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

A credit balance in the book statement indicates _____________.

  1. Cash at bank

  2. Cash in hand

  3. Bank overdraft

  4. Overpayment to creditors
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A credit balance in the bank statement (often referred to as the pass book) indicates a positive balance, meaning there is cash at the bank. Conversely, in the business's own cash book, a credit balance would indicate a bank overdraft. The term 'book statement' is a common typographical error for 'bank statement'.

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

When obsolete assets are sold on credit, these are originally recorded in the _____________.

  1. Sales day book

  2. Sale account

  3. General journal

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

Credit sales of assets other than trading goods (such as obsolete machinery or furniture) cannot be recorded in the sales day book, which is reserved exclusively for credit sales of inventory. Instead, these transactions must be recorded in the general journal (journal proper).

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 is/are features of cash book ? 

  1. All cash transactions are recorded chronologically in the cash book.

  2. It records only one aspect of transaction i.e cash.

  3. It performs the functions of both journal and ledger at the same time .

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

The cash book records all cash receipts and payments in chronological order, acting as a book of original entry (journal). Since it also serves as the cash and bank accounts, it eliminates the need to maintain separate cash and bank accounts in the ledger. Therefore, it performs the dual role of both journal and ledger, making all the listed statements correct features.

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 is the kind of a cash book ? 

  1. Single Column Cash Book

  2. Double Column Cash Book

  3. Three Column Cash Book

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

Cash books can be maintained in various formats depending on the needs of the business. These include a single-column cash book (cash only), a double-column cash book (cash and discount, or cash and bank), and a three-column cash book (cash, bank, and discount). Thus, all of these are recognized types of cash books.

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 is/are features of cash book?

  1. It performs the functions of both journal and ledger at the same time.

  2. Cash receipts are recorded in the credit side and cash payments are recorded in the debit side.

  3. IT records two aspect of transaction i.e cash & credit.

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

The cash book acts as both a book of original entry (journal) and a principal book of accounts (ledger), meaning it performs both functions simultaneously. Option B is incorrect because cash receipts are recorded on the debit side and payments on the credit side. Option C is incorrect because the cash book only records cash transactions, not credit transactions.

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 in the form of ___________.

  1. Journal

  2. An account

  3. Statement

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

Although the cash book serves the purpose of a journal, it is prepared in the form of a ledger account with debit and credit sides. Transactions are recorded directly into it with 'To' and 'By' prefixes, just like in a T-account. Therefore, its physical layout and structure are in the form of an account.

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 is type of cash book ? 

  1. Single Column Cash Book

  2. Two Column Cash Book

  3. Three Column Cash Book

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

A cash book can be classified into different types based on the columns it contains. These include the single-column cash book, the two-column (double-column) cash book, and the three-column cash book. Therefore, all the options listed are valid types of cash books.

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

The details of goods returned by the customers to the business organization are recorded in ________ book. 

  1. Sales Returns Book

  2. Purchase Returns Books

  3. Journal Proper

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

When customers return goods that were previously sold to them on credit, these transactions are recorded in the sales returns book (also known as the return inwards book). The purchase returns book is used for goods returned by the business to its suppliers. Journal proper is used for transactions that do not fit into any other subsidiary books.

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

The total amount column of the sales return books is _________________.

  1. Credited to purchases return account

  2. Debited to sales return account

  3. Credited to sales return account

  4. Debited to purchases returns account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sales return is an expense/contra-revenue account, which carries a normal debit balance. Therefore, at the end of a period, the total of the sales returns book is debited to the sales return account in the ledger. Individual customer accounts are credited to reduce their outstanding balances.

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

_______is the book in which all transactions concerning cash receipts and cash payments are recorded.

  1. Journal proper

  2. Cash book

  3. Sales book

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

The cash book is a specialized subsidiary book used exclusively to record all cash receipts and cash payments. Journal proper is used for transactions that cannot be recorded in any other subsidiary book, and the sales book is used only for credit sales of goods.