Tag: introduction, meaning and importance of cash book

Questions Related to introduction, meaning and importance of cash book

In Saving A/c. no restrictions are put on withdrawal of cash.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. True

  2. False

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Correct Option: B

_________ is/are forms of a cash book.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. Single column cash book

  2. Double column cash book

  3. Three column cash book

  4. All of the above

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Correct Option: D
Explanation:

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. 


Generally, it is made on monthly basis. This is a very popular book and is maintained by all the organisation, big or small, profit or not-for-profit. It serves the purpose of both journal as well as ledger account. 
It is also called the book of original entry. 
Single column cash book, Double column cash book and Three column cash book are all forms of a cash book.

Goods worth Rs. 45,000 sold to Tarun for cash will be recorded in_________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. Cash book

  2. Sales book

  3. Journal book

  4. Stock register

Show answer
Correct Option: A
Explanation:

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. 


This is very popular book and is maintained by all organisations, big or small, profit or not-for-profit. It serves the purpose of both journal as well as the ledger (cash) account. It is also called the book of original entry. 

When a cash book is maintained, transactions  of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger. 

For example, goods worth Rs. 45,000 sold to Tarun for cash will be recorded in the cash book.

Goods worth Rs.15,000 purchased from Tarun for cash will be recorded in________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. Cash book credit side

  2. Sales book

  3. Journal book

  4. Stock register

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Correct Option: A
Explanation:

The Journal Entry that should be entered in books :-

(i) Purchase A/c Dr.      15000
     To Cash A/c                              15000
(Being goods purchased for cash)
Hence, This will be shown in credit side of cash book.
By Purchase A/c     15000

If Sandeep sold goods for Cash, it will be recorded in _____________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. Sales Book

  2. Cash Book

  3. None of these

  4. Both of these

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Correct Option: B

The Cash Book records ________________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. All Cash Receipts

  2. All Cash Payments

  3. All Cash Receipts and Payments

  4. Cash and Credit Sale of Goods.

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Correct Option: C

Balance in the Cash Book shows net income.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. True

  2. False

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Correct Option: B

Cash book is a type of _______ but it is considered a ___________ of account.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. subsidiary book, principal book

  2. principal book, subsidiary book

  3. subsidiary book, subsidiary book

  4. principal  book, principal book.

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Correct Option: A

The opening balance on the debit side of the bank column in Cash Book indicates ___________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. The total amount withdrawn from the bank

  2. The total amount deposited in the bank

  3. Cash at bank

  4. Bank overdraft.

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Correct Option: C

Direct payment to third party by the bank on behalf of the account holder is entered in ___________.

elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

  1. the cash book when the amount is paid by the bank

  2. the cash book when the entry is posted in the pass book

  3. the pass book when the amount is paid by the bank

  4. both (b) and (c)

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Correct Option: D