Books of prime entry and ledgers: five questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
A book-keeper makes the following adjustments to ledger accounts before making transfers to the statement of profit or loss for the period. Which entries are correct?
Answer: C.
Only 2 and 3 follow the double entry. Rent received in advance is income belonging to the next period, so the rent received account is debited and a liability for income in advance is created, making 2 correct. A reduction in the allowance for irrecoverable debts is debited to the allowance account and credited to the statement of profit or loss, making 3 correct. 1 is wrong because a closing prepayment is credited to the expense account and carried down as an asset, not debited to it. 4 is wrong because the annual charge is credited to the provision for depreciation account so the balance builds up; A, B and D each keep one of these two reversed entries.
Question 2
Which actions are taken in respect of the totals of a three-column cash book at the end of an accounting period? Each answer gives, in order: cash and bank columns; discount columns.
Answer: B.
The cash and bank columns are part of double entry, so they are BALANCED: the difference is carried down and becomes the cash or bank figure in the trial balance. The discount columns are memorandum only. They are simply TOTALLED, and the totals are posted to discount allowed and discount received in the general ledger. Balancing the discount columns treats them as ledger accounts, which they are not, and totalling the cash columns leaves the cash book with no balance to carry forward.
Question 3
Which items would be entered in the General Journal?
1 goods taken by owner for personal use
2 goods purchased for resale
3 purchase of a non-current asset on credit
4 purchase of office stationery
Answer: B.
Only 1 and 3. Goods taken by the owner are journalised because no external document exists and the entry moves value from purchases to drawings. A non-current asset bought on credit is journalised because the purchases journal is reserved for goods bought for RESALE. Goods purchased for resale go in the purchases journal, and office stationery is an ordinary expense paid through the cash book or entered from its invoice, so neither touches the general journal.
Question 4
A business sells a non-current asset for cash. The disposal account includes entries for the cost of the asset and the sales proceeds. Which books of prime entry are used? Each answer gives, in order: cost of asset; sales proceeds.
Answer: C.
The cost of the asset is transferred out of the asset account into the disposal account, which is an internal adjustment with no outside document, so it is journalised in the GENERAL JOURNAL. The sale proceeds are cash actually received, so they go through the CASH BOOK. The sales journal is only ever for credit sales of goods, not for disposals of non-current assets.
Question 5
The following transactions took place.
1 owner’s withdrawal of inventory for private use
2 purchase of new shop fixtures on credit
3 writing off an irrecoverable debt
Which transactions would be recorded in the general journal?
Answer: A.
All three. The general journal is the book of prime entry for anything the other five do not cover. Goods withdrawn by the owner are removed from purchases and added to drawings, a non-current asset bought on credit cannot go in the purchases journal because that is for goods for resale, and writing off an irrecoverable debt is an internal adjustment with no document from outside. Each is journalised with a narrative and then posted.
What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to books of prime entry and ledgers. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on books of prime entry and ledgers, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Putting cash sales in the sales journal.
- Calling a book of prime entry a ledger, or saying the sales journal is part of double entry. The journals are lists; the double entry happens when they are posted.
- Recording trade discount as an expense.
- Forgetting that the cash book is both a book of prime entry and a ledger account.
- Posting the total of the sales journal to each customer as well as to sales, so the entry is doubled.
- Saying credit notes go in the sales or purchases journal. They go in the returns journals.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Books of prime entry and ledgers revision notes.