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CBSE Questions for Class 11 Commerce Accountancy Recording Of Transactions - Ii Quiz 3 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Recording Of Transactions - Ii
Quiz 3
Cash book does not record the _________ transactions.
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0%
Cash
0%
Purchase
0%
Credit
0%
All of the above
Explanation
All
transactions
in the
cash book
have two sides: debit and
credit
. All
cash
receipts
are recorded
on the left-hand side as a debit, and all
cash payments are recorded
by date on the right-hand side as a
credit
.
In purchase book, goods purchased on ______ are recorded.
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0%
Cash
0%
Credit
0%
Goods
0%
All of the above
Explanation
Purchase book records credit purchases of goods only. Whenever goods are purchased, Purchases account is debited. In all cases of purchases, goods come into the business (as per the rule i.e. "Debit what comes in"), so purchases account has to be debited. The document on the basis of which purchase book is prepared is known as "Credit memo".
Cash sales are entered in sales journal.
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0%
True
0%
False
Explanation
The journal entry of cash sales is:
Cash A/c Dr.
To Sales A/c
The cash receipt journal is used to record sales of merchandise for cash.
The credit sales is recorded in sales journal. All transactions in the cash receipts journal involve the receipt of cash and hence, it is recorded by debiting cash.
Purchase account comprises of transactions of ___________.
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0%
Purchase of furniture
0%
Cash and credit purchase
0%
Purchase return
0%
Purchase or stationery
Explanation
When goods are purchased either for cash or on credit, purchase account is debited. Purchase account belongs to nominal account and according to the rule of nominal account, expenses of the business is debited.
All credit purchase of goods are recorded in the purchase journal while cash purchase are recorded in cash book. Other purchases such as purchases of office equipment, furniture, building etc. are recorded in the journal proper if purchased on credit or in the cash book if purchased for cash.
In double column cash book, one is for cash and other is the ___________ column.
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0%
Credit
0%
Bank
0%
Discount
0%
All of the above
Explanation
Cash book with cash and bank column has one additional column on the receipt and payment side along with cash column which is the bank column. Only bank transaction are recorded in this column.
Cash book is a _______( journal).
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0%
Subsidiary
0%
Purchase
0%
Sales
0%
Purchase and Sales Return
Explanation
A
cash book is a subsidiary
to the general ledger in which all
cash
transactions during a period are recorded.
Cash book records transactions relating to receipts and payments.
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0%
True
0%
False
Explanation
Cash book
is a
book
in which all
transactions relating
to
cash receipts
and
cash payments
are recorded. It starts with the
cash
or bank balances at the beginning of the period. Generally, it is made on monthly basis.
Amount of discount deducted from invoice price is called a __________.
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0%
cash discount
0%
trade discount
0%
quality discount
0%
all of the above
Explanation
Discount is the deduction in the price of the goods sold. It is offered in two ways. Offering deduction of agreed percentage of list price at the time of selling goods is one way of giving discount. Such discount is called as "Trade Discount".
Imprest system of Petty Cash book is system in which head cashier first estimates the total petty expenses of a particular period say month or fortnight and estimated amount is given to petty cashier in advance to meet petty expenses of particular period.
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0%
True
0%
False
Explanation
Under imprest system, a round sum of money estimated are necessary for the possible needs of the business to meet petty expenses for the week or fortnight is handed over to the Petty Cashier. At the end of the fixed period or earlier, when petty cashier needs further cash, he submits the petty cash book, along with vouchers.
The Chief Cashier examines the cash book with the vouchers. Then, Chief Cashier gives money/cheques for the exact amount, which he actually spent during the period. Thus, he starts for the next period with the same sum as held previously. That is, the petty cashier will have again the fixed sum in the beginning of the next period. This system is known as Imprest System of Petty Cash Book.
Transaction recorded both on debit and credit side of cash book is known as contra entry.
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0%
True
0%
False
Explanation
In cash book, cash transactions (transactions affecting cash in hand) are recorded in the cash column and bank transactions (transactions affecting cash at bank) are recorded in the bank column. On the debit side , receipts of cash and checks are recorded, that is, items that increase the cash balance or the bank balance. On the credit side, payments of cash and checks are recorded, that is, items that decrease the cash balance or the bank balance .
A contra entry in the cash book is one which does not require further entries in other ledger accounts. This is because for the given transaction, both entries are made in the cash book itself, the transaction affecting both the cash account and the bank account. Transaction recorded on both debit and credit side of cash book is known as contra entry.
Credit purchase of machine is entered in purchase journal.
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0%
True
0%
False
Explanation
Accounting
and
journal entry for credit purchase
includes two accounts, Creditor and
Purchase
.
