Tag: subsidiary books - 2

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Questions Related to subsidiary books - 2

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

A three-column Cash Book will disclose a bank overdraft when there is __________.

  1. debit balance of cash column

  2. credit balance of cash column

  3. debit balance of bank column

  4. credit balance of bank column
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An overdraft occurs when the bank balance is negative. In a three-column cash book, a negative bank balance is represented by a credit balance in the bank column.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

Contra entries are passed only when ____________.

  1. double-column cash book is prepared

  2. three-column cash book is prepared

  3. simple cash book is prepared

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

Contra entries require both a cash column and a bank column to be present in the same book, which is a feature of a double-column or three-column cash book.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

Which of the following will be recorded as Contra Entry?

  1. Withdrew from bank for personal use

  2. A cheque received from X lodged into bank on the same day

  3. A cheque received from Y a week earlier lodged into bank

  4. A customer directly deposited the money in our bank account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A contra entry occurs when a transaction affects both the cash and bank columns of the cash book. Depositing a cheque received earlier into the bank involves moving funds from 'cash in hand' (or cash transit) to the bank account, which is a contra entry.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

Salaries due for the month will appear________.

  1. On the receipt side of the cash book

  2. On the payment side of the cash book

  3. As a contra entry

  4. Nowhere in the cash book.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Salaries due represent an outstanding liability rather than an actual cash outflow. Since the cash book only records actual receipts and payments of cash or bank transactions, an accrual does not appear in it.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

In arriving at adjusted cash balance which of the following is not taken into account?

  1. Amount deposited by our customer direct into our bank account

  2. Errors in the cash book

  3. Errors in the pass book

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

An adjusted cash book is prepared to update the cash book balance for items already recorded by the bank but not yet in the cash book. Errors in the pass book are bank-side issues that are reconciled in the Bank Reconciliation Statement, not the cash book itself.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

In a Three-Column cash book, which of the following is correct?

  1. Trade discount allowed is recorded on the debit side of cash book

  2. Cash discount received is recorded on the credit side of cash book

  3. Discount columns are balanced

  4. Cash discount received is recorded on the debit side of cash book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a three-column cash book, the discount column is used to record cash discounts. Cash discounts received are a reduction in payment, so they are recorded on the credit (payment) side of the cash book.

Multiple choice commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

If the debit as well as the credit aspects of a transaction are recorded in the cash book itself, it is called ______________.

  1. An opening entry

  2. A compound entry

  3. A transfer entry

  4. A contra entry.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, contra entry will be recorded on the credit side and vice-versa.