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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Recording And Posting Of Cash Transactions Quiz 8 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Recording And Posting Of Cash Transactions
Quiz 8
Jornal entry for recording wages expense in petty cash book is __________.
Wages A/c Dr.
To Petty Cash A/c.
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True
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False
Explanation
To create journal entries that show petty fund purchases, one must debit the corresponding accounts (e.g., Office Supplies account if you purchase supplies) and credit your Petty Cash account.
Therefore, A is the correct option.
Journal entry on submission of accounts by the petty cashier is :-
Petty Cash A/c Dr.
To Expenses A/c
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True
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False
Explanation
.
The balance in petty cah book represents ____________ .
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expenses
0%
net income
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cash-in-hand with petty cashier
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none of the above
Explanation
The balance in petty cash book represents
cash-in-hand with petty cashier.
A____ serves the purpose of both journal and ledger accounts.
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Journal proper
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Purchase day book
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Cash book
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Any of the above
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 a journal book records all the cash receipts and cash payments, therefore, it is the same as the ledger.
Therefore, a
cash book serves both journal and ledger purposes.
Cashbook
Drawing is a type of _______________.
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Expense
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Withdrawal of capital
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Income
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None of the above
Explanation
.
Excess of bank withdrawal over bank deposits __________.
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Overdraft
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Cash balance
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Bank balance
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Loan
Explanation
The opening cash and bank balances are recorded on the debit side of the cash book. Sometimes a businessman withdraws excess amount from the bank (from his bank account) and the closing bank balance of a month is a credit balance. This balance amount is called 'Bank Overdraft'. It is written on the credit side of the bank column of the cash book as opening balance.
A petty cash book which had many sub-columns on payment side for recording expenses which are repetitive in nature, e.g. postage and telegrams, printing & stationery, carriage & cartage, sundry expenses, etc. is called analytical/columnar petty cash book.
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True
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False
Explanation
In columnar /analytical cash book, various items of petty cash payments are analysed and separate analytical columns are provided for recording each and every item. The amount of cash received from the chief cashier for meeting out the petty expenses is recorded on the debit side and actual cash payments towards various petty items are recorded on the credit side in the total as well as analytical columns. The analytical column is provided for each usual head of expense like postage & telegrams, printing & stationary, carriage & cartage, traveling expenses, entertainment expenses, office expenses, sundry expenses, etc. Subsequently, the totals of these analytical columns are posted to the respective ledger accounts which save the labor used in posting each item of payment separately in the ledger. The balancing of petty cash book is done in the total payments column. Where the debit side (receipts) exceeds that of the credit side ( in the totals column -Payments), it represents the unspent balance of cash remaining with the petty cashier.
Purchase of machinery for business on cash is recorded in ____________.
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Purchase Journal
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General journal
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Cash book
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Balance Sheet
Explanation
Cash book is a book in which all cash receipts and cash payments are recorded. It is also one of the books of original entry. It starts with the cash or bank balance at the beginning of the period. In case of new business, there is no cash balance to start with. It is prepared by all organisations. When a cash book is maintained, cash transactions are not recorded in the journal, and no cash or bank account is required to be maintained in the ledger as cash book serves the purpose of cash account.
Hence, purchase of machinery for business on cash is recorded in cash book.
Double column cash book records transaction relating to __________ and ___________.
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Purchase, Sales
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Cash, Credit
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Cash, Bank
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Purchase, Return
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. The cash column is used to record all cash transactions and works as a cash account whereas bank column is used to record all receipts and payments made by checks and works as a bank account. Both the columns are totaled and balanced like a traditional T-account at the end of an appropriate period which is usually one month.
Day-to-day cash transactions of club are recorded in __________.
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Receipts and Payments account
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Income and Expenditure account
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Cash book
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None of these
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with 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 by all organisations, big or small, profit or not-for-profit. It serves the purpose of both journal as well as the ledger account. Day-to-day cash transactions of a club are recorded in the cash book.
In double column cash book, when does contra entry arises?
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Withdrawal of cash from bank
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Payment to Creditors.
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Withdrawl of cash from bank for personal use
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All of the above
Explanation
If an amount is entered on the debit side of the
cash book
, and the exact amount is again entered on the credit side of the same account, it is called “
contra entry
”. Similarly an amount entered on the credit side of an account also may have a
contra entry
on the debit side of the same account.
Which of the following Cash Book is treated as a 'Cash Account' ?
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Single-column Cash Book
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Two-column Cash Book
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Three-column Cash Book
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Petty-Cash Book
Explanation
The single column cash book (also known as simple cash book) is a cash book that is used to record only cash transactions of a business. It is very identical to a traditional cash account in which all cash receipts are recorded on left hand (debit) side and all cash payments are recorded on right hand (credit) side in a chronological order.
The single column cash book has only one money column on both debit and credit sides titled as "amount" which is periodically totaled and balanced like a T-account. As stated earlier, a single column cash book records only cash related transactions. The entries relating to checks issued, checks received, purchase discount, and sales discount are not recorded in single column cash book.
