Question

6. Following are the column headings from a specialized journal. What is logical name for this journal? Explain what each of the columns means: Accounts receivable Debit Credit Commission expense Cost of goods sold Date Customer name Invoice number Revenue Product A Product B Services Sales returns Commission payable Inventory

Answer 1

Logical Name for the Journal is Sales Journal.

Meaning of the columns:

1. Account receivable: These are personal accounts to whom sales are made or services are provided on credit basis.

2. Debit: This is to record debit effect of a transaction in double entry accounting system.

3. Credit: This is to record credit effect of a transaction in double entry accounting system.

4. Commission Expenses: This is to record commission paid / commission payable to effect the sales.

5. Cost of goods sold: This is the actual cost of goods sold excluding selling and distribution expenses,

formula for deriving the same is Opening Stock + Purchases - Closing Stock + Any other manufacturing cost.

6.Date: This column is used to record the actual date of effecting the transaction.

7. Customer Name: This column is used to record the name of the customer, it may be legal name or trade name.

8. Invoice No.: Cronological serial no. of the invoice.

9. Revenue : This column depicts gross revenue earned from sale of product or providing of services.

Product A: Revenue earned from the sale of Product A

Product B: Revenue earned from the sale of Product B

Services: Revenue earned from providing services

Sales Return: Records the amount of goods returned by customer.

10. Commission Payable: Amount of commission accrued and due but not paid.

11. Inventory: Stock of goods remaining on hand.