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Recording of Transactions - II Test 27

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Recording of Transactions - II Test 27
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  • Question 1
    1 / -0
    Which of the following is/are features of cash book ? 
    Solution
    The feature of the cash book is it performs the functions of both journal and ledger.
    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.
  • Question 2
    1 / -0
    In the Sales Book ______ of goods recorded. 
    Solution
    A Sales book is a record of all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales.
    The amount entered in the sales book is on behalf of invoices supplied to purchasers.
  • Question 3
    1 / -0
    When obsolete assets are sold on credit, these are originally recorded in the _____________.
    Solution
    General Journal is also known as Journal Proper. It records all those transactions that cannot be recorded in any other subsidiary book.
    The Journal Entry for the above transaction is 
    Vendor a/c     Dr.
          To Obsolete Assets a/c
    (Being Assets sold on credit)

  • Question 4
    1 / -0
    Balance of cash column in cash book has ____________.
    Solution
    Total of the debit side of the cash book or cash A/c always exceeds its credit side because payments of a business cannot exceed the receipts amount. So, the cash book shows debit balance. When payments are exactly equal to the receipt of the business, it will show zero balance, but it can never show the credit balance. Therefore, Balance of Cash book is always Debit or Zero.
  • Question 5
    1 / -0
    When the goods are returned to the supplier, a ______ is sent to him.
    Solution
    Debit note is prepared for every return of goods. It is prepared in duplicate. The original one is sent to the supplier while the duplicate copy is kept for our own records. 
    The Debit note contains the name of the supplier, details of goods returned and the reason thereof. Each debit note is dated and serially numbered.
  • Question 6
    1 / -0
    Cash purchases are recorded in _____________.
    Solution
    The journal Entry for cash Purchases is
    Purchases a/c    Dr.
          To Cash a/c 
    (Being Goods purchased for cash)

    As cash is involved in this transaction therefore, it will be recorded in the cash book.
  • Question 7
    1 / -0
    Cash sales are recorded in ___________.
    Solution
    The Journal Entry for Cash Sales is 
    Cash a/c              Dr.  
         To Sales a/c      
    (Being Goods sold for cash)

    So, Cash will increase therefore, it will be recorded in the cash book. 

  • Question 8
    1 / -0
    The debit balance of a cash account shows ______________.
    Solution
    Cash on Hand is an asset account, and this means that debits increase its balance, and credits decrease that total. This account, therefore, is said to carry a debit (DR) balance.
  • Question 9
    1 / -0
    Contra entry appears in ______________.
    Solution
    When a transaction effect both cash and bank then that entry is known as contra entry.
  • Question 10
    1 / -0
    Rs $$3,50,000$$ cash paid to creditors for settlements of credit purchases will be recorded in _______________.
    Solution
    As amount is paid to creditor therefore, it will affect cash balance therefore, it will be recorded in the cash book.
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