Accounting Multiple Choice Question – 27 August 2019

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

Accounting

The total of credit notes issued to customers recorded in the Returns lnwards Journal is posted to . . .

Select ONE answer:

  1. the debit side of the returns inwards account in the nominal (general) ledger.
  2. the credit side of the sales account in the nominal (general) ledger.
  3. the debit side of the sales account in the nominal (general) ledger.
  4. the credit side of the returns inwards account in the nominal (general) ledger.

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 1

  1. Correct
  2. Incorrect – Sales returns (returns inwards) should be recorded in the returns inwards account.
  3. Incorrect – Sales returns (returns inwards) should not be offset against sales in the sales account, as showing the two amounts separately provides better information about what has actually happened.
  4. Incorrect – Returns inwards (goods being sent back by customers) are the opposite of sales (goods being sent to customers). As sales are recorded as a credit in the sales account in the double-entry accounting records, returns inwards must be recorded as a debit.

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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