A credit sale of goods to Ali for Rs. 12,000 is first recorded in which book of prime entry?
Correct answer: B. Sales day book
- A. Purchases day book
- B. Sales day book
- C. Cash book
- D. Purchases returns book
Explanation
A credit sale of goods is first entered in the sales day book. Ali's personal account is later debited and the sales account is credited through the appropriate posting process.
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About Double Entry and Books of Prime Entry
Double entry records every transaction with equal debit and credit entries, based on the accounting equation and the classification of assets, liabilities, capital, income and expenses. Books of prime entry include the sales, purchases, returns and cash books, journal, and source documents used before transactions are posted to ledger accounts.
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