Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

Direct deposit by a customer will be recorded on ___________ side of the pass book.

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. debit

  2. credit

  3. left hand

  4. both side

Show answer
Correct Option: B
Explanation:

The journal entry in case of direct deposit by a customer in the books of account holder is as follows :

Bank A/c. ...................Dr.
To Sundry debtor A/c
In the cash book the above entry  would be recorded on the debit side and as we know that pass book is an exact opposite record of the cash book so, direct deposit by the customer  would be recorded on the credit side of the pass book.

Interest on bank balance is recorded on __________ side of pass book.

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. debit

  2. credit

  3. both side

  4. any side

Show answer
Correct Option: B
Explanation:

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

Bank A/c. ...................Dr.
To Interest on bank balance A/c
In the cash book the above entry  would be recorded on the debit side and as we know that pass book is an exact opposite record of the cash book so, direct deposit by the customer  would be recorded on the credit side of the pass book.

A cheque returned by bank marked "NSF" means that _________.

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. bank can't verify your identity

  2. there are not sufficient funds in your account

  3. check has been forged

  4. check can't be cashed being illegal reconciliation-statement

Show answer
Correct Option: B
Explanation:

A cheque may be returned by the ban due to many reasons,one of them being there are no sufficient funds in the account.

When there are no sufficient funds the bank would return the cheuqe presented for payment back to the account holder and mark on the cheque "NSF" which means that there are not sufficient funds in your account.

A cheque returned by bank marked "NSF" means that __________.

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. bank can't verify your identify

  2. there are not sufficient funds in your account

  3. cheque has been forged.

  4. cheque can't be cashed being illegal

Show answer
Correct Option: B
Explanation:

A cheque returned by the bank marked NSF means that there are not sufficient funds in your account. This happens when the cheque presented to the bank is of an amount which is more than what is available with you in your bank at that point of time.

In other words, the bounces back and such cheque is known as a bounced cheque.

The reason for totaling at the end of the page of a journal is __________.

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. It makes whole system more convenient

  2. As the calculations are lengthy it is more comfortable

  3. It is a general practice

  4. All of the above

Show answer
Correct Option: D
Explanation:

All the options are correct from accounting point of view.


If the journal entries are recorded on several pages then both the amount column of each page should be totaled. The balance should be written at the end of that page. Also, the same total is to be carried forward at the beginning of the next page.

If a cheque is written by a firm and is not cancelled by the bank and returned with the month's bank statement, the firm should __________.

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. adjust the balance in the firm's cheque book to reflect the data that appears in the bank's records.

  2. immediately notify the bank requesting that it correct its records.

  3. consider this cheque as outstanding when preparing the bank reconciliation.

  4. Consider this cheque to be lost and issue a replacement check.

Show answer
Correct Option: C
Explanation:

If a cheque written by a firm is not cancelled by the bank and returned with the month's bank statement, the firm should consider the cheque as outstanding while preparing the bank reconciliation statement. This means that the cheque has been issued but not presented for payment. So, the firm can consider such cheque as issued ( i.e. credited in cash book) but outstanding for payment when preparing bank reconciliation statement.

In bank reconciliation statement the account of outstanding cheques is added to _____________ balance of cash.

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. book adjusted

  2. unadjusted

  3. understand

  4. overstated

Show answer
Correct Option: A
Explanation:

Outstanding cheques or unpresented cheques are those cheques which have been issued by the company but not yet presented for payment by the other party. The amount of such cheques have already been deducted from the cash book by the company accountant. The bank , on the other hand, will credit the bank account only when such cheque has been cleared from the bank. So, while reconciling the balances as per cash book and pass book, the account of outstanding cheques is added to book adjusted balance of cash.

The proper treatment of outstanding cheques on a bank reconciliation is to show them as a __________.

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. addition to the  book balance of cash

  2. deduction to the  book balance of cash

  3. addition to the bank statement balance

  4. deduction to the  bank statement balance

Show answer
Correct Option: C
Explanation:

In case of outstanding cheques the entry for the same would have been entered in the cash book and so the bank statement would be lower than the cash book balance.

So, while preparing a bank reconciliation statement the proper treatment of outstanding cheques is to show then as a addition to the bank statement balance.

Balance as per cash book  = Rs.10000, unpresented cheques = Rs. 2000, uncredited cheque = Rs.500, compute the balance as per bank statement .

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. $Rs.7500$

  2. $Rs.12500$

  3. $Rs.8500$

  4. $Rs.2500$

Show answer
Correct Option: C
Explanation:

The reconciliation is as follows :

   Particulars Amount in Rs. 
   Balance as per cash book $10000$ 
 Less Unpresented cheques  $2000$ 
 Add Uncredited cheque  $500$ 
   Balance as per bank statement $8500$

Payment done by the account holder through issuing 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 issuing the cheque

  2. The cash-book at the time of presenting the cheque to the bank for payment

  3. The pass-book at the time of presenting the cheque to the bank for payment

  4. The cash-book when informed by the third party

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.