In case of a
journal entry
for cash
purchase
, Cash account and
Purchase
account are used.
The person to whom the money is owed is called a “Creditor” and the amount owed is a current liability for the company.
Cash received in entered on the debit side of cash book.
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0%
True
0%
False
Explanation
The recording of transactions in the
cash book
takes the shape of a ledger account. R
eceipts
of
cash
are
entered on the debit side
and
cash
payments on the credit
side
, there is no need of
cash
account in the ledger
books
of a firm.
Person who maintains petty cash book __________.
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0%
Cashier
0%
Petty maintainer
0%
Petty cashier
0%
None of the above
Explanation
The petty cash book is a formal summarization of petty cash expenditures, sorted by date. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Thus, the book is part of a manual record-keeping system.
A petty cashier is a person who is appointed or who is authorized to make payments of petty cash expenses and record them in the petty cash book. Petty cash expenses include small payments, such as postage, conveyance, etc. that are very small in amount but occur very frequently in business.
Cash column of cash book can never have _______ balance.
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0%
Credit
0%
Debit
0%
Zero
0%
None of the above
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.
On the left side, all-cash transactions relating to cash receipts (debits), and on the right side all transactions relating to cash payments (credits) are entered date wise. When a cash book is maintained, a separate cash book in the ledger is not opened.
The cash book is balanced in the same way as an account in the ledger. But it may be noted that in the case of the cash book, there will be always a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.
Subsidiary book in which only credit purchase of goods is recorded ___________.
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0%
Sales return book
0%
Purchase book
0%
Purchase return book
0%
Sales book
Explanation
All goods purchased on credit is are recorded in the Purchase book. Whenever goods are purchased on credit purchase account is debited (as per the rule, "Debit what comes in") i.e. goods comes in, hence purchase account is debited.
The document on the basis of which purchase book is prepared is known as "Credit memo".
Goods purchased on credit for manufacturing or for resale are only recorded in the sales Book.
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0%
True
0%
False
Explanation
Purchase book records credit purchase of goods only. Whenever goods are purchased, purchase account is debited. In all cases of purchase, goods come in to business, so purchase account has to be debited.
Subsidiary book in which only credit sale of goods is recorded ____________.
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0%
sales book
0%
purchase book
0%
sales return book
0%
purchase return book
Explanation
Sales book records only credit sale of goods. It does not record cash sales of goods or credit sale of assets. Sales account is always credited for sale, so the sales book always show credit balance. The sales journal is also totalled periodically and this total is credited to sales account in the ledger.
Goods sold on credit are only recorded in the sales book.
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0%
True
0%
False
Explanation
Sale book record only credit sale of goods. It does not record cash sales of goods or credit sales of assets. Sale account is always credited for sale, so the sales book always show a credit balance.
Credit purchase of machinery is recorded in the ___________.
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0%
Purchase book
0%
Cash book
0%
Journal proper
0%
Return outward book
Explanation
A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal Residual.
Following transactions are recorded in this journal:
1. Opening entry: In order to open a new set of books in the beginning of new accounting year and record therein opening balances of assets, liabilities and capital, the opening entry is made in the journal.
2. Adjustment Entries: In order to update ledger account on accrual basis, such entries are made at the end of the accounting period, such as Rent outstanding, Prepaid insurance, Depreciation and Commission received in advance.
3. Other entries: The following transactions is done in the journal proper:
(i) At the time of dishonor of a cheque the entry for cancellation for discount received or discount allowed
(ii) Purchase/sale of items on credit other than goods
(iii) Goods withdrawn by the owner for personal use
(iv) Goods distributed as samples for sales promotion
(v) Endorsement and dishonour of bills of exchange
(vi) Loss of goods by fire/theft/spoilage
Note issued by seller on receipt of defective goods from customer __________.
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0%
Credit note
0%
Cash memo
0%
Debit note
0%
Sales note
Explanation
A credit note is prepared on receipt of defective goods from customer by the seller. A credit note is a letter sent by the supplier to the customer notifying the customer that he or she has been credited a certain amount due to an error in the original invoice or other reasons. It is also called as "credit memo".
Entry which is to be recorded on the receipt side as well as payment side of cash book _____________.
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0%
Adjustment entry
0%
No entry
0%
Contra entry
0%
Transfer entry
Explanation
When there is a transaction that relates to both cash and bank, this will be written on one side of bank column and on other side of cash column. Such transactions are known as "Contra entries". In case cash is withdrawn from bank for office use, its is entered on the credit side of bank column and also in the debit side of cash column of the cash book. In case cash is deposited in the bank, the amount is recorded on the debit side of bank column and on the credit side of cash column of the cash book. The letter "C" is written in the LF column on both sides against these entries. These entries are not to be posted into ledger.
