Tag: recording and posting of cash transactions

Questions Related to recording and posting of cash transactions

Current account is more useful to businessman.

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. True

  2. False

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Correct Option: A

Businessman generally operates savings bank account.

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. True

  2. False

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Correct Option: B

Prepaid insurance is nominal account.

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. True

  2. False

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Correct Option: B

Cash book is a book of original entry.

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. True

  2. False

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Correct Option: A
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.

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

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. True

  2. False

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Correct Option: A

In fixed deposit A/c money once deposited can be withdrawn at any time.

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. True

  2. False

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Correct Option: B

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

  2. False

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Correct Option: B

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

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. True

  2. False

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Correct Option: B

_________ is/are forms of a 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. Single column cash book

  2. Double column cash book

  3. Three column cash book

  4. All of the above

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Correct Option: D
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.

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

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. Cash book

  2. Sales book

  3. Journal book

  4. Stock register

Show answer
Correct Option: A
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.