Tag: meaning and advantages of 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

A cheque received and deposited in the bank on the same day is recorded in the ______________.

  1. cash column of the cash book

  2. bank column of the cash book

  3. credited in the cash book

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

A cheque received and deposited in the bank on the same day directly increases the bank balance, so it is recorded in the bank column of the cash book on the debit side.

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

The advantages of imprest system of petty cash include:
1. The main (or head) cashier is relieved of maintaining record of petty payments
2. Small payments are not stuffed in the main cash book.
3. Complete and reliable check is maintained on small items of expenses
4. It is automatically balanced.

  1. $1, 2$ and $4$

  2. $1, 2$ and $3$

  3. $2, 3$ and $4$

  4. $2$ and $4$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The imprest system of petty cash relieves the head cashier from recording minor expenses, keeps the main cash book uncluttered, and provides a reliable control mechanism over small expenses. It is not 'automatically balanced' in a way that is considered a primary advantage of the system.

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

While posting the Cash Payment from Cash Book___________.

  1. only the individual accounts are posted

  2. the individual accounts are debited and also the total of the cash column is credited

  3. only the individual accounts are debited and there is no need to post the total of cash column

  4. the individual accounts are credited and the total of the cash column is debited
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When posting cash payments from the cash book, individual accounts of the recipients are debited. Since the cash book itself serves as the cash account, there is no need to post the total of the cash column to any ledger cash account.

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

State whether True or False:
All transactions related to bank are recorded in the bank  column of the cash book and these transactions are also recorded in the pass book by the bank.

  1. True

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

This statement is true. Bank transactions are recorded on the depositor's side in the bank column of the cash book, and on the bank's side in the customer's ledger account, which is reflected in the pass 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

Bank column of the Cash Book has __________ balance.

  1. Debit

  2. Credit

  3. Either (a) or (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The double column cash book (also known as two column cash book) has two money columns on both debit and credit sides – one to record cash transactions and one to record bank transactions.

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

_______ is book in which all transactions concerning cash receipts and cash payments are recorded.

  1. Journal proper

  2. Cash book

  3. Sales Book

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

The Cash Book is a subsidiary book specifically designed to record all cash receipts and cash payments chronologically.

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 are recorded in _______________.

  1. Journal proper

  2. Sales Book

  3. Cash Book

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

Cash sales involve the receipt of cash, so they are recorded in the Cash Book. The Sales Book is reserved only for credit sales of goods.

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 purchases are recorded in ______________.

  1. Purchases Book

  2. Cash Book

  3. Purchases Returns Book

  4. Partly in Cash Book and partly in Journal Proper
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Any purchase made for cash is recorded in the Cash Book because it involves an immediate cash outflow. The Purchases Book is only used for credit purchases of goods.

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

Which of the following books is used to record purchase of machinery by cash?

  1. Cash book

  2. Purchases book

  3. Journal proper

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

Any transaction involving cash payment, including the purchase of an asset like machinery for cash, 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 Book is in the form of _____________.

  1. Journal

  2. An account

  3. Statement

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

The Cash Book is prepared in the form of a ledger account, with debit (receipts) and credit (payments) sides, even though it also serves as a book of original entry.