vs SPECIAL PURPOSE BOOK - CASH BOOK 

ONE WORD TO ONE SENTENCE QUESTIONS

Q.1        What is a cash book ?

Ans      Cash book is a primary book meant for recording all cash ( including bank) transactions wise

Q.2        Write one difference between cash account and cash book ?

Ans      Cash account is a principal book whereas cash book is a subsidiary book .

Q.3        Give one advantage of maintaining a cash book .

Ans      Cash book is a journal as well as ledger . when cash book is maintained , no separate cash  account is opened in the ledger .

Q.4        What does the balance in cash book indicate ?

Ans      Balance