Book in which small payments are recorded is ____________.
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Petty Cash Book
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Double column cash book
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Journal proper
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None of the above
Explanation
The petty cash book is defined as a relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business concern. A cash book that is created for the small payments of an organization i.e. taxi fare, car fare, bus fare, postage and stamps etc. has a separate fund to meet the day to day petty expenses in the office is called as petty cash book. It is established in the responsibility of petty cashier who maintains a separate cash book to record, such small payments only. It's a cash book to enter daily expenses like the cost of stationery, postage and so on. The petty cash book will be maintained by a separate cashier known as a petty cashier in the accounting field.
Cash cannot be misappropriated by ____________.
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Omitting to enter any cash which has been received
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Entering less amount than what has been actually received
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Making fictitious entries on the receipts side of cash book
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Making fictitious entries on the payments side of the cash book
Explanation
Fictitious entries done in the receipt side of cash book will increase the cash balance of the organization, hence it is not possible to misappropriate the cash by doing the fictitious entries on the receipt side of cash book.
____________recorded in cash book.
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Rs. 5000 received from Rahul
0%
Rs. 6500 paid to Gopal
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Loan of Rs. 51000 taken from Bank
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All of three
Explanation
Option A: 5000 received from Rahul
Due to this transaction, there is an increase in cash, therefore it will be recorded in the Cash Book.
Option B: 6500 paid to Gopal
There is a decrease in cash by 6500 therefore it will be recorded in the Cash Book.
Option C: Loan taken from bank Rs. 51000
Therefore, there is an increase in cash due to this transaction
All the transaction involve inflow or outflow of cash therefore, all will be recorded in the cash book.
_________ is the book which is used for the purpose of recording the payment of petty cash expenses.
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Cash book
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Bank
book
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Petty cash Book
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Miscellaneous Expenses Book
Explanation
In every organisation, a large number of small payments such as conveyance, cartage, postage, telegrams and other expenses are made. These are generally repetitive in nature.
If all these payments are handled by the cashier and are recorded in the main cash book, the procedure is found to be very cumbersome. The cashier may be overburdened and the cash book may be become very bulky.
To avoid this, large organisations normally appoint one more cashier and maintain a separate cash book to record these transactions. Such a cash book maintained by petty cashier is called petty cash book. It is used for the purpose of recording the payment of petty cash expenses.
Select the most appropriate alternative from those given below and rewrite the sentence.
Transactions related to Cash and Bank A/c are entered in _________ voucher.
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Purchases
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Sales
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Contra
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Payment
Explanation
A typical cash book is having two column i.e. cash and bank column. Its called two column cash book. Transactions related to cash and bank are recorded through these columns.
In case of cash withdrawal and cash deposit, the entry is passed through both the columns.
For example, cash withdrawal from bank Rs.5000/- . In such case, cash of Rs.5000 is recorded in the receipt side of cash book and same amount is recorded in bank column of payment side. Its called "contra" transaction.
To denote specifically "C" is put against each of the contra transaction.
Cash purchase of trading goods is initially recorded in _______.
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purchase day book
0%
cash book
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directly in Purchase A/c
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any of the above three
Explanation
All cash transactions are recorded in cash book which is a subsidiary book. Goods purchased on cash basis must be recorded in cash book.
Entry for trade discount always appears in the books of account.
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True
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False
Explanation
The discount allowed by a seller to its customers at a fixed percentage on the listed price of goods is termed as Trade discount.
No separate entry is passed for the Trade discount, as it is deducted from the cash memo or invoice of the goods.
If the goods sold at trade discount are returned by the customer, the amount of trade discount is again deducted from the list price of the returned goods. Generally, it is allowed to the retailers to enable them to sell the goods to their customers at list price.
The purpose is also to increase the sales.
It is not recorded in the books of accounts.
Which of these items are taken into consideration for preparing adjusted cash book?
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Cheque issued by not paid
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Cheque deposited but not cleared
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Wrong totalling of pass book
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Mistake in Cash book
Explanation
When there is a difference between bank column of cash book and pass book, there is confusion that which balance should be taken to "Balance Sheet" as "Bank Balance" while preparing financial statements.
Since there is a difference between bank column of cash book and pass book, taking either of the two balances will not relevant a true picture of the "Bank Balance".
Therefore, at the end of the financial year, cash book must be adjusted for all the errors/omissions etc. It is called as "Adjusted Cash Book". All errors made in the cash book are to be taken into consideration for preparing adjusted cash book.
Endorsed cheques are always recorded on the payment side in the bank column.
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True
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False
Explanation
Endorsement of a cheque means writing something on the back of the cheque with the intention of transferring the rights therein.
Endorsed cheques are always recorded on the payments side in the cash column (and not in the bank column) of the cash book. The endorsed cheques so received are treated as Cash-in-Hand and when these cheques are endorsed, then Cash A/c is credited. Thus, the above statement is false.
