Recording and Posting of Cash Transactions Test 3

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Recording and Posting of Cash Transactions Test 3

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Question 1
1 / -0

Petty cash system is designed ________________.

A
To meet the needs of small businesses

B
To cover small and miscellaneous income

C
To cover the small expenditure to be paid in cash

D
To cover both small incomes and expenditure

Solution

Petty cash system is used to pay small day to day expenses on daily basis. A sum of total spent amount is transferred to cash book and expense account for a particular period rather than recording each individual small transaction.
Question 2
1 / -0

When a firm maintains a cash book, it need not maintain _______________.

A
Journal Proper

B
Purchase(journal)book

C
Sales(journal)book

D
Bank and cash account in the ledger

Solution

When a firm maintains a cashbook, it does not need to maintain Separate Bank and cash account in the ledger.
Question 3
1 / -0

Credit balance shown by a bank column in cash book is ______.

A
Cash

B
Overdraft

C
Cash credit

D
None of the above

Solution

The debit balance as per the cash book means the balance of deposits held at the bank.
It indicates the favourable balance as per cash book or favourable balance as per the passbook. On the other hand, the credit balance as per the cash book indicates bank overdraft.
Question 4
1 / -0

Total of the debit side of cash book is ___ than the credit side.

A
More

B
Equal to

C
Less

D
None of these

Solution

When the total of debit column of the Cash Book (Bank column) is more than the total credit column of Cash Book (Bank column), it is known as debit balance. That is, there is a favourable balance of cash deposited at the bank. When Cash Book balance is given, it is treated as debit balance.
Question 5
1 / -0

The amount paid to the petty cashier at the beginning of a period is known as __________ amount.

A
Imprest

B
Credit

C
Idle

D
None of these

Solution

Imprest - It is a fund used by a business for small items of expenditure, and restored to a fixed amount periodically.
Hence, a petty cash book is kept on the imprest amount.
Question 6
1 / -0

Cash book does not record the _________ transactions.

A
Cash

B
Purchase

C
Credit

D
All of the above

Solution

All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side as a debit, and all cash payments are recorded by date on the right-hand side as a credit.
Question 7
1 / -0

In double column cash book, one is for cash and other is the ___________ column.

A
Credit

B
Bank

C
Discount

D
All of the above

Solution

Cash book with cash and bank column has one additional column on the receipt and payment side along with cash column which is the bank column. Only bank transaction are recorded in this column.
Question 8
1 / -0

Cash book is a _______( journal).

A
Subsidiary

B
Purchase

C
Sales

D
Purchase and Sales Return

Solution

A cash book is a subsidiary to the general ledger in which all cash transactions during a period are recorded.
Question 9
1 / -0

Amount of discount deducted from invoice price is called a __________.

A
cash discount

B
trade discount

C
quality discount

D
all of the above

Solution

Discount is the deduction in the price of the goods sold. It is offered in two ways. Offering deduction of agreed percentage of list price at the time of selling goods is one way of giving discount. Such discount is called as "Trade Discount".
Question 10
1 / -0

Cash column of cash book can never have _______ balance.

A
Credit

B
Debit

C
Zero

D
None of the above

Solution

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.
On the left side, all-cash transactions relating to cash receipts (debits), and on the right side all transactions relating to cash payments (credits) are entered date wise. When a cash book is maintained, a separate cash book in the ledger is not opened.
The cash book is balanced in the same way as an account in the ledger. But it may be noted that in the case of the cash book, there will be always a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.

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Re-Attempt Weekly Quiz Competition

Recording and Posting of Cash Transactions Test 3

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Recording and Posting of Cash Transactions Test 3

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SHARING IS CARING

Question 1

To meet the needs of small businesses

To cover small and miscellaneous income

To cover the small expenditure to be paid in cash

To cover both small incomes and expenditure

Solution

Question 2

Journal Proper

Purchase(journal)book

Sales(journal)book

Bank and cash account in the ledger

Solution

Question 3

Cash

Overdraft

Cash credit

None of the above

Solution

Question 4

More

Equal to

Less

None of these

Solution

Question 5

Imprest

Credit

Idle

None of these

Solution

Question 6

Cash

Purchase

Credit

All of the above

Solution

Question 7

Credit

Bank

Discount

All of the above

Solution

Question 8

Subsidiary

Purchase

Sales

Purchase and Sales Return

Solution

Question 9

cash discount

trade discount

quality discount

all of the above

Solution

Question 10

Credit

Debit

Zero

None of the above

Solution

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