Tag: recording and posting of cash transactions

Questions Related to recording and posting of cash transactions

Cash book does not record transaction of _____________.

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 nature

  2. Credit nature

  3. Cash and credit nature

  4. None of these

Show answer
Correct Option: B
Explanation:

Credit transactions are not recorded in Cash Book.

Credit balance shown by a bank column in cash book is ______.

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

  2. Overdraft

  3. Cash credit

  4. None of the above

Show answer
Correct Option: B
Explanation:

The debit balance as per the cash book means the balance of deposits held at the bank.

It indicates the favourable balance as per cash book or favourable balance as per the passbook. On the other hand, the credit balance as per the cash book indicates bank overdraft.

Cash book is a _______( journal).

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. Subsidiary 

  2. Purchase 

  3. Sales 

  4. Purchase and Sales Return

Show answer
Correct Option: A
Explanation:

A cash book is a subsidiary to the general ledger in which all cash transactions during a period are recorded.

Cash book does not record the _________ transactions.

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

  2. Purchase

  3. Credit

  4. All of the above

Show answer
Correct Option: C
Explanation:

All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side as a debit, and all cash payments are recorded by date on the right-hand side as a credit.

Cash received in entered on the debit side 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. True

  2. False

Show answer
Correct Option: A
Explanation:

The recording of transactions in the cash book takes the shape of a ledger account. Receipts of cash are entered on the debit side and cash payments on the credit side, there is no need of cash account in the ledger books of a firm. 

Cash book records transactions relating to receipts and payments.

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

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.

Cash purchases ________________.

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. increase assets

  2. result in no change in the total assets

  3. decrease assets

  4. increase liability

  5. decrease liability

Show answer
Correct Option: B

In the particulars account the name of the account to be credited is entered at ___________ place with a prefix 'To'.

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. in confirmation of the name of the account to be debited

  2. next line to the account name that is to debited

  3. anywhere in the journal

  4. none of the above

Show answer
Correct Option: A

Which of the following will disturb the balancing of the trial balance?

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. Error in adding up a book of prime entry

  2. Entering an acquisition of an asset, on credit terms, in the Purchases Day Book

  3. Posting to an asset account instead of an expenditure account

  4. Entering a wrong amount in a book of prime entry

Show answer
Correct Option: A

The data and month of the first entry are written ___________.

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. on the next line of the data column

  2. on the same line of the data column

  3. on a line above the data column

  4. at the left of the data column

Show answer
Correct Option: A