While adjusting the cash balance which one of the following is not taken into account?
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Payment directly received by bank as per instructions
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Payment directly made by the bank as per standing instructions
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Mistake in cash book
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Mistake in pass book
Explanation
When there is a difference between bank column of cash book and pass book, there may be confusion that which balance should be taken to "Balance Sheet" as "Bank Balance" while preparing financial statements.
Since there is a difference between bank column of cash book and pass book taking either of the two balances will not reflect a true picture of the "Bank Balance".
Therefore, at the end of the financial year, cash book must be adjusted for all the omissions/errors etc. It is known as "Adjusted Cash Book". Such adjusted cash book will be taken to balance sheet as "Bank Balance". No errors of the pass book will be taken into account while adjusting the cash balance.
Cheque received and deposited into bank on the same day is a contra entry.
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True
0%
False
Explanation
Often, cash is withdrawn from bank for use in office. In such a case the amount is entered in the bank column on the payments side and also in the cash column on the receipts side. In the reverse case of cash being sent to the bank, the amount is recorded in the bank column on the receipts side and in cash column on payments side.
The entries that affect both the columns and sides of cash book, i.e. Cash and Bank, are termed as contra entries. It involves both the accounts, i.e. Cash and Bank A/c . For example, Cash withdrawn from bank for office use or deposited in the bank.
When a cheque is received and deposited in the bank, it cannot be termed as contra entry, as it involves two accounts: Bank A/c and the account of the party from whom the cheque is received.
Which of the following is/are advantages of the imprest system?
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It saves the time of the 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
Explanation
Under Imprest system, a fixed amount of money known as float is given to the petty cashier to meet petty expenditures for an agreed period which usually consists of a week or month.
At the end of agreed period, the petty cashier submits the details of all expenditures incurred by him to the chief cashier.
The imprest system of petty cash is used by most of the companies because of the following advantages:
1. The imprest system reduces the chances of misuse of cash because the float can be immediately reduced is it is found to be more adequate for the agreed period.
2. Under this system, the chief cashier periodically checks the record of petty cash. If an error is committed by petty cashier, it can be detected and rectified soon.
3. It saves the time of the firm's chief cashier who is usually a busy person with heavy responsibilities of handling large receipts and payments by cash and checks.
4. There are little to no chance of misappropriation of cash by the person in charge because the imprest sum is usually very small.
Which of the following books is used to record purchase of the machinery by cash ?
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Cash book
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Purchases book
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Journal proper
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Purchases returns book
Explanation
A cash book is a statement which records all the cash receipts and cash payments of the business transactions.
In case of machinery purchased by cash,the two accounts which get affected would be the machinery account and the cash paid as per the following entry:
Machinery Account Dr.
To Cash Account
Which of the following type of discount is not considered in accounts?
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Trade discount
0%
Special discount
0%
Cash discount
0%
None of the above
Explanation
Discount are of two kinds:
Trade discount and cash discount.
Trade discount is allowed to promote the sales and given as a general practice. Trade discount is allowed on the list price or catalogue price.
Trade discount is not recorded in books of account.
Net price i.e. List price minus trade discount is considered as sale value.
________will have a normal credit balance?
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Purchases
0%
Sales Returns and Allowances
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Freight-in
0%
Discount received
Explanation
Discount are having both types, discount allowed and discount received.
Discount allowed is debited to the expenses account while discount received is considered as income.
An accounting entry is passed as :
Creditors A/c Dr.
To Discount received A/c.
Discount received is an income and will show a credit balance.
Bank A/c will have _____.
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Debit Balance
0%
Credit Balance
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Nil
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Bebit or Credit balance
Explanation
Bank account may have debit or credit balance depending on the nature of transaction. If money is borrowed from a bank, that will show a credit balance and appear as liability in the balance sheet. If firms own money in lying in the bank, it will have a debit balance in firms book and appears as current asset in the balance sheet.
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
Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fare, fuel, etc. These small expenditures are usually paid using coins and currency notes rather than checks. The person responsible for spending petty cash and recording it in a petty cash book is known as petty cashier.
Under imprest system, a fixed amount of money known as float is given to the petty cashier to meet petty expenditures for an agreed period which usually consists of a week or month.
At the end of agreed period, the petty cashier submits the details of all expenditures incurred by him to the chief cashier.
The total cash spent by the petty cashier during the period is reimbursed to him and the total cash available to spend at the start of the next period becomes equal to the original sum. Hence, the petty cashier generally works on imprest system.
The advantages of imprest system of petty cash include:
The main (or head) cashier is relieved of maintaining record of petty payments
Small payments are not stuffed in the main cash book.
Complete and reliable check is maintained on small items of expenses
It is automatically balanced.
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$$1, 2$$ and $$4$$
0%
$$1, 2$$ and $$3$$
0%
$$2, 3$$ and $$4$$
0%
$$2$$ and $$4$$
Explanation
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
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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