Tag: elements of book keeping and accountancy

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Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

The closing balance of the petty cash book is_______.

  1. Expense/expenditure

  2. Profit/ gain

  3. Assets

  4. Liability
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The closing balance of petty cash book is considered as Asset. 

Petty Cash is a current asset account; it is part of a company's cash.

Petty cash Book is just like a cash book , its just that this book maintains petty cash expenses separately as against the normal cash book . 
Therefore, balance of petty cash book is an asset & an not income. Its used for paying out petty expenses.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

_________ is the book which is used for the purpose of recording the payment of petty cash expenses.

  1. Cash book

  2. Bank&nbsp;<span>book</span>

  3. Petty cash Book

  4. Miscellaneous Expenses Book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In every organisation, a large number of small payments such as conveyance, cartage, postage, telegrams and other expenses are made. These are generally repetitive in nature. 

If all these payments are handled by the cashier and are recorded in the main cash book, the procedure is found to be very cumbersome. The cashier may be overburdened and the cash book may be become very bulky. 
To avoid this, large organisations normally appoint one more cashier and maintain a separate cash book to record these transactions. Such a cash book maintained by petty cashier is called petty cash book. It is used for the purpose of recording the payment of petty cash expenses.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

Petty cash may be used to pay ______________________.

  1. The expenses relating to passages and conveyance

  2. Salaries and wages to the manual staff

  3. For the purchase of furniture and fittings

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

Petty cash is used for small, frequent expenses like postage, stationery, conveyance, and tea/coffee.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

Fixed assets are __________________.

  1. Kept in the business for use over a long time of earning income

  2. Meant for resale

  3. Meant for conversion into cash as quickly as possible

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A fixed asset is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income. Fixed assets are not expected to be consumed or converted into cash within a year. Fixed assets most commonly appear on the balance sheet as property, plant, and equipment (PP&E).