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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Recording And Posting Of Cash Transactions Quiz 5 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Recording And Posting Of Cash Transactions
Quiz 5
Which of the following is the kind of a cash book?
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Single column cash book
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Double column cash book
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Three-column cash book
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All of the above
Explanation
There are three common versions of the
cash book
: single column, double column, and triple column.The single column
cash book
shows only receipts and payments of
cash
. The double column
cash book
shows
cash
receipts and payments as well as details about bank transactions.
If Sandeep sold goods for Cash, it will be recorded in _____________.
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Sales Book
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Cash Book
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None of these
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Both of these
Explanation
The Journal Entry for the above transaction will be
Cash a/c Dr.
To Sales a/c
(Being goods sold for cash)
As cash is involved in this transaction, therefore, it will be recorded in the cash book.
Which of the following is correct?
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Cash book is a journal and not a ledger
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Cash book is a ledger and not a journal
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Cash book is both a journal and a ledger
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Cash book is neither a journal nor a ledger
Explanation
The Separate ledger account is prepared for all cash receipts and cash payments. This Ledger is known as Cash Account.
While the cash book which is called as journal book records all the cash receipts and cash payments therefore, it is same as ledger.
Therefore, a
cash book serves both journal and ledger purposes.
Which of the following statements is not correct in relation to cash discount?
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Cash discount is an allowance made by the person to receive cash from the payer for prompt payment
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Cash discount is an allowance in addition to the trade discount
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Cash discount is recorded in account books
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Cash discount is always allowed at a rate higher than the rate of trade discount
Explanation
Discount allowed can be classified as :-
1.Trade Discount
2.Cash Discount
Trade discount is generally allowed to promote the sale. It is allowed on the list price and only the net value is recorded in the books of account. Its generally allowed on a higher rate than the cash discount.
Cash discount is allowed to the customer to whom the goods were sold on credit. Cash discount is allowed to speed up the collection. If the customer pays the amount well before the normal credit period, a discount is allowed on a certain percentage. Cash discount is a having directly correlation with the cost of capital. If customer gets benefited than only he will go for the option of making the payment.
Cash discount is allowed with a very minimum percentage and is always lower than the trade discount.
Single Column Cash Book may show ______________.
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only a debit balance
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only a credit balance
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either debit balance or a credit balance
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neither debit nor credit balance.
Explanation
Its shows only debit balance as a business can spend more than it it have. Therefore, there cannot be a negetive cash.
If the debit as well as the credit aspects of a transaction are recorded in the cash book itself, it is called ______________.
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An opening entry
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A compound entry
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A transfer entry
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A contra entry.
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.
Balance in a petty cash book is _______.
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an expense
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a profit
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an asset
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None of these
Explanation
Closing balance of a petty cash book is the cash left with the petty cashier at the end of a month. Cash is an asset for an organisation. Hence, balance of cash in the petty cash book is an asset.
Therefore, C is the correct answer.
When a firm maintains a simple Cash Book, it need not maintain ____________.
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sales journal
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purchases journal
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general journal
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cash account in the ledger
Explanation
When a firm maintains a simple Cash Book, it need not maintain
cash account in the ledger.
When a cheque received is endorsed, it must be entered on _____________.
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Credit side of the cash book only
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Debit side of the cash book only
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Both sides of the cash book
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No where
Explanation
A bearer cheque received from a party and not deposited in the bank, can be given to any third party for making the similar payment to the latter. This is known as endorsement. On endorsement of cheque to the third party the cash column must be reduced so that it gets recorded in the cash column on the credit side of the cash book. It should be noted that when the cheque was received, it must have been recorded in the cash column on the debit (receipt) side of the cash book.
Fixed assets are __________________.
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Kept in the business for use over a long time of earning income
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Meant for resale
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Meant for conversion into cash as quickly as possible
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All of the above
Explanation
A
fixed asset
is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.
Fixed assets
are not expected to be consumed or converted into cash within a year.
Fixed assets
most commonly appear on the balance sheet as property, plant, and equipment (PP&E).
Bank column of the Cash Book has __________ balance.
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Debit
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Credit
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Either (a) or (b)
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Neither (a) nor (b)
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.
Cash account will show ______________.
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Debit or Credit balance
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A Credit balance
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A Debit balance
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None of the above
Explanation
Cash account will show a debit balance.
Cash Book is a subsidiary book which records all the cash receipts and cash payments. The Balance of Cash book can never be credit as it always has debit balance or zero balance.
While posting the Cash Payment from Cash Book___________.
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Only the individual accounts are posted
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The individual accounts are debited and also the total of the cash column is credited
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Only the individual accounts are debited and there is no need to post the total of cash column
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The individual accounts are credited and the total of the cash column is debited
Explanation
While posting the Cash Payment from Cash Book
only the individual accounts are debited and there is no need to post the total of cash column.
Cash Book is a subsidiary book that records all the cash receipts and cash payments. The Balance of the Cashbook can never be credit as it always has a debit balance or zero balance.
There are mainly Four types of Cash Books
1. Simple Cashbook
2. Two-column Cash Book
3.
Three Column Cash Books.
4. Petty Cash Book
The petty cashier generally works on _______ system.
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Balancing
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Accrual
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Matching
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Imprest
Explanation
An imprest system of petty cash means that
the general ledger account Petty Cash will remain dormant at a constant amount
.
The petty cashier generally works on the imprest system. Hence, the correct answer is option D.
A contra entry in the Cash Book means that:________.
