Tag: elements of book keeping and accountancy

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Questions Related to elements of book keeping and accountancy

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

Deposit column of pass book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point __________ .

  1. Rs. 112 to be added

  2. Rs. 112 to be subtracted

  3. No adjustment is required

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

A wrong entry in the deposit column of the pass book increases the pass book balance. Since we are starting from the Cash Book balance to reconcile with the Pass Book balance, we must add Rs. 112 to align the two records.

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 cheque is considered as stale when if has been in circulation for _______________.

  1. more than forty eight hours

  2. more than one year

  3. more than six months unless otherwise specified

  4. more than three months
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under current banking regulations (such as those in India since April 2012), a cheque is considered stale and is no longer honored by the bank if it has been in circulation for more than three months.

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 purchase is accounted in the _______ account. 

  1. Purchases 

  2. Joint venture 

  3. Private

  4. Cash 
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Cash purchase will affect two accounts i,e. goods and cash. Cash purchases will be recorded in cash book.

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 term banking is defined in section _________.

  1. Section 5 of Banking Regulation Act

  2. Section 4

  3. Section 7

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

As per Section 5(b) of the Banking Regulation Act, 1949 , "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.

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 sales are recorded in __________.

  1. Sales Book

  2. Cash book

  3. Journal

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

All the cash transactions are recorded in cash book. 

Sales against cash will increase the cash and decrease the goods.

Accounting entry will be passed as under:

Cash A/c                                Dr,
           To Sales/Goods A/c

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 subsidiary book in which details of cash received in the form of currency, cheques, drafts, etc. and details of payment made in cash or by cheques, and drafts is called cash book.

  1. True

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

This statement is true because the Cash Book is specifically designed as a subsidiary book to record all transactions relating to cash receipts and payments, whether in currency, cheques, or drafts.

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 cash discount received and allowed is recorded.

  1. Sales book

  2. Purchase book

  3. Petty cash book

  4. Journal proper
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal Residual. When the journal is sub-divided into various subsidiary books, such as, Sales Book, Purchase Book, etc. The Journal becomes the residuary book in which only those transactions are recorded that cannot be recorded in any other subsidiary book. This type of journal is called journal proper. The following types of entries are recorded in Journal Proper:

a. Opening entry
b. Closing entry
c. Transfer entries
d. Rectification entries
e. Adjustment entries
f. Miscellaneous entries such as discount received, bad debts written off, etc.
Thus, cash discount received and allowed is recorded in the 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

Book in which small payments are recorded is ____________.

  1. Petty cash book

  2. Double column cash book

  3. Journal proper

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

The petty cash book is defined as relatively small amount of cash kept at hand  for making quick payments for miscellaneous small expenses in the business concern. A cash book which is created for the small payments of an organisation i.e. taxi fare, car fare, bus fare, postage and stamps etc. has a separate fund to meet the day to petty expenses in the office is called as petty cash book. It is established in the responsibility o petty cashier who maintains a separate cash book to record, such small payments only. It's a cash book to enter daily expenses like cost of stationary, postage and so on. The petty cash book will be maintained by separate cashier known as petty cashier in the accounting field. 

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

Type of bank account in which bank keeps no restrictions on depositing cash but imposes restrictions on withdrawals of cash.

  1. Current

  2. Saving

  3. D - mat

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

A Savings Account is designed to encourage savings among individuals, so banks allow unlimited deposits but impose restrictions on the frequency and amount of withdrawals. Current accounts, by contrast, generally have no such withdrawal restrictions.

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

Type of bank account in which overdraft facility is given to account holder.

  1. Saving account

  2. D-mat account

  3. Current account

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

An overdraft facility allows account holders to withdraw more money than they currently have in their account. This facility is primarily offered on Current Accounts to support the short-term working capital needs of businesses.