Recording And Posting Of Cash Transactions - Class 9 Elements Of Book Keeping And Accountancy - Extra Questions

Briefly state how the cash book is both journal and ledger.

Cash book is basically the book of original entry. When cash book is maintained, transaction of cash are not recorded in journal and separate account for cash or bank is required in ledger, in this way, it serves the purpose of journal as well as the ledger.


What do you understand by imprest amount in petty cash book?

Imprest amount is an amount of money given by the main cashier to the petty cashier in the beginning of the period. At the end of the period, the amount spent by the petty cashier gets reimbursed in such a manner, that he has the same amount of cash in hand in the beginning of next period. 
For example, if the main cashier gives an imprest amount of Rs. 1,000 to the petty cashier on April 01, 2011 and at the end of the month the petty expenses amount to be Rs. 850 which is spent by the petty cashier during the month. In this case, Rs. 850 will be reimbursed, so, that on May 01, 2011, the petty cashier will have Rs. 1,000 at his disposable to meet petty expenses for the next month.


What is petty cash book? Write the advantages of petty cash book.

Petty cash book is used for recording payments of small expenses, which are of smaller denominations such as postage, stationery, conveyance, refreshment, etc. Person who maintains Petty cash book is known as petty cashier and these small expenses are termed as petty expenses.

Advantages of Petty cash book:
1. Simple method: Recording of transactions in a petty cash book is easy. In an analytical petty cash book, there exists separate heads for different petty expenses, which makes recording much easier. Recording in a petty cash book does not require formal knowledge of accounting principles and techniques.
2. Time saving: Recording in petty cash book dsaves time and efforts of teh chief cashier.
3. Efficient control: At teh end of a period, Petty cash book is audited by the main cashier, so frauds and errors are less probable.
4. Convenient handling: Recording in petty cash book is convenient, as entries are to be recorded under separate heads, which makes posting easier and quicker.




Which discount is earned for payment of cash or allowed for receipt of cash.

Cash discount is allowed to the customers for making prompt payment. In other words, cash discount is allowed only if the customer makes the payment within a fixed period. 
Such discount motivates the customer to make the payment at the earliest. 
As the discount is allowed at the time of making payment, so the entry for cash discount is recorded along with the entry payment. 
Discount is a nominal account and as such, it s debited when it is allowed to a customer and credited when it is received.


Class 9 Elements Of Book Keeping And Accountancy Extra Questions