Tag: cheques

Questions Related to cheques

One outgoing cheque of Rs. 112 sent to a creditor but omitted to be recorded in the Cash Book. ( Note: This cheque was presented in the Bank ). When the balance as per Cash Book is the starting point __________ .

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Rs. 112 to be added to cash book

  2. Rs. 112 to be subtracted from cash book

  3. No adjustment is required

  4. None of these

Show answer
Correct Option: B
Explanation:

This is an error of omission. In the given question a cheque of rupees 112 has been omitted to be entered. When balance as per cash book is the starting point the adjustments are to be made in the cash book hence Rs 112 is to be subtracted from the balance of cash book.

A crossed cheque is always payable across the bank counter.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. A bearer cheque is always payable across the bank counter. A cross cheque is a cheque which has to be directly deposited in the bank account of the person so mentioned. It cannot be made payable over the counter.

When balance as per Pass Book is the starting point which of the following is subtracted _______________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Uncollected Cheques

  2. Unpresented Cheques

  3. Direct payments by Bank

  4. Interest Charged by Bank

Show answer
Correct Option: B
Explanation:

When balance as per passbook is the starting point adjustments are to be made in the passbook. Unpresented cheques are the cheques which are issued to a person and he/she has not presented it for payment. In this case the cash book is credited by the cheque issued and passbook is not. So the cash book balance is less than passbook, hence unpresented cheques are subtracted from the passbook balance. 

The process of recording is done ____________________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Two times a year

  2. Once a year

  3. Frequently during the accounting period

  4. At the end of a accounting period

Show answer
Correct Option: C

When balance as per Cash Book is the starting point which of the following is subtracted ________________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Uncollected Cheques

  2. Unpresenred cheques

  3. Direct Deposits by customers

  4. Interest Allowed by Bank

Show answer
Correct Option: A
Explanation:

When balance as per cashbook is the starting point adjustments are to be made in the cashbook. Uncollected cheques are the cheques which are deposited in the bank but not cleared by the bank or not credited in the bank account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are subtracted from the cashbook balance so that both the books come at par.

When balance as per Pass Book is the starting point which of the following is added ______________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Uncollected cheques

  2. Unpresented cheques

  3. Direct Deposits by customers

  4. Interest Allowed by Bank

Show answer
Correct Option: A
Explanation:

When balance as per passbook is the starting point adjustments are to be made in the passbook. Uncollected cheques are the cheques which are deposited in the bank but are not yet cleared by the bank or credit in the account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are added from the passbook balance to bring both the books at par.

Withdrawal of Cash from Bank for personal use should be credited to ________________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Cash Account

  2. Bank Account

  3. Drawings Account

  4. None of these

Show answer
Correct Option: B

Withdrawal of cash from Bank should be debited to _______________.

business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

  1. Cash Account

  2. Bank Account

  3. Drawings Account

  4. None of these

Show answer
Correct Option: A