Tag: meaning and advantages of cash book

Questions Related to meaning and advantages of cash book

Accounting for recovery from Mr. C of an amount of Rs $2,000$ earlier written off as bad debt 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. Purchase Book

  3. Journal Proper(General Journal)

  4. Cash Book

Show answer
Correct Option: D

The cash book showed an overdraft of Rs. 3,000 as cash at bank, but the pass book made up on the same date showed that cheques of Rs. 200, Rs. 100 and Rs. 250 respectively had not been presented for payments; and the cheques of Rs. 800 paid into account had not been cleared. The balance as per the cash book will be _____ .

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. Rs. 2,200

  2. Rs. 4,350

  3. Rs. 3,250

  4. Rs. 2,750

Show answer
Correct Option: C

Deposit column of pass book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point __________ .

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. Rs. 112 to be added

  2. Rs. 112 to be subtracted

  3. No adjustment is required

  4. None of these

Show answer
Correct Option: A

A cheque is considered as stale when if has been in circulation for _______________.

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. more than forty eight hours

  2. more than one year

  3. more than six months unless otherwise specified

  4. more than three months

Show answer
Correct Option: D

Cash purchase is accounted in the _______ 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. Purchases 

  2. Joint venture 

  3. Private

  4. Cash 

Show answer
Correct Option: D
Explanation:

Cash purchase will affect two accounts i,e. goods and cash. Cash purchases will be recorded in cash book.

The term banking is defined in section _________.

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. Section 5 of Banking Regulation Act

  2. Section 4

  3. Section 7

  4. None of these

Show answer
Correct Option: A
Explanation:

As per Section 5(b) of the Banking Regulation Act, 1949 , "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.

Cash sales are 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. Journal

  4. None of the above

Show answer
Correct Option: B
Explanation:

All the cash transactions are recorded in cash book. 

Sales against cash will increase the cash and decrease the goods.

Accounting entry will be passed as under:

Cash A/c                                Dr,
           To Sales/Goods A/c

The subsidiary book in which details of cash received in the form of currency, cheques, drafts, etc. and details of payment made in cash or by cheques, and drafts is called 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. True

  2. False

Show answer
Correct Option: A

________is the book in which cash discount received and allowed is recorded.

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. Purchase book

  3. Petty cash book

  4. Journal proper

Show answer
Correct Option: D
Explanation:

A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal Residual. When the journal is sub-divided into various subsidiary books, such as, Sales Book, Purchase Book, etc. The Journal becomes the residuary book in which only those transactions are recorded that cannot be recorded in any other subsidiary book. This type of journal is called journal proper. The following types of entries are recorded in Journal Proper:

a. Opening entry
b. Closing entry
c. Transfer entries
d. Rectification entries
e. Adjustment entries
f. Miscellaneous entries such as discount received, bad debts written off, etc.
Thus, cash discount received and allowed is recorded in the journal proper.

Book in which small payments are recorded is ____________.

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. Petty cash book

  2. Double column cash book

  3. Journal proper

  4. None of the above

Show answer
Correct Option: A
Explanation:

The petty cash book is defined as relatively small amount of cash kept at hand  for making quick payments for miscellaneous small expenses in the business concern. A cash book which is created for the small payments of an organisation i.e. taxi fare, car fare, bus fare, postage and stamps etc. has a separate fund to meet the day to petty expenses in the office is called as petty cash book. It is established in the responsibility o petty cashier who maintains a separate cash book to record, such small payments only. It's a cash book to enter daily expenses like cost of stationary, postage and so on. The petty cash book will be maintained by separate cashier known as petty cashier in the accounting field.