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 explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Total of the debit side of cash book is ___ than the credit side.

  1. More

  2. Equal to

  3. Less 

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

When the total of debit column of the Cash Book (Bank column) is more than the total credit column of Cash Book (Bank column), it is known as debit balance. That is, there is a favourable balance of cash deposited at the bank. When Cash Book balance is given, it is treated as debit balance.

Multiple choice 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

Credit balance shown by a bank column in cash book is ______.

  1. Cash

  2. Overdraft

  3. Cash credit

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

The debit balance as per the cash book means the balance of deposits held at the bank.

It indicates the favourable balance as per cash book or favourable balance as per the passbook. On the other hand, the credit balance as per the cash book indicates bank overdraft.

Multiple choice 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

Cash book is a _______( journal).

  1. Subsidiary 

  2. Purchase 

  3. Sales 

  4. Purchase and Sales Return
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A cash book is a subsidiary to the general ledger in which all cash transactions during a period are recorded.

Multiple choice 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

Cash book does not record the _________ transactions.

  1. Cash

  2. Purchase

  3. Credit

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

All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side as a debit, and all cash payments are recorded by date on the right-hand side as a credit.

Multiple choice 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

Cash received in entered on the debit side of cash book.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The recording of transactions in the cash book takes the shape of a ledger account. Receipts of cash are entered on the debit side and cash payments on the credit side, there is no need of cash account in the ledger books of a firm. 

Multiple choice 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

Cash book records transactions relating to receipts and payments.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis.

Multiple choice 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

Cash purchases ________________.

  1. increase assets

  2. result in no change in the total assets

  3. decrease assets

  4. increase liability

  5. decrease liability
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A cash purchase involves exchanging one asset (cash) for another asset (such as inventory or equipment). Because one asset decreases and another increases by the exact same amount, there is no net change in total assets.

Multiple choice 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

In the particulars account the name of the account to be credited is entered at ___________ place with a prefix 'To'.

  1. in confirmation of the name of the account to be debited

  2. next line to the account name that is to debited

  3. anywhere in the journal

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice 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

Which of the following will disturb the balancing of the trial balance?

  1. Error in adding up a book of prime entry

  2. Entering an acquisition of an asset, on credit terms, in the Purchases Day Book

  3. Posting to an asset account instead of an expenditure account

  4. Entering a wrong amount in a book of prime entry
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An error in casting (adding up) a book of prime entry will result in an incorrect total being posted to the corresponding ledger account (e.g., Purchases Account), while the individual ledger accounts of suppliers are posted with correct individual amounts. This creates a one-sided error that prevents the trial balance from balancing.