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ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations

Kestrel Ltd's bookkeeper posts each sales invoice to the sales day book and then to the individual customer accounts in the receivables ledger. What is the main benefit of using the sales day book in this way?

The sales day book groups similar transactions, so the total of invoices can be posted to the general ledger in a single entry while individual amounts go to customer accounts. It does not remove the need for a trial balance or prove invoices are valid.

  1. AIt removes the need for a trial balance
  2. BIt guarantees that all invoices recorded are valid sales
  3. CIt groups similar transactions so that totals can be posted to the general ledger in one entryCorrect
  4. DIt allows customers to pay their invoices late without penalty

Explanation

Books of prime entry collect similar transactions, so the period total can be posted to the general ledger control accounts rather than each invoice individually. A trial balance is still needed to check double entry. Day books do not verify that invoices are valid, which is an internal control matter.

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