Question

Which of the following books should be used to record purchase of a typewriter on account ?

• A. Cash book
• B. Purchase book
• C. Sales book
• D. Journal book

Answer 1

Answer: (D)

Journal book

Journal book is meant for recording all such transactions for which no special journal has been maintained in the business. Therefore, in this journal, all such transactions are recorded which do not occur frequently and for these transactions no special journal is required. For example, if Machinery is purchases on credit, it will be recorded in the journal book, because in the cash book only cash purchases of machinery is recorded. Similarly, many other transactions, which do not find their place in the special journals will be recorded in the General Journal such as:

(i) Outstanding expenses - Salaries outstanding, rent outstanding, etc.

(ii) Prepaid expenses - Prepaid rent, salaries paid in advance, etc.

(iii) Income received in advance - Rent received in advance, interest received in advance, etc.

(iv) Accrued incomes - Commission yet to be received, interest yet to be received

(v) Interest on capital

Hence, recording purchase of a typewriter on account is recorded in journal book.