ExpertEasy2 marksMultiple Choice
ACCA · Question 08 · Books of Prime Entry
EcoFarm Ltd returns $1,200 worth of defective organic fertilizer to its supplier, GreenChem. In which book of prime entry will EcoFarm Ltd initially record this transaction?
EcoFarm Ltd returns $1,200 worth of defective organic fertilizer to its supplier, GreenChem. In which book of prime entry will EcoFarm Ltd initially record this transaction?
Answer options:
A.
Sales returns day book
B.
Purchases day book
C.
Purchase returns day book
D.
Cash book
How to approach this question
Identify the nature of the transaction: returning goods previously purchased on credit.
Full Answer
C.Purchase returns day book✓ Correct
When a business returns goods to a supplier, it is a purchase return (or return outwards). The initial record of this transaction is made in the purchase returns day book before being posted to the ledgers.
Common mistakes
Confusing purchase returns (returns to suppliers) with sales returns (returns from customers).
Practice the full ACCA FA — Financial Accounting Practice Exam 3
65 questions · hints · full answers · grading
More questions from this exam
Q01GlobalWater NGO, a non-governmental organization providing clean water solutions, is preparing it...EasyQ02NexusTech, a cross-border multinational software company, operates in 15 different countries. Why...MediumQ03In the context of a large public utility company, which of the following is strictly the responsi...EasyQ04Quantum AI, a tech startup, is developing a revolutionary algorithm. The directors want to capita...MediumQ05AgriGrow, a large agricultural firm, recently changed its method of depreciating tractors from th...Medium