Tag: bank book and petty cash book

Questions Related to bank book and petty cash book

State with reasons whether the following statement is true or false:
Petty cash is an expense.

  1. True

  2. False


Correct Option: B

Petty cash book can be treated as _____________.

  1. register

  2. memoranda book

  3. part of double entry system

  4. none of the above


Correct Option: C

What is an analytical petty cash book?

  1. Petty cash book formed in columnar form

  2. Petty cash book formed in tabular form

  3. Petty cash book formed In arithmetic form

  4. None of the above


Correct Option: A

Which of the following statements is incorrect?

  1. In emergency the Petty Cashier may give staff loans of small amounts

  2. The Petty Cash Book could be either a subsidiary book or a main book of accounts.

  3. Every payment made by the Petty Cashier should be supported by evidence

  4. Regularly Petty Cashier is reimbursed to make up his cash balance to the imprest


Correct Option: A

If the debit and credit aspects of a transaction are recorded in the cash book it is a:

  1. Contra entry

  2. Simple entry

  3. Double entry

  4. Single entry


Correct Option: A
Explanation:

Option A is correct .

Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, contra entry will be recorded on the credit side and vice-versa.

In petty cash book, the system followed ______________.

  1. Accrual system

  2. Impress system

  3. Cash system

  4. None of these


Correct Option: B

Where two aspects of transaction are posted in the cash book, such an entry is called _______________.

  1. Double entry

  2. Debit entry

  3. Credit entry

  4. Contra entry


Correct Option: D

The following is the summary of the petty cash transactions for a week:
Income - Opening Balance - Rs. 500; Sale of Stamps - Rs. 10; Sale of Paper - Rs. 50
Expenditure - Travelling expenses - Rs. 150; Subsistence expenses - Rs. 250
Petty cash is maintained using the imprest system.
What sum should be reclaimed by the cashier at the end of the week ?

  1. Rs.150

  2. Rs. 340

  3. Rs. 400

  4. Rs. 500


Correct Option: B

Impress amount -Rs. 500. what will be the amount of re-imbursement if following expenses were incurred by the petty cashier during the month-telephone = Rs. 150, Tiffin = Rs. 50, small Repairs. =Rs. 30 general expenses = Rs. 100. 

  1. 300

  2. 170

  3. 330

  4. 270


Correct Option: C