Tag: elements of book keeping and accountancy

Quizzes (38) Questions (832)

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

Goods worth Rs. 45,000 sold to Tarun for cash will be recorded in_________.

  1. Cash book

  2. Sales book

  3. Journal book

  4. Stock register
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. 


This is very popular book and is maintained by all organisations, big or small, profit or not-for-profit. It serves the purpose of both journal as well as the ledger (cash) account. It is also called the book of original entry. 

When a cash book is maintained, transactions  of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger. 

For example, goods worth Rs. 45,000 sold to Tarun for cash will be recorded in the 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

Goods worth Rs.15,000 purchased from Tarun for cash will be recorded in________.

  1. Cash book credit side

  2. Sales book

  3. Journal book

  4. Stock register
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Journal Entry that should be entered in books :-

(i) Purchase A/c Dr.      15000
     To Cash A/c                              15000
(Being goods purchased for cash)
Hence, This will be shown in credit side of cash book.
By Purchase A/c     15000

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

If Sandeep sold goods for Cash, it will be recorded in _____________.

  1. Sales Book

  2. Cash Book

  3. None of these

  4. Both of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Even though it is a sale of goods, because it is conducted in cash, it must be recorded in the Cash Book. The Sales Book is reserved exclusively for credit sales of goods.

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 Cash Book records ________________.

  1. All Cash Receipts

  2. All Cash Payments

  3. All Cash Receipts and Payments

  4. Cash and Credit Sale of Goods.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Cash Book functions as a subsidiary book that records all cash and bank transactions, which includes both cash receipts (debits) and cash payments (credits).

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

Balance in the Cash Book shows net income.

  1. True

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

The balance in the Cash Book represents the cash in hand and cash at bank at a specific point in time. It does not show net income, which is calculated by subtracting total expenses from total revenues in the Income 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

Cash book is a type of _______ but it is considered a ___________ of account.

  1. subsidiary book, principal book

  2. principal book, subsidiary book

  3. subsidiary book, subsidiary book

  4. principal book, principal book.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Cash Book is a subsidiary book because transactions are recorded directly in it first. However, because it also serves as the cash and bank ledger accounts, eliminating the need for separate ledger accounts, it is also considered a principal 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 opening balance on the debit side of the bank column in Cash Book indicates ___________.

  1. The total amount withdrawn from the bank

  2. The total amount deposited in the bank

  3. Cash at bank

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

Since the bank account is an asset, a debit balance represents a positive, favorable balance. Therefore, an opening debit balance in the bank column indicates cash available at the bank.

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

Direct payment to third party by the bank on behalf of the account holder is entered in ___________.

  1. the cash book when the amount is paid by the bank

  2. the cash book when the entry is posted in the pass book

  3. the pass book when the amount is paid by the bank

  4. both (b) and (c)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When the bank makes a direct payment, it records the transaction immediately in the Pass Book. The account holder only records it in the Cash Book later, once they receive the bank statement (Pass Book) and see the 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

Cash book does not record _______________.

  1. Credit Purchases

  2. Credit Sales

  3. Outstanding Expenses

  4. All of these transactions.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Cash Book is strictly reserved for recording cash and bank transactions. Credit purchases, credit sales, and outstanding expenses do not involve immediate cash flow and are therefore not recorded in the 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

Which of the following will not be considered while preparing an amended cash book?

  1. Cheques issued but not presented for payment

  2. Cheques deposited but not credited by bank

  3. Any wrong entry in the pass book

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

An amended cash book is adjusted only for correct transactions that were omitted or recorded incorrectly in the cash book. Timing differences (like unpresented or uncleared cheques) and bank errors are not adjusted in the cash book; they are only reconciled in the Bank Reconciliation Statement.