Question

Select the Correct Answer
(a) When a firm maintains a cash book, it need not maintain ;
(i) Journal Proper
(ii) Purchases (journal) book
(iii) Sales (journal) book
(iv) Bank and cash account in the ledger

(b) Double column cash book records:
(i) All transactions
(ii) Cash and bank transactions
(iii) Only cash transactions
(iv) Only credit transactions

(c) Goods purchased on cash are recorded in the :
(i) Purchases (journal) book
(ii) Sales (journal) book
(iii) Cash book
(iv) Purchases return (journal) book

(d) Cash book does not record transaction of :
(i) Cash nature
(ii) Credit nature
(iii) Cash and credit nature
(iv) None of these

(e) Total of these transactions is posted in purchase account :
(i) Purchase of furniture
(ii) Cash and credit purchase
(iii) Purchases return
(iv) Purchase of stationery

(f) The periodic total of sales return journal is posted to :
(i) Sales account
(ii) Goods account
(iii) Purchases return account
(iv) Sales return account

(g) Credit balance of bank account in cash book shows :
(i) Overdraft
(ii) Cash deposited in our bank
(iii) Cash withdrawn from bank
(iv) None of these

(h) The periodic total of purchases return journal is posted to :
(i) Purchase account
(ii) Profit and loss account
(iii) Purchase returns account
(iv) Furniture account

(i) Balancing of account means :
(i) Total of debit side
(ii) Total of credit side
(iii) Difference in total of debit & credit
(iv) None of these

Answer 1

Answer:

(A) iv

(B) ii

(C) iii

(D) ii

(E) ii

(F) iv

(G) ii

(H) iii

(I) iii

Answer 2

All the answers are with the explanation why it is right and why the others are not.

Explanation:

(a) (iv) Bank and Cash account in the ledger .

When a firms maintain a cash book they need not to maintain bank and cash account ledger separately as all the transactions are already recorded in the cash book. Rest other books are to be created.

(b) (ii) Cash and Bank transactions

It has two columns on both the debit as well as credit sides having one column of cash and one of bank.

All transaction cannot be recorded in cash book, only cash transaction are recorded in single column cash book, credit transaction are not recorded in cash book.

(c)(i)Purchase book

All the items related to purchase are recorded in purchase book. Sales book records sales related transaction. Cash book relates to transaction of cash nature and purchase return records transaction of purchase return.

(d)(ii) Credit Nature

Cash book records all the transaction which are on cash basis only. Credit related to transactions are not recorded in cash book.

(e)(ii) Cash and Credit purchase

Purchase account records all the transaction related to purchase whether it is on cash basis or credit basis.

(f)(iv) Sales return account

Sales return account records all the goods which are returned by the customer.

(g)(i) Overdraft

overdraft means that the amount drawn from bank account is more than the amount it actually holds.

(h) (iii) Purchase return account

Purchase accounts record transaction relating to purchase , profit and loss account help to identify the profit whereas furniture account is related to purchase of fixed asset i.e furniture.

(i)(iii) Difference in total of debit and credit

Balancing is the difference between the debit and credit sides. We total the debit and credit side and then find out the balance by subtracting one side from other