Tag: simple cash boook

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Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

Rent outstanding for the month of February will appear_________.

  1. on the debit side of the cash book

  2. on the credit side of the cash book

  3. as a contra entry in the cash book

  4. no entry in the cash book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Outstanding rent is a liability that has not yet been paid in cash. Since no cash has moved, it is not recorded in the cash book.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

Withdrawl column of the Pass Book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point __________.

  1. Rs. 112 to be added

  2. Rs. 112 to be subtracted

  3. No adjustment in required

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If the pass book shows a withdrawal that did not occur (or was recorded incorrectly), the pass book balance is lower than it should be. To reconcile with the cash book, you must subtract the error from the cash book balance.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

A debit balance of Rs. 1,000 has been brought forward as a credit balance of Rs. 100 on the next page in the Pass Book. To ascertain the balance as per Cash Book _______________________.

  1. Rs. 900 should be added to the balance as per Cash Book.

  2. Rs. 900 should be subtracted from the balance as per Pass Book

  3. Rs. 1,100 should be added to the balance as per Pass Book

  4. None of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A debit balance of 1000 brought forward as a credit balance of 100 is an error of 1100. The reconciliation requires adjusting for the difference in the pass book to match the cash book records.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

One outgoing cheque of Rs. 112 recorded as Rs. 121 in the Cash Book. (Note: This cheque was presented in the Bank). When the balance as per Cash Book is the starting point.

  1. Rs. 112 to be subtracted

  2. Rs. 121 to be subtracted

  3. Rs. 9 to be added

  4. Rs. 112 to be added
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The cash book was overstated by 9 (121 - 112). Since the cash book is the starting point and it is too high, you must subtract the excess or add the difference if the logic is reversed. Wait, if cash book is the starting point and it is recorded as 121 (payment) instead of 112, the cash book balance is 9 less than it should be. Thus, 9 should be added.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

Debit balance in cash book means __________.

  1. Overdraft as per pass book

  2. Overdraft as per cash book

  3. Credit balance as per pass book

  4. Debit balance as per day book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The debit balance as per the cash book means the balance of deposits held at the bank. Such a balance will be a credit balance as per the passbook. Such a balance exists when the deposits made by the firm are more than its withdrawals.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

Cash paid to Creditors needed for the construction of cash account can be ascertained from __________________ .

  1. Total creditors account

  2. Trading account

  3. Profit and loss account

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Single-entry accounting is a form of bookkeeping and accounting in which each financial transaction is a single entry in a journal or transaction log. As a result, the accounting system is called, not surprisingly, a single-entry system. And, the approach is also known as single-entry bookkeeping.

In single-entry bookkeeping informations related to accounts are incomplete.
In the given question if the amount of cash paid to creditors needed for the construction of cash account is not given or not available, it can be ascertained from total creditors account.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

The amount listed for cash in the trial balance represents __________________.

  1. The cash at the beginning of the period.

  2. Cash receipts during the period.

  3. Cash receipts minus disbursements during the period.

  4. The balance of cash on the date of trial balance.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A Trial Balance is a statement that states the closing balances of all the accounts at the end of the accounting period. Thus, similar to all the other accounts, the closing balance of cash and bank only appears in the Trial Balance.

Thus, the correct option is D.