Chapter 6: Accounting for purchases and purchases returns Flashcards
1
Q
What does the Accounting System stages of recording & presenting financial transactions include?
A
- Financial Documents
- Books of Prime Entry
- Double-Entry book-keeping
- Trial Balance
2
Q
Financial Documents relating to credit purchases are?
A
- Purchases invoices
- Credit notes received.
3
Q
What is the purchases day book?
A
Purchases day book is the book of prime entry for credit purchases.
It is prepared from purchases invoices received from suppliers.
4
Q
What is the purchases returns day book?
A
Purchases returns day book is the book of prime entry for purchases returns.
It is prepared from Credit Notes received from suppliers.
5
Q
What are analysed purchases & purchases returns day books used for?
A
When a business wishes to analyse its purchases between different categories of expenditure.
6
Q
Recording credit purchases in the double-entry system uses?
A
- Financial documents: Purchases invoices
- Books of prime entry: Purchases day books
- Double Entry accounts: In the General Ledger
- Memorandum accounts: In the purchases ledger.
