New Upcoming Legal Jobs Free Workshop March 11 at 5 PM. Register here

    Question

    Which of the following will be recorded in the books of

    account.
    A Sales of goods Correct Answer Incorrect Answer
    B Payment of salary Correct Answer Incorrect Answer
    C Purchase of goods Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer

    Solution

    In accounting, all financial transactions that result in a measurable change in the assets, liabilities, or equity of a business must be recorded in the books of account. This includes the following:

    1. Sales and revenue received
    2. Purchases and expenses paid
    3. Receipts of cash or other assets
    4. Payments of cash or other assets
    5. Loans taken or repaid
    6. Investments made or sold
    7. Depreciation and amortization of assets
    8. Accrued expenses and income
    9. Provision for bad debts
    10. Stock issuances and buybacks
    These transactions should be recorded accurately and in a timely manner using double-entry bookkeeping, where each transaction affects at least two accounts, with one account debited and another account credited. This ensures that the accounting equation (assets = liabilities + equity) always remains in balance.

    Practice Next

    Relevant for Exams: