For each of the following transactions, state which special journal should be used to record the transaction. In addition, state which columns will be used.
Transaction 1: Freeworld Co. paid $1,500 for monthly utilities, on the date the bill was received.
Which special journal?
Which columns are used to record the transaction?
Transaction 2: Wideworld Co. purchased office supplies on account.
Which special journal?
Which columns are used to record the transaction?
Transaction 3: Wonderworld Co. sold $5,000 of merchandise inventory to A. Allen, on account.
The cost of the merchandise inventory was $3,200. The company uses a perpetual inventory
system.
Which special journal?
Which columns are used to record the transaction?
Transaction 4: Oneworld Co. borrowed $10,000 from World National Bank.
Which special journal?
Which columns are used to record the transaction?
Transaction 1: Freeworld Co. paid $1,500 for monthly utilities, on the date the bill was
received.
Which special journal? Cash Payments Journal
Which columns are used to record the transaction? Other Accounts DR; Cash CR
Transaction 2: Wideworld Co. purchased office supplies on account.
Which special journal? Purchases Journal
Which columns are used to record the transaction? Accounts Payable CR; Office Supplies DR
Transaction 3: Wonderworld Co. sold $5,000 of merchandise inventory to A. Allen, on account.
The cost of the merchandise inventory was $3,200.
Which special journal? Sales Journal
Which columns are used to record the transaction? Accounts Receivable DR, Sales Revenue CR,
Cost of Goods Sold DR, Merchandise Inventory CR.
Transaction 4: Oneworld Co. borrowed $10,000 from World National Bank.
Which special journal? Cash Receipts Journal
Which columns are used to record the transaction? Cash DR, Other Accounts CR
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