Tag: recording and posting of cash transactions

Questions Related to recording and posting of cash transactions

The balance in the Petty Cash Book represents income.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

Show answer
Correct Option: B

The balance in the Petty Cash Book represents expenses.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

Show answer
Correct Option: B

The balance in the petty cash book is ____________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. an expense

  2. a profit

  3. an asset

  4. a liability

Show answer
Correct Option: C

Petty cash may be used to pay ______________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. The expenses relating to passages and conveyance

  2. Salaries and wages to the manual staff

  3. For the purchase of furniture and fittings

  4. None of these.

Show answer
Correct Option: A

Balance in a petty cash book is _______.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. an expense

  2. a profit

  3. an asset

  4. None of these

Show answer
Correct Option: C

Fixed assets are __________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Kept in the business for use over a long time of earning income

  2. Meant for resale

  3. Meant for conversion into cash as quickly as possible

  4. All of the above

Show answer
Correct Option: A
Explanation:

 A fixed asset is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income. Fixed assets are not expected to be consumed or converted into cash within a year. Fixed assets most commonly appear on the balance sheet as property, plant, and equipment (PP&E).

The petty cashier generally works on _______ system.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Balancing

  2. Accrual

  3. Matching

  4. Imprest

Show answer
Correct Option: D

Petty Cash Book may be treated as a __________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Part of the double entry system

  2. Merely as a memoranda book

  3. Either (A) or (B)

  4. None of the above

Show answer
Correct Option: C

Payments in cash of small amounts like travelling expenses, postage, carriage etc. are recorded in the ________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Main Cash book

  2. Petty cash book.

  3. Cash budget

  4. Journal proper

Show answer
Correct Option: B

Which of the following is/are advantages of the imprest system?

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. It saves the time of chief cashier

  2. It reduces the chances of misuse of cash by the petty cashier.

  3. It enables a great saving to be effected in the posting of small items to the ledger accounts.

  4. All of the above

Show answer
Correct Option: D