Tag: three column cash book

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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.

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

Which is entered on the debit side of Cash Book?

  1. Trade discount allowed

  2. Trade discount received

  3. Cash discount allowed

  4. Cash discount received.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The debit side of the cash book records all cash receipts. Cash discount allowed is an expense associated with receiving cash from debtors, so it is recorded on the same side as the receipt.

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

When a firm maintains a Three-Column Cash Book, it need not maintain _____________.

  1. cash account in the ledger

  2. bank account in the ledger

  3. discount account in the ledger

  4. both cash account and bank account in the ledger
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A three-column cash book contains both cash and bank columns, which serve the purpose of the cash and bank accounts in the ledger. Therefore, separate accounts for these are not required in the ledger.

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 only ______________________.

  1. Cash column and discount columns are balanced

  2. Bank column and discount columns are balanced

  3. Cash column and bank columns are balanced

  4. Cash Column, bank column and discount columns are balanced.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The cash and bank columns of triple column cash book are used as accounts and are periodically totaled and balanced just like in case of a double column cash book. The discount column is only totaled

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

Contra entries involve transfers between cash and bank. While they appear in three-column cash books, they are fundamentally a feature of any cash book that includes both cash and bank columns (a double column cash book).