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Debit must be in the Bank Account and the credit in the Cash Account
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Debit and credit entries are in any folio but in the Cash Book
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Debit and credit entries are on the same folio of the Cash Book
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Debit must be in the Cash Account and the credit in the Bank Account
Explanation
Contra entry can be:
1.Bank A/c Dr...
To Cash A/c
or
2.Cash A/c Dr...
To Bank A/c
Credit and Debit entries are both taken into consideration into the cash book and not necessarily only bank or only cash entries are reflected.
Rent due for the month of March will appear _______________.
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On the payment side of the cash book
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On the receipt side of the cash book
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Nowhere in the cash book
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As a contra entry
Petty Cash Book may be treated as a __________________.
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Part of the double entry system
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Merely as a memoranda book
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Either (A) or (B)
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None of the above
Explanation
Petty Cash Book may be treated as a
Merely as a memoranda book
Which of the following is/are advantages of the imprest system?
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It saves the time of chief cashier
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It reduces the chances of misuse of cash by the petty cashier.
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It enables a great saving to be effected in the posting of small items to the ledger accounts.
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All of the above
Payments in cash of small amounts like travelling expenses, postage, carriage etc. are recorded in the ________________.
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Main Cash book
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Petty cash book.
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Cash budget
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Journal proper
Explanation
Payments in cash of small amounts like travelling expenses, postage, carriage etc. are recorded in the Petty Cash Book.
The Cashier who maintains the Petty cash Book is known as Petty Cashier.
There are two types of Petty Cash Book
1. Simple Petty Cash Book
2. Analytical Petty Cash Book
The total of the amount of the bills receivable book is posted to the ______ in the ledger.
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Dr. of bills payable account
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Cr. of bills payable account
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Dr. of bills receivable account
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None of these.
Explanation
The total of the amount of the bills receivable book is posted to the debit side in the ledger because Bills receivable account will usually have a debit balance. As a bill receivable is supposed to be received at maturity, it acts as a current asset for the business.
Therefore, C is the correct option.
Cash Book is in the form of _____________.
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Journal
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An account
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Statement
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All of the above
Explanation
Cash book is same as a ledger account.
Cash Book is a subsidiary book that records all the cash receipts and cash payments. The Balance of the Cashbook can never be credit as it always has a debit balance or zero balance.
There are mainly Four types of Cash Books
1. Simple Cashbook
2. Two-column Cash Book
3.
Three Column Cash Books.
4. Petty Cash Book
State with reasons whether the following statement is true or false:
Petty cash is an expense.
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True
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False
Explanation
Petty cash is total amount of petty
cash
balance
Maintaining petty cash book is ______.
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Mandatory
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Necessary
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Dependant on nature of business
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All of the above
Explanation
Petty cash book - This is used to record petty expenses like postage. cartage. printing and stationery etc in the day to day business activities.
In big organisation, it is not possible to maintain petty expenses for main cashier. In small organisation the number of petty Expenses is less so such a book can be maintained by cashier. Maintaining such a book is not compulsory.
So, maintaining petty cash book is dependent on nature of business.
Which book of prime entry is also a ledger account?
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Cash Book
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Journal
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Purchases journal
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Sales Journal
Explanation
Cash book is a unique kind of subsidiary book. It plays a dual role. It acts as the book of original entry or prime entry and also as ledger. It is a subsidiary book because entries are first posted in the cash book and then, from there, it is posted in other ledger accounts.
State with reasons whether the following statement is true or false:
The balance in the Cash Book shows net income.
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True
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False
Explanation
The balance of cash book shows the net cash balance.
Cash Book is a subsidiary book that records all the cash receipts and cash payments. The Balance of the Cashbook can never be credit as it always has a debit balance or zero balance.
There are mainly Four types of Cash Books
1. Simple Cashbook
2. Two-column Cash Book
3.
Three Column Cash Books.
4. Petty Cash Book
In which book does the cash sales will be recorded?
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Cash Book
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Purchase Book
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General Journal
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Sales Book
Explanation
Cash book is a journal in which all cash receipts and payments (including bank deposits and withdrawals) are recorded first, in chronological order, for posting to general ledger. Cash book is regularly reconciled with the bank statements as an internal auditing measure. It is used to record all the receipts and payments of cash.
Cash column of a Cash-book may show a Debit or Credit Balance.
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True
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False
Explanation
Cash always have debit balance.
Cash Book is a subsidiary book that records all the cash receipts and cash payments. The Balance of the Cashbook can never be credit as it always has a debit balance or zero balance.
There are mainly Four types of Cash Books
1. Simple Cashbook
2. Two-column Cash Book
3.
Three Column Cash Books.
4. Petty Cash Book
State with reasons whether the following statement is true or false:
Discount account should be balanced in the Cash Book.
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True
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False
Explanation
Discount account is never balanced in cash book.
Cash Book is a subsidiary book that records all the cash receipts and cash payments. The Balance of the Cashbook can never be credit as it always has a debit balance or zero balance.
There are mainly Four types of Cash Books
1. Simple Cashbook
2. Two-column Cash Book
3.
Three Column Cash Books.
4. Petty Cash Book
Which of the following by is incorrect?
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Every payment made by the petty cashier should be supported by evidence.
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Regularly petty cashier is reimbursed to make up his cash balance to the imprest.
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The petty cash book could be either a subsidiary book or a main book of accounts.
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In emergency the petty cashier may give staff loans of small amounts.
Explanation
The amount of petty cash very small therefore, it can not be used for giving loans.
State with reasons whether the following statement is true or
false:
The balance in the petty cash book represents the amount spent.
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True
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False
Explanation
The balance in the petty cash book represents the cash balance
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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