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Fundamentals of financial accounting

CHAPTER 7 – THE BOOKS OF PRIME ENTRY, DISCOUNTS AND
SALES TAX

7.1 C

Day books include:

Sales day book

Purchases day book

Sales returns day book

Purchase return day book

Cash book

Petty cash book

The journal

7.2 B

7.3 B

$45 + ($12.50 + $19 + $25) = $101.50

7.4

$
Price 1,200
Less: Trade discount (5% × $1,200) 60
1,140
Add: Sales tax at 20% (20% × $1,140) 228

Total 1,368

7.5 C

$
Sales net of sales tax 45,000
Purchases net of sales tax (36,000)

9,000
Tax payable @ 10% 900

432