Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

A General Cash book acts as a __________.

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

  1. Journal

  2. Ledger

  3. Both

  4. None

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Correct Option: C
Explanation:

A cashbook is a book of prime entry in which cash and bank transactions of business are recorded. It acts as a book of original entry and a ledger. Hence, it is both Journal and Ledger.

A discount of Rs. 2000 was given to a supplier on his prompt repayment of debt but the cashier did not enter in the cash book. What should be the adjustment in cash to work out the correct balance of cash book? 

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

  1. Rs.2000 will be debited in cash book

  2. Rs.2000 will be credited in cash book

  3. Rs.4000 will be debited in cash book

  4. Rs.4000 will be credited in the cash book

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Correct Option: B

Goods returned by customer should be debited to which of the following accounts?

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

  1. Sales income account

  2. Sales account

  3. Return inward account

  4. Expenses account

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Correct Option: C

A company was entered in hire purchase agreement and had to pay Rs.1000 per month. Three payment we accounted but no entry was found in cash book. Identify the correct adjustment in cash book. 

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

  1. Rs. 1000 will be added to cash book balance

  2. Rs. 2000 will be deducted from cash book balance

  3. Rs. 3000 will be added to cash book balance

  4. Rs. 3000 will be subtracted from cash book balance

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Correct Option: A

Bank charges amounting to Rs. $5000$ was not entered in the cash book. Identify the correct adjustment in accounts_____________.

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

  1. bank charges will be debited in cash book

  2. bank charges will be added to cash book balance

  3. bank charges will be credited in cash book

  4. bank charges need no adjustment in cash book

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Correct Option: C

Favourable balance of cash book implies the ___________.

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

  1. credit balance of cash book

  2. debit balance of cash book

  3. bank overdraft

  4. adjusted balance of cash book

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Correct Option: B

In case of three columnar cash book, contra entry is used for ____________.

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

  1. Bank account only

  2. Cash and discount account

  3. Cash account only

  4. Cash and bank account

Show answer
Correct Option: D
Explanation:

In case of Contra Entry of cash book when a transaction involves both cash and bank accounts, it is entered on both sides of the cash book, one in the cash column and other in the bank column, though on opposite sides.

A record of transaction between the bank and the holder of ____________ is bank statement.

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

  1. A foreign currency account

  2. A current account

  3. A saving account

  4. All of the above

Show answer
Correct Option: D
Explanation:

A bank statement is a document (also known as an account statement) that is typically sent by the bank to the account holder every month, summarizing all the transactions of an account during the month.

It includes current account holder, saving account holder and foreign currency account holder.

If a piece of furniture's list price is f $28,000$ and it is sold at 10%trade discount and 2%cash discount. The cash safe price of furniture would be ________________.

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

  1. Rs. $25,200$

  2. Rs. $24,640$

  3. Rs. $24,696$

  4. None of above

Show answer
Correct Option: C
Explanation:

Trade discount on furniture = 28000*10/100

                                               = 2800
Sale price of furniture would be Rs 25200 (28000-2800)
Cash Sale price after allowing cash discount 2% is Rs 24696.
Cash discount = 25200*2/100
                         = 504
   25200 - 504 = 24696 

Which of the following is a double column cash book?

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

  1. One column for cash and another for bank

  2. One column for cash and another for discount

  3. One for bank and another for discount

  4. All of the above

Show answer
Correct Option: D