Bank Reconciliation Statement Test - 1

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.

Real accounts are the assets of the firm and will always have a debit balance except sales account and purchase returns accounts which will show credit balance.

Every transaction has two aspects i.e one is debit and its coreesponding credit aspect of the same amount. Dr and Cr is the abbrevaition used for the debit and credit respectively.

Only ledger accounts showing balances are shown in the trial balance. so acocunt showing nil balances are not shown in the trail balance.

Cash book records transactions of only cash nature. Receipts are recorded on debit side and payments are recorded on credit side.

Ledger is the most important book in accounting system. it contains all the accounts to which the transactions recorded in the original entry are transferred.It is also called final entry.

Supenses account shows the entries which are not recorded properly or which are wrongly recoreded and need to be corrected and thus its debit side is separately shown on asset side and credit side on liabilities side. suspense account is not balanced.

Contra entry means in which the same ledger is debited as well as credited but in separate columns of cash book. So when we deposit cash in the bank both cash and bank gets affected and thus it is a contra entry. and when cash is withdrwan from bank it is assumed to withdrwan for office use unless otherwise mentioned and thus will have affect on both cash and bank. So both the entries are contra entries.

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.

Sale of goods in cash is recorded in the cash book as separate subsidiary book i.e. cash book is prepared. so it is not recorded in the journal proper.