Commerce Accountancy · General Awareness
Banking and Cash Transactions
990 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
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Cash book error
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Pass book error
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Timing difference
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All of above
A
Correct answer
Explanation
To calculate the amended cash book balance, only Cash book errors are taken into consideration.
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all the errors and omissions in the cash book are taken into consideration
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all the errors and omissions in the pass book are taken into consideration
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delay in recording in the pass book due to difference in timing are taken into consideration
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all of the above
A
Correct answer
Explanation
While adjusting the cash book, all the errors and omissions in the cash book only are taken into consideration.
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Rectified cash book having two columns.
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Rectification of cash book before preparation of BRS.
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Rectification of cash book after preparation of BRS.
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Rectified cash book having three columns.
B
Correct answer
Explanation
Amended cash book is A financial journal that contains all cash receipts and payments, including bank deposits and withdrawals, and it is rectified before the preparation of BRS.
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Rs. 14, 000
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Rs. 24, 000
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Rs. 72, 000
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Rs. 82, 000
C
Correct answer
Explanation
Balance as per cash Book- Rs. 48, 000
A cheque issued worth but not cleared (+) Rs. 24, 000 ( when it was issued the amount got subtracted from cash book but as the information provided in the question, it has not been cleared that means has not been subtracted from Pass book so it will be added again in the cash book also. )
Cheque worth Rs. 10, 000 received on 20th January, and deposited on 21.1.98, was cleared on 27.1.98 - NO EFFECT (for this entry both the Pass book and Cash book stands same.)
So, 48,000 + 24,000= Rs. 72,000
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Cash deposited into bank
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Cash withdrawn from the bank
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Cash withdrawn from the bank for personal use
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None of these
C
Correct answer
Explanation
Contra entries in a three-column cash book are transactions that involve both cash and bank accounts, recorded on both sides. Cash withdrawn for personal use is NOT a contra entry because it's only recorded on the payment side (bank column) and doesn't have a corresponding cash receipt.
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on the receipt side of the cash book
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on the payment side of the cash book
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as a contra entry
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nowhere in the cash book
D
Correct answer
Explanation
Outstanding salaries (salaries due but not paid) are an accrued expense. They are recorded through a journal entry and appear in the ledger, NOT in the cash book. The cash book only records actual cash transactions.
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cash column on the debit side
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bank column on the debit side
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cash column on the credit side
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cash column on the debit side and credit side
A
Correct answer
Explanation
A cheque received but not deposited the same day represents cash in hand. In a triple column cash book, such cheques are initially recorded in the cash column on the debit side because the business holds them physically until bank deposit. The bank column entry is made only when the cheque is actually deposited into the bank account.
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bills receivable book
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journal proper
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three column cash book
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none of the above
B
Correct answer
Explanation
When a bill receivable that was retained (not discounted with the bank) is dishonoured, there is no specialized book to record this event. The dishonour requires reversing the original bill entry and recording the debt recovery process, which is done in the journal proper (general journal). The bills receivable book only records initial bill creation, not subsequent dishonours.
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Paper deposits
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Nominal deposits
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Cash deposits
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Real deposits
D
Correct answer
Explanation
Real deposits are deposits that are backed by actual cash reserves held by the bank. This distinguishes them from paper deposits which may not have full cash backing. Cash deposits would be a literal answer, but 'real deposits' is the technical economic term.
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Bank a/c Dr to Cash a/c
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Cash a/c Dr to Bank a/c
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Cash a/c Dr to Suspense a/c
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Suspense a/c Dr to Bank a/c
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Bank a/c Dr to Ram's a/c
A
Correct answer
Explanation
Both the accounts are real accounts. Debit what comes in and credit what goes out.
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Purchases a/c Dr to Cash a/c to Bank a/c
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Purchases a/c Dr to Cash a/c
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Cash a/c Dr to Purchase a/c
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Bank a/c Dr to Purchases a/c
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Goods a/c Dr to Cash a/c to Bank a/c
A
Correct answer
Explanation
Purchases a/c is debited as it is an expense. Cash a/c and bank a/c are credited as payment is made and both the cash and the bank balance are decreasing.
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Delivery Challan
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Invoice
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Credit/Debit Note
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Proforma Invoice
D
Correct answer
Explanation
A Proforma Invoice is different insofar as it is for the sake of form only. It is neither entered into books nor charged to the account of the recipients. It may be used for several purposes including: as a quotation, to enable calculation of taxes and duties payable, etc.
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Confidentiality
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Integrity
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Non-repudiation
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Authentication
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None of these
C
Correct answer
Explanation
Non-repudiation disallows A to refuse this claim that he had not written the check.
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from the date of acceptance of the bill
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from the date of drawing a bill
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from the date of receipt of the accepted bill
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from the date of receipt of drawn bill
B
Correct answer
Explanation
When a bill is drawn 'after date', the term of the bill commences from the date of drawing the bill and when the bill is drawn aftersight, the term of the bill begins from the date of 'sighting', i.e. when the bill is accepted.
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drawer
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holder of bill of exchange
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drawee
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none of these
C
Correct answer
Explanation
When a Bill gets dishonored, holder of the bill pays the notory charges, but Notory charges are recovered from drawee.