Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

When does a entry termed as a combined entry ___________.

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. if two transactions of one company are involved

  2. if there is debit and credit both

  3. transactions are of the same nature and they take place on the same day.

  4. all the accounts are debited the very same day

Show answer
Correct Option: C

A bank statement is a copy of ___________.

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. a creditors account in the bank book

  2. bank column of the cash book

  3. cash column of the cash book

  4. none of the above

Show answer
Correct Option: B
Explanation:

A Bank statement is a copy of bank column of the cash book. The businesses maintain cashbook with two column which has one cash column and other bank column. The bank column records all the transactions that take place in the bank account.  

A bank pass book is a copy of :

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. The cash column of a customer's cash book.

  2. The bank column of a customer's cash book

  3. The customer's account in the bank's ledger.

  4. None of these

Show answer
Correct Option: C
Explanation:

A Pass Book is a copy of customer's account issued by the bank. The bank maintains the customer accounts in its books of accounts which are further shown in the pass book. Thus passbook is a record of all the transactions that take place in a customers account.

The difference in the balances of both the cash-book and the pass-book can be because of :

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. Timing difference of recording of the transaction.

  2. Errors in cash book committed by account holder.

  3. Error in pass book committed by Bank

  4. All of the above.

Show answer
Correct Option: D
Explanation:

The difference between the balances of cash book and pass book is because of the timing difference, errors in cash book committed by account holder, error is book committed by bank. Some of the reasons can be cheques issues and not presented in the bank, interest allowed by the bank, direct payment through bank, cheques dishonoured, etc. 

Debit balance as per Cash Book of ABC Enterprises as on 31st March is Rs. 3,000. Cheques deposited but not cleared amounts to Rs. 200 and Cheques issued but not presented of Rs. 300. The bank allowed interest amounting Rs. 100 and collected dividend Rs. 100 on behalf of ABC Enterprises. Balance as per pass book should be __________ .

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. Rs. 3,200

  2. Rs. 2,900

  3. Rs. 3,700

  4. Rs. 3,300

Show answer
Correct Option: D
Explanation:

Bank reconciliation statement of ABC Ltd.
Balance as per cash book                                             =    3000 
Add:- Cheques issued but not presented                    =      300
         Dividend collected on behalf of ABC LTD          =       100
          Interest allowed by bank                                    =        100

Less:- Cheques deposited but not cleared                  =     (200)
          
Balance as per Passbook                                              =     3300

A bank reconciliation statements is prepared to reconcile the difference in -

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. Cash balance and bank balance

  2. Cash balance and pass book balance.

  3. Bank balance as per bank column of cash book and pass book.

  4. None of above.

Show answer
Correct Option: C

Direct payment to the third party on behalf of the account holder is entered in-

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. The cash-book when the amount is paid by the bank

  2. The cash-book when the entry is posted in the pass-book

  3. The pass-book when the amount is paid by the bank

  4. None of these

Show answer
Correct Option: C
Explanation:

When a direct payment is made to the third party it is automatically deducted/debited from the bank account. It is entered in the cash book when a cash receipt is received or when the passbook is updated.

Credit Balance in the Cash Book means:

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. Overdraft as per Pass Book

  2. Favourable balance as per Pass Book

  3. Favourable balance as per Cash Book

  4. Neither of the three.

Show answer
Correct Option: A
Explanation:

A credit balance in cash book is a overdraft as per pass book. The bank maintains the customer account which is further printed in the passbook. The passbook is made from the view point of the bank hence customer depositing money is a liability to the bank and is credited. Therefore when the balance is unfavourable it shows a debit balance because they will receive money from the customer. The debits and credit of pass book and cash book are opposite.

Direct payment received from third party on behalf of account holder is entered in-

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. The Cash Book when the amount is received by the Bank

  2. The Pass Book when the amount is received by the Bank

  3. The cash Book when entry is posted in the Pass Book

  4. None of these

Show answer
Correct Option: B
Explanation:

When a direct payment is received from the third party it is automatically added/credited to the bank account. It is entered in the cash book when the passbook is updated or when it is due.

Payment received by the account holder through a cheque is entered in-

book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

  1. The Pass Book at the time of receipt of cheque

  2. The Cash Book at the time of collection of cheque

  3. The Pass Book at the time of collection of cheque

  4. None of these

Show answer
Correct Option: C
Explanation:

Payment received by the account holder through a cheque is entered in the passbook only when its cleared by the bank. The passbook will get credited only after the cheque is cleared by the bank. Uncollected cheques are the cheques which are deposited in the bank but not cleared by the bank or not credited in the bank account. Hence the cheque will appear in the passbook only after its been collected or cleared.