Banking and Cash Transactions

Depositing money into a bank account reduces the amount of physical cash on hand. In a double-column cash book, this decrease is recorded by crediting the cash column.

When expenses are paid via bank, the transaction is recorded in the bank column of the cash book. Since the physical cash held by the business is not touched, the cash column remains unaffected.

Withdrawing cash for personal use is a type of drawing that reduces the business's cash balance. Because it is a cash outflow, it is recorded on the credit side of the cash book.

Receiving a cheque and depositing it on the same day increases the bank balance of the business. In accounting, an increase in an asset like a bank balance is recorded on the debit side.

A cheque that has been received but not yet deposited is generally treated as 'Cash in Hand' rather than a bank balance. Therefore, it does not affect the bank column of the cash book until the moment it is actually deposited.

A credit balance in the bank column of a cash book indicates that the business has withdrawn more money than it has deposited. This situation is known as a bank overdraft and is treated as a liability.

Depositing cash into a bank account is a contra entry that involves two columns of the cash book. The cash column is credited because physical cash is leaving, and the bank column is debited because the bank balance is increasing.

When a cheque is issued to a creditor, the liability towards that creditor decreases. According to the rules of personal accounts, the receiver (the creditor) is debited, while the bank account is credited as the source of funds.

Wages are an expense for the business. According to the rules of nominal accounts, all expenses and losses must be debited, while the bank account is credited because the payment is made by cheque.

Here, 'above board' is the correct option as it implies dealings that are open, honest and legal. 

Under the Negotiable Instruments Act in India, the dishonour of a cheque due to insufficient funds is a criminal offence punishable by imprisonment or fines.

An overdraft is a credit facility that allows a bank customer to withdraw more money than is available in their current account, up to an approved limit.

The term 'Plastic Money' is a common colloquialism for credit cards, debit cards, and other payment cards made of plastic.

Black money is income on which tax has been evaded - it's legally earned but illegally concealed from tax authorities. Counterfeit currency is fake money, not undeclared income. Money from underhand deals is one source of black money, but 'black money' specifically refers to the tax evasion aspect, not how it was obtained.

LIC accepts premium payments through various modes, including cash, cheque, and electronic clearing services (ECS), making all listed options valid.