Tag: book keeping and accountancy

An amended cash book is where all the adjustments are done, the starting point being the balance as per cash book. All the errors in the cash book are adjusted in the same. Hence, an entry not appearing in the cash book is to adjusted in an amended cash book.

True. A bank book may also be known as a passbook which is maintained only for recording transactions of a bank account. A Bank Book is a statement that shows the transactions that occur is a customer's bank account.  

A Bank Pass Book is a statement that shows the transactions that occur is a customer's account. The bank maintains customer's account which are further copied/transferred to the Bank Pass Book. Pass Book is maintained so that the customer can refer the transactions that have occurred over a period of time.

True. Interest on overdraft is charged by the bank and paid by the customer. So, it reduces the balance in the pass book which is prepared by the bank as a copy of customer's account in the books of the bank.

The journal entry in case of interest on bank overdraft in the books of account holder is as follows :

False. Bank charges debited by the bank in the pass book reduces the balance in the pass book as compared to cash book. This is because the business has not yet recorded this transaction. This difference arises only because of the difference in recording of the transaction.

True. Interest credited in the pass book is an income for the customer as credited amount shows favourable balance and debited balance shows unfavourable balance in the pass book for the customer.

True. Cheque deposited into bank for collection are first received by business, and then sent to bank for collection. So the business records the transaction by debiting the bank column in the cash book as the amount is going to get added in the bank account and not as cash balance in the form of currency.

True. Interest and dividend are incomes of the customer which are collected by the bank on behalf of the customer. So, when money is received by the bank, the bank increase the balance in the cash book and credits the customer's account.