Which transaction is normally recorded in the journal proper as an opening entry?
Correct answer: A. Bringing forward opening asset and liability balances
- A. Bringing forward opening asset and liability balances
- B. Recording daily cash sales
- C. Recording routine credit purchases
- D. Entering cash received from a debtor
Explanation
An opening entry brings the balances of assets, liabilities and capital from the previous period into the new ledger. Routine sales, purchases and cash receipts are recorded in their specific books of prime entry.
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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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