MSalah Enterprise is a business selling sports accessories. The following transactions took place in the month of November 2021. | Date | Transactions | |---|---| | Nov 1 | Mohamed, the owner, deposited RM50,000 of his cash savings into the bank account for business use. | | Nov 4 | The business paid RM10,400 rental deposit to Jordan Realtors by cheque. | | Nov 5 | Bought goods on credit from Andy Enterprise worth RM20,000. | | Nov 8 | Bought a computer for office use costs RM4,350 on credit. | | Nov 11 | Sold goods on credit to Jota Trading worth RM11,500. | | Nov 17 | Made a RM6,600 cash sales to Oxlade Supply Sdn Bhd. | | Nov 20 | Returned defective goods worth RM3,700 to Andy Bhd. | | Nov 23 | Paid Andy Enterprise RM5,400 by cheque. | | Nov 26 | Mohamed took goods worth RM1,200 for personal use. | | Nov 30 | Jota Trading returned goods worth RM1,500. Required: Identify the appropriate book of prime entry for all the above transactions.
Answer (1)
To categorize the transactions for MSalah Enterprise in the month of November 2021 into their appropriate books of prime entry, we need to identify the type of each transaction. Books of prime entry are initial recording points for transactions and include the Cash Book, Purchases Book, Sales Book, Sales Returns Book, Purchases Returns Book, and the Journal.
Nov 1: Mohamed deposited RM50,000 into the business bank account
Book of entry : Cash Book
Reason : This involves cash coming into the business, recorded in the bank column of the cash book.
Nov 4: Paid RM10,400 rental deposit to Jordan Realtors by cheque
Book of entry : Cash Book
Reason : Payment made via cheque, affecting the bank account, recorded in the cash book.
Nov 5: Bought goods on credit from Andy Enterprise worth RM20,000
Book of entry : Purchases Book
Reason : Records purchases of goods for resale on credit.
Nov 8: Bought a computer for office use costing RM4,350 on credit
Book of entry : Journal
Reason : A credit transaction for non-standard goods (not for resale) is usually recorded in the journal.
Nov 11: Sold goods on credit to Jota Trading worth RM11,500
Book of entry : Sales Book
Reason : Records sales of goods on credit.
Nov 17: Made a RM6,600 cash sales to Oxlade Supply Sdn Bhd
Book of entry : Cash Book
Reason : Cash sales directly affect the cash book, increasing cash.
Nov 20: Returned defective goods worth RM3,700 to Andy Bhd
Book of entry : Purchases Returns Book
Reason : Records the return of purchased goods.
Nov 23: Paid Andy Enterprise RM5,400 by cheque
Book of entry : Cash Book
Reason : Payment affecting the bank account, recorded in the cash book.
Nov 26: Mohamed took goods worth RM1,200 for personal use
Book of entry : Journal
Reason : This is an adjustment entry, as it is treated as drawings by the owner, recorded in the journal.
Nov 30: Jota Trading returned goods worth RM1,500
* **Book of entry**: Sales Returns Book
* **Reason**: Records the return of goods sold on credit.
These books help in organizing financial transactions systematically and provide a basis for preparing the business's financial statements.
