Commerce Accountancy · General Awareness

Banking and Cash Transactions

1,011 Questions

This collection covers essential concepts related to banking and cash transactions. It includes questions on outstanding cheques, petty cash, bank reconciliations, and negotiable instruments. These topics are highly relevant for accounting exams and test practical financial knowledge.

Bank reconciliation statementsCheques and noting chargesPetty cash usageNegotiable Instruments ActCash book entriesStamp Duty Act

Banking and Cash Transactions Questions

Multiple choice

Money Bill has been discussed in

  1. Article 124

  2. Article 110

  3. Article 112

  4. Article 142
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Article 110 of the Indian Constitution defines the procedure and content of a Money Bill.

Multiple choice

Which of the following is not a kind of cash book?

  1. Single column cash book

  2. Two column cash book

  3. Three column cash book

  4. Four column cash book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

There is no cash book with four columns. There can be maximum three columns in the cash book - ( cash, bank and discount columns ). 

Multiple choice

A cheque of Rs. 5,600 is received from Sharma & Sons and is sent to bank, but not yet collected by the bank. It would be

  1. posted in debit side of cash book and credited in pass book

  2. debit side of cash book only

  3. credit side of cash book only

  4. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 It would be posted in debit side of cash book only.The customer would make the entry when it is sent to bank for collection. But it would be credited in pass book only when it is collected by bank. Its amount is not yet collected by bank and so it would not be posted in pass book.

Multiple choice

A cheque of Rs. 2,400 is issued to Ramesh & Brothers and it is presented for payment by them. It would be

  1. posted in credit side of cash book only

  2. debited in pass book only

  3. posted in credit side of cash book and debited in pass book

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It would appear both in credit side of cash book and debited in pass book. As the cheque has been issued it would be posted in credit side of cash book by the customer. The cheque has been presented for payment so it would be debited in pass book.

Multiple choice

A drawer is

  1. a person to whom the payment is to be made.

  2. a creditor who is entitled to receive the money.

  3. Both 1 and 2

  4. none of these.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The person who is entitled to receive the money is the drawer.

Multiple choice

Noting charges are paid when a

  1. bill is discounted

  2. bill is paid on or before the due date

  3. bill is dishonoured on due date

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If the bill is not paid on due date, to give a proof that bill was dishonoured despite its due presentation has got to be noted by 'Notary Public'. A fees is charged for this.

Multiple choice

''A/c payee'' crossing refers to

  1. the amount of cheque can be paid to any person.

  2. the amount of the cheque can be deposited only in the account of the person whose name is written on it.

  3. a cheque can be transferred by mere delivery.

  4. None of these.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A/c payee only refers to the amount of cheque that can be deposited in the account of that person only whose name is written on it.