Tag: bank book and petty cash book

Quizzes (0) Questions (105)

Questions Related to bank book and petty cash book

Multiple choice 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

State with reasons whether the following statement is true or false:
Petty cash is an expense.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Petty cash is an asset (cash on hand), not an expense. The individual payments recorded within the petty cash book are the expenses.

Multiple choice 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

Petty cash book can be treated as _____________.

  1. register

  2. memoranda book

  3. part of double entry system

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The petty cash book is a book of original entry that forms part of the double-entry system, as it records cash transactions that are eventually summarized and posted to the general ledger.

Multiple choice 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

What is an analytical petty cash book?

  1. Petty cash book formed in columnar form

  2. Petty cash book formed in tabular form

  3. Petty cash book formed In arithmetic form

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

An analytical petty cash book uses multiple columns (tabular/columnar form) to categorize different types of expenses, such as postage, stationery, and travel, for easier posting to the ledger.

Multiple choice 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

Which of the following statements is incorrect?

  1. In emergency the Petty Cashier may give staff loans of small amounts

  2. The Petty Cash Book could be either a subsidiary book or a main book of accounts.

  3. Every payment made by the Petty Cashier should be supported by evidence

  4. Regularly Petty Cashier is reimbursed to make up his cash balance to the imprest
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As noted previously, using petty cash for staff loans is a violation of financial controls and is not a legitimate use of the fund.

Multiple choice 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

If the debit and credit aspects of a transaction are recorded in the cash book it is a:

  1. Contra entry

  2. Simple entry

  3. Double entry

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

Option A is correct .

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.

Multiple choice 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

In petty cash book, the system followed ______________.

  1. Accrual system

  2. Impress system

  3. Cash system

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

The imprest system is followed in petty cash book where a fixed amount (imprest) is maintained. The cashier reimburses the amount spent to restore the balance to the fixed imprest level.

Multiple choice 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

Where two aspects of transaction are posted in the cash book, such an entry is called _______________.

  1. Double entry

  2. Debit entry

  3. Credit entry

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

A contra entry occurs when a transaction affects both the cash and bank accounts, requiring an entry on both sides of the cash book.

Multiple choice 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

The following is the summary of the petty cash transactions for a week:
Income - Opening Balance - Rs. 500; Sale of Stamps - Rs. 10; Sale of Paper - Rs. 50
Expenditure - Travelling expenses - Rs. 150; Subsistence expenses - Rs. 250
Petty cash is maintained using the imprest system.
What sum should be reclaimed by the cashier at the end of the week ?

  1. Rs.150

  2. Rs. 340

  3. Rs. 400

  4. Rs. 500
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the imprest system, the amount reclaimed is equal to the total expenditure incurred. Expenditure = 150 (travel) + 250 (subsistence) = 400. Note: Income (sales of stamps/paper) reduces the amount needed for reimbursement. Total reimbursement = 400 - 10 - 50 = 340.

Multiple choice 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

Impress amount -Rs. 500. what will be the amount of re-imbursement if following expenses were incurred by the petty cashier during the month-telephone = Rs. 150, Tiffin = Rs. 50, small Repairs. =Rs. 30 general expenses = Rs. 100. 

  1. 300

  2. 170

  3. 330

  4. 270
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The reimbursement amount is equal to the total expenses incurred during the period. Total = 150 + 50 + 30 + 100 = 330.