An entry recorded on both sides of cash Book is known as _______ entry.
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0%
Opening
0%
Rectifying
0%
Transfer
0%
Contra
Explanation
An
entry
which is made on
both sides
of
a cash book is called
Contra entry
.
In the dual
entry
accounting system,
a Contra
Entry
is an
entry
which is
recorded
to reverse or offset an
entry
on the other
side
of an account.
.
Simple petty cash book is not very popular.
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0%
True
0%
False
Explanation
A simple petty cash book is one in which there is only one amount column on its both sides with common date and particular columns. The debit column is used for entering the balance of cash in hand of the petty cashier at the beginning of the period and the amount received from the head cashier. A simple petty cash book is identical to a cash book. Any cash that a petty cashier receives is recorded on the debit or receipts side and any cash that he pays is recorded on the credit or payments side. In this type of Cash book, all the expenses are recorded in one single column. Due to this, postings of all expenses to respective ledger accounts consume a lot of time. Hence, the Simple Petty Cash Book is not popular because separate columns for various expenses are not maintained.
When goods are returned by buyer to seller, supplier sends a credit note.
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0%
True
0%
False
Explanation
A credit note is a letter sent by the supplier to the customer notifying the customer that he or she has been credited a certain amount due to an error in the original invoice. Or in other words, a receipt given by a shop to a customer who has returned goods, which can be offset against future purchases.
Direct deposit made by customer into your bank is recorded on the ______ side of the cash book.
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0%
Payment
0%
Credit
0%
Receipt
0%
Both
Explanation
Cash book is a book in which all transaction relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. This is a very popular book and is maintained in all organisations, big or small, profit or not-for-profit. It serves the purpose of both journal as well as the ledger account. It is also called as the book of original entry. The left side of the cash book shows the receipts of the cash whereas the right side of the cash book shows all the payments made in cash. The accounts appearing on the debit side for the cash book are credited in the respective ledger accounts because cash has been received in respect of them. Direct deposit made by customer into your bank is recorded on the receipts side of the cash book.
Purchase of asset or stationery on credit is recorded in purchase book.
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0%
True
0%
False
Explanation
Purchase book records only the credit purchases of goods. Goods are things that are purchased or produced for resale in which a business deals. Purchase of assets or stationery is not meant for resale and will be held for long term and increase the profit-earning capacity of the business over various accounting periods. Hence, transactions related to purchase of assets or stationery cannot be recorded in the Purchase book. It will be recorded in the journal proper.
A cash book is both a journal as well as ledger.
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0%
True
0%
False
Explanation
A cash book o both a journal as well as a ledger. The cash book is a journal because it records the cash transactions from the source document for the first time and then these are posted in the respective ledger accounts. The cash book is a ledger in the sense that it serves the purpose of a cash account also. Wen the cash book is prepared, the Cash A/c is not required to be prepared. Thus, the cash book serves the purpose of a subsidiary book as well as the principal book.
Total of payments side can be greater than total of receipts side in case of bank column.
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0%
True
0%
False
Explanation
usually, the debit side bank column is always bigger than the credit side bank column. The difference will mean so much balance at the bank. But sometimes a bank allows a person an Overdraft (OD) i.e., he can draw more than he has deposited. In such a case, the credit side bank column will total more than the debit side bank column. When the total of the payments side exceeds the total of the receipts side, it will result in overdraft balance. Sometimes, a bank provides overdraft facility to its businessmen. This means that the withdrawal amount can exceed the deposit amount. But it is not possible in the case of cash column of the Cash Book, as a businessman cannot make payments that are greater than his/her receipts.
It is not necessary to record dishonour of cheques in the cash book.
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0%
True
0%
False
Explanation
Cheque that is returned unpaid by the bank on which it was drawn due to lack of sufficient funds is called 'dishonoured cheque". To knowingly issue a cheque that will be dishonoured is a criminal offence in many jurisdictions.
The statement is false because it is necessary to record the dishonour of cheques in the cash book. The dishonour of cheques is recorded on the payment side or credit side of the bank column of cash book. When a cheque is dishonoured, the Bank A/c is credited and, thus, it is credited in the bank column of the cash book.
Cash book is a book of original entry.
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0%
True
0%
False
Explanation
Cash book is a primary book of original entry and includes all cash transactions of the enterprise in a chronological order.
A cash book is a book of original entry because it is the subsidiary book that records all the cash transactions of the business from the source document.
Hence, cash transactions of a business are first recorded in the cash book, and thus, it is termed as a book of original entry.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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