Bank Reconciliation Statement Test - 2

When Assets increases , we debit the said asset account.

Only purchase of goods i.e in which trading concern deals is recorded in purchase journal. and asset purchased for cash or credit will be recorded in the journal proper.

Only cash transactions are recorded in the cash book. Non-cash aspect of transaction is not recorerded in the cash book, i.e. credit trasnaction it is recorded in other books

In this an amount is fixed and advanced to the petty cashier in order to meet petty expenses.this is called imprest or float system.

As different subsidiary books are maitained it becomes conveninet in handling and maintaining the books. and thus the above option is not the advantage of subsidiary book.

Contra means the other side. When both the debit and credit aspects of a transaction are recorded simultaneously in the same book but in dfferent columns, each entry on the debit side and on the credit side is called the contra entry.

In the purchase book only purchase of goods on credit is recorded and thus cash purchases of goods and purchase of long term assets will not be recorded in the purchase book.

Since the cheques which are not presented to the bank will not reduce our bank balance but we have already subtracted those cheques from cash book bank column so it will show lesser balance so we will have to add the cheques issued but not presented in order to increase pass book balance to cash book bank balance.

The debit note issued to the supplier indicates the supplier that his account has been debited in the books of the firm., as his account balance is reducing.

As the bill receivable is the amount to be recevied by the seller from the buyer so it is prepared by seller which in turn is accepted by the buyer as acknowledgment of the debt and sent to the seller to collect on due date.