Accounting Multiple Choice Question – 23 August 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Credit notes issued by a firm should initially be recorded in . . .

Select ONE answer:

  1. the sales account in its nominal (general) ledger.
  2. the returns inwards account in its nominal (general) ledger.
  3. the returns inwards journal.
  4. the returns outwards journal.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Incorrect – Credit notes should first be entered in the returns inwards journal, the total of which is posted to the returns inwards account, not the sales account. Only sales (the total of the sales journal) should be recorded in the sales account. Sales returns (returns inwards) should not be netted off against sales in the sales account.
  2. Incorrect – The total of credit notes issued by a firm will eventually end up in its returns inwards account – but only after being posted from the returns inwards journal.
  3. Correct
  4. Incorrect – It is credit notes received by a firm which are initially recorded in the returns outwards journal.

 

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