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

Type of bank account in which money is deposited for fixed period of time _____________.

  1. D-mat

  2. Current

  3. Fixed deposit

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

A Fixed Deposit (FD) account is a bank account where a sum of money is deposited for a predetermined, fixed period of time at a fixed rate of interest.

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

Current account is more useful to businessman.

  1. True

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

A Current Account is highly useful for business owners because it has no transaction limits on deposits and withdrawals, and it offers essential business features like overdraft facilities.

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

Businessman generally operates savings bank account.

  1. True

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

Businessmen generally operate Current Accounts rather than Savings Accounts because of the high volume of daily transactions and the need for overdraft facilities, which are not supported by Savings Accounts.

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

Prepaid insurance is nominal account.

  1. True

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

Prepaid insurance represents an asset (a representative personal account) because it is a payment made in advance for future benefits. Nominal accounts only represent current expenses, losses, incomes, or gains.

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 book of original entry.

  1. True

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

Cash book is  a primary book of original entry and includes all cash transactions of the enterprise in a chronological  order. 

A cash book is a book of original entry because it is  the subsidiary book that records all the cash transactions of the business from the source document. 

Hence, cash transactions of a business are first recorded in the cash book, and thus, it is termed as a book of original entry.

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

There is no restriction on the operation of a Current A/c.

  1. True

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

Current Accounts are specifically designed for businesses and fluid transactions, meaning there are no restrictions on the number or amount of deposits and withdrawals.

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 fixed deposit A/c money once deposited can be withdrawn at any time.

  1. True

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

In a Fixed Deposit account, the money is locked in for a specified period. It cannot be freely withdrawn at any time without premature withdrawal penalties or formal closure procedures.

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

State whether the following statement is True or False.
Credit Balance of Bank Column of Cash Book represents the balance as per Cash Book.

  1. True

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

A credit balance in the bank column of the Cash Book represents a bank overdraft (an unfavorable balance), whereas a debit balance represents a favorable bank balance. Thus, the statement is False.

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 Saving A/c. no restrictions are put on withdrawal of cash.

  1. True

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

Savings accounts are subject to restrictions on the frequency and maximum amount of cash withdrawals to discourage frequent transactions and promote savings.

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/are forms of a cash book.

  1. Single column cash book

  2. Double&nbsp;<span>column cash book</span>

  3. Three&nbsp;<span>column cash book</span>

  4. All of the above
Reveal answer Fill a bubble to check yourself
D 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. This is a very popular book and is maintained by all the organisation, big or small, profit or not-for-profit. It serves the purpose of both journal as well as ledger account. 
It is also called the book of original entry. 
Single column cash book, Double column cash book and Three column cash book are all forms of a cash book.