Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

The closing balance of the petty cash book is_______.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Expense/expenditure

  2. Profit/ gain

  3. Assets

  4. Liability

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Correct Option: C
Explanation:

The closing balance of petty cash book is considered as Asset. 

Petty Cash is a current asset account; it is part of a company's cash.

Petty cash Book is just like a cash book , its just that this book maintains petty cash expenses separately as against the normal cash book . 
Therefore, balance of petty cash book is an asset & an not income. Its used for paying out petty expenses.

_________ is the book which is used for the purpose of recording the payment of petty cash expenses.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Cash book

  2. Bank book

  3. Petty cash Book

  4. Miscellaneous Expenses Book

Show answer
Correct Option: C
Explanation:

In every organisation, a large number of small payments such as conveyance, cartage, postage, telegrams and other expenses are made. These are generally repetitive in nature. 

If all these payments are handled by the cashier and are recorded in the main cash book, the procedure is found to be very cumbersome. The cashier may be overburdened and the cash book may be become very bulky. 
To avoid this, large organisations normally appoint one more cashier and maintain a separate cash book to record these transactions. Such a cash book maintained by petty cashier is called petty cash book. It is used for the purpose of recording the payment of petty cash expenses.

_______does not exist in the three column cash book.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Cash Column

  2. Bank Column

  3. Petty Cash Column

  4. Discount Column

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Correct Option: C

The balance in the Petty Cash Book represents income.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

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Correct Option: B

The balance in the Petty Cash Book represents expenses.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

Show answer
Correct Option: B

The balance in the petty cash book is ____________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. an expense

  2. a profit

  3. an asset

  4. a liability

Show answer
Correct Option: C

Petty cash may be used to pay ______________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. The expenses relating to passages and conveyance

  2. Salaries and wages to the manual staff

  3. For the purchase of furniture and fittings

  4. None of these.

Show answer
Correct Option: A

Balance in a petty cash book is _______.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. an expense

  2. a profit

  3. an asset

  4. None of these

Show answer
Correct Option: C

Fixed assets are __________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Kept in the business for use over a long time of earning income

  2. Meant for resale

  3. Meant for conversion into cash as quickly as possible

  4. All of the above

Show answer
Correct Option: A
Explanation:

 A fixed asset is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income. Fixed assets are not expected to be consumed or converted into cash within a year. Fixed assets most commonly appear on the balance sheet as property, plant, and equipment (PP&E).

The petty cashier generally works on _______ system.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Balancing

  2. Accrual

  3. Matching

  4. Imprest

Show answer
Correct Option: D