Question

State whether the following statements are True or False :
(a) Journal is a book of secondary entry.
(b) One debit account and more than one credit account in a entry is called
compound entry.
(c) Assets sold on credit are entered in sales journal.
(d) Cash and credit purchases are entered in purchasejJournal.
(e) Cash sales are entered in sales journal.
(f) Cash book records transactions relating to receipts and payments.
(g) Ledger is a subsidiary book.
(h) Petty cash book is a book having record of big payments.

Answer 1

Answer:

A.. False

B... True

C.. False

D.. False

E.. False

F.. True

G.. True

H... False

Answer 2

If an answer is false then explanation is given.

Explanation:

(a) False

Journal is the book of original entry.

(b) True

(c) False

Assets sold on credit are recorded in asset and buyers account not on sales account. Sales account records credit sales.

(d) False

Purchase journal records only credit purchase and not cash purchases.

(e) False

Only credit sales are recorded in sales journal.

(f) True

(g) True

(h) False

Petty cash book records those transactions which are small and of little use to the business.