Chapter 7, Problem 1GLP

To determine

Concept Introduction:

Journals:

Journals are prepared to record business transactions. There are two types of journals:

1. Special Journals:

   Special journals record the recurring business tractions like sales, purchase, cash receipts and payments. Some special journals are as follows:

• Sales journal
• Sales Return Journal
• Purchase journal
• Purchase return journal
• Cash receipts journal
• Cash payment journal
2. General Journal:

   All the business transactions which do not belong to special journals are recorded using General journal.

Subsidiary Ledger:

A Subsidiary Ledger is prepared for the one account of the general ledger. There may be several subsidiary ledgers of one general ledger.

General ledger:

A general ledger contains the summarized information taken from its subsidiary ledgers.

The relation between subsidiary ledger and control accounts. And prepare journal entries for the given purchase and sales transactions.