FAC1501 Assignment 2 Semester 2 Solutions 2019

FAC1501

Introductory Financial Accounting

ASSIGNMENT 02 (SECOND SEMESTER)

UNIQUE NUMBER 861801
DUE DATE: 30 SEPTEMBER 2019
1. Goods purchased on credit by an entity will be recorded in the …

(1) sales journal
(2) sales returns journal
(3) purchases journal
(4) purchases returns journal
(5) cash payments journal

 The purchases journal is used to record all purchases of inventory on
credit.
 (Inventory are stock, goods, merchandise)
 The purchases journal does not apply to purchases of just any assets.
 The purchases journal is only for purchases of inventory.


2. Goods sold on credit by an entity will be recorded in the…
(1) cash receipts journal
(2) purchases journal
(3) purchases returns journal
(4) sales returns journal
(5) sales journal

 The sales journal is where all sales on credit are recorded (i.e. for
Elizabeth’s Catering, where "services rendered" on credit are recorded).
 Note that only income on credit is recorded here. We do not record any
income received in cash here - income received in cash goes in the cash
receipts journal.
 When a debtor pays Elizabeth’s Catering, this is recorded in the cash receipts
journal.

Refer to page 203 of the study guide.
Also watch the following video: https://m.youtube.com/watch?v=E1z_c9QBzdM