Which book of prime entry is used to record credit notes received from suppliers for goods returned?
Correct answer: D. Purchases returns book
- A. Sales returns book
- B. Bills payable book
- C. Journal proper
- D. Purchases returns book
Explanation
A credit note received from a supplier usually confirms that goods have been returned to that supplier. Such returns are entered in the purchases returns book.
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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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