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Recording of Transactions - II Test 35

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Recording of Transactions - II Test 35
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  • Question 1
    1 / -0
    Journal proper is issued to record __________.
    Solution
    A book maintained to record transactions, which do not find place in special journals, is known as journal proper. In order to update ledger account on accrual basis such adjusting entries are made at the end of the accounting period. such as rent outstanding, prepaid insurance, depreciation and commission received in advance. To rectify errors in recording transactions in the books of original entry and their posting to ledger accounts this journal is used. 
  • Question 2
    1 / -0
    Cash cannot be misappropriated by ____________.
    Solution
    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.
  • Question 3
    1 / -0
    Source documents for recording entries in the sales book are _________________.
    Solution
    A sales invoice issued by the firm to the customers serves as the source document to record in the sales day book.
    This is a document sent by the seller to the buyer (usually for credit sales) requesting the buyer to pay the amount stated on the invoice for goods or services rendered to him. Usually bills are sent for service rendered while invoices are sent for goods sold.
  • Question 4
    1 / -0
    Purchase of machinery for business on cash is recorded in ____________.
    Solution
    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.
  • Question 5
    1 / -0
    Double column cash book records transaction relating to __________ and ___________.
    Solution
    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.
  • Question 6
    1 / -0
    While posting in cash payment journal ___________________.
    Solution
     A cash payment journal is a special journal. Cash payment journal or cash disbursement journal is used to record all cash payments made by the business. All transactions during which you spend funds. For example, if you paid cash to any of your creditors, you would record it in your cash payment journal. Hence, the individual accounts are debited and also the total of the cash column is credited.
  • Question 7
    1 / -0
    Day-to-day cash transactions of club are recorded in __________.
    Solution
    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.
  • Question 8
    1 / -0
    Which of the following Cash Book is treated as a 'Cash Account' ?
    Solution
    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.
  • Question 9
    1 / -0
    Excess of bank withdrawal over bank deposits __________.
    Solution
    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.
  • Question 10
    1 / -0
    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.
    Solution
    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.
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