dec. 8              M/s Garg & Bros. returned to us 2 Tables @ $  300 each ; 5 broken almirahs @ $ 400 each

Dec. 10            Sent back one dining table to Aditya for not being polished @ $ 600 and 8 chairs @ $ 200 each

Dec. 15            Returned 3 chairs @ $ 180 each and one stool of $ 40 to Ansari and Co.

[Ans. Returns Outward Book $ 3,860 ; Returns Inward Book $ 20,560]

 

8• The following transactions are to be entered into proper subsidiary books, then subsidiary books are to be closed on 31st January:

2002                                                                                                                            $

Jan. 1   Purchased goods from Amita at the list price of…………………………..40,000

Less : 10% Trade discount

Jan. 5   Sold goods to Ankit for ……………………………………………………10,000

Jan. 6   Returned goods to Amit at the list price of ……………………………….5,000

Jan. 7   Adi sent goods for …………………………………………………………30,000

Jan. 8   Sold goods to Avi for …………………………………………………….12,000

Jan. 19 Sent goods to Ankit for …………………………………………………..6,000

Jan. 27 Sold goods to Anjani for…………………………………………………8,000

[Ans. Total of Purchases Book for 66,000; Sales Book Rs. 36,000; Returns Outward Book Rs. 5,000]

 

9. Record the following transactions of Hira La! in the proper books :

2003

Jan. 1   Cash in hand…………………………………………………………….1,700

Jan. 3   Goods purchased from Khan……………………………………………200

Jan. 7   Goods sold to Kiran …………………………………………………….400

Jan. 9   Goods purchased from John ……………………………………………500

Jan. 15 Goods Returned from Navin …………………………………………..50

Jan. 20 Goods Returned to Nancy ……………………………………………..25

Jan. 21 Cash paid into Bank ……………………………………………………200

Jan. 22 Paid wages ……………………………………………………………..20

Jan. 23 Received from Anil…………………………………………………….500

Jan. 31Paid for salaries………………………………………………………….100

Jan. 31 Furniture purchased from Satish………………………………………..2,000

[Ans. Cash in hand $ 1,880; Purchases Book $ 700; Sales Book $ 400; Returns Inward Book $ 50 ; Returns Outward Book $ 25; Total of Journal $ 2000]

 

10. Miss Nancy carries on business as cloth dealers. From the following, write up, their purchases book for January 2006 :

2006

Jan. 3               Purchased on credit from Standard Mills: (Invoice No. 1225)

100 meters long cloth @ $ 30 per meter

50 meters shirting @ $ 50 per meter

Jan. 8               Purchased for cash from Yikash Mills : (Invoice No. 1445)

50 metres muslin @ $ 40 per meter

Jan. 15             Purchased on credit from India Textiles Ltd. (Invoice No. 1668)

120 meters suiting@ $ 100 per meter

100 meters shirting @ $ 60 per meter

Jan. 20             Purchased laser printer on credit from

Bharat Computer Ltd. for $ 12,800

[Ans. Total of purchase book 36,300]

 

11. Emer the following transactions of Praveen & Co. in the proper books :

2006

July 5               Sold on credit to M/s Rakesh & Co.: (Invoice o. 515)

10 electronic irons @ $ 25

5 electric stoves @ $ 15

July 8               Purchased on credit from M/s Ansari & Sons: (Invoice No. 60 I)

25 heaters @ $ 40

10 water heaters @ $ 20

July 10             Purchased for cash from M/s Nancy & Co. 🙁 Invoice No. 625)

10 electric kettles@ $ 30

July I5             Sold to M/s Praveen Bros. on credit: (Invoice No. 648)

10 heaters @ $ 50

5 water heaters @ $ & Sons: (Debit Note No. 650)

5 heaters, being defective

July 20             Purchased from M/s Akash & Co.: (Invoice No. 712)

10 toasters @ $ 20

10 water heaters @ $ 30

July 26             M/s Praveen Bros. returned one water heater as defective. (Credit Note No. 725)

[Ans. Total of Sales Book $ 925 ; Purchases Book $ 1,800 : Returns Outward Book $ 200 : Returns Inward Book $ 25]