Tag: explain the purpose of maintaining a cash book

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Multiple choice 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

Purchase of furniture on cash for  Rs $1,50,000$ will be recorded in _____________.

  1. Sales Book

  2. Purchase Book

  3. General journal

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

Any transaction involving the payment or receipt of cash must be recorded in the cash book. Even though furniture is an asset, because it was purchased for cash, it is entered in the cash book rather than the purchase book (which is only for credit purchases of goods) or the general journal.

Multiple choice 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

An allowance of Rs $50$ was offered for an early payment of cash of Rs $1,050$. It will be recorded in ____________.

  1. Sales Book

  2. Purchase Book

  3. Journal Proper(General Journal)

  4. Cash Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Cash discounts (allowances for early payment) and the associated cash receipts or payments are recorded directly in the cash book, specifically in the discount column of a multi-column cash book. Therefore, this transaction is recorded in the cash book.

Multiple choice 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

Received cash of Rs $2,00,000$ from debtors for settlement of credit sales will be recorded in ______________.

  1. Sales Book

  2. Purchase Book

  3. Journal Proper (General Journal )

  4. Cash Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Any transaction that results in an actual receipt of cash is recorded in the cash book. Since cash is received from debtors, this transaction is entered on the receipt (debit) side of the cash book.

Multiple choice 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

_______are passed for rectifying errors which might have committed in the books of account.

  1. Transfer Entries

  2. Adjustment Entries

  3. Rectification Entries

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

Rectification entries are specific journal entries passed to correct errors made during the recording, classifying, or posting of transactions in the books of accounts. Adjustment entries are used for accruals and prepayments, while transfer entries move balances between accounts.

Multiple choice 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

Rs $3,50,000$ cash paid to creditors for settlements of credit purchases will be recorded in _______________.

  1. Sales Book

  2. Purchase Book

  3. Journal Proper (General Journal)

  4. Cash Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Any transaction involving a cash payment is recorded on the payment (credit) side of the cash book. Since this transaction involves paying cash to creditors, it must be recorded in the cash book.

Multiple choice 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

Sold furniture on cash for Rs $1,50,000$ will be recorded in ______________.

  1. Sales Book

  2. Purchase Book

  3. Journal Proper (General Journal)

  4. Cash Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The sale of an asset like furniture for cash results in a cash receipt, which must be recorded in the cash book. The sales book is only used for recording credit sales of goods (trading inventory), not cash sales of fixed assets.

Multiple choice 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

Salary paid in cash - Rs $50,000$ will be recorded in ____________.

  1. General Journal

  2. Cash Book

  3. Purchases Return Book

  4. Purchase Book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Paying salary in cash is a cash outflow transaction. All cash payments are recorded on the credit side of the cash book, making the cash book the correct book of original entry for this transaction.

Multiple choice 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

Purchase of Machinery by Mr. X, a dealer in machinery for 100000 is recorded in _______________.

  1. Cash Book.

  2. Sales Book.

  3. Purchases Book.

  4. Journal Proper.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Since Mr. X is a dealer in machinery, machinery is considered inventory (goods) for his business. Furthermore, because no supplier's name is mentioned in the transaction, it is treated as a cash purchase rather than a credit purchase, meaning it must be recorded in the cash book.

Multiple choice 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

Cash sales for Rs $5,00,000$ will be recorded in __________.

  1. Ledger

  2. Cash Book

  3. General Book

  4. Sales Book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cash sales involve the immediate receipt of cash, so they are recorded directly in the cash book. The sales book is reserved exclusively for credit sales of goods, and the ledger is a book of final entry rather than original entry.

Multiple choice 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

Investment was sold in cash for Rs $1,00,000$ at par will be recorded in ____________.

  1. Cash book

  2. General Journal

  3. Purchases return book

  4. Purchase book
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When an investment is sold for cash, it results in a cash receipt. All cash receipts and payments are recorded in the Cash Book, making it the correct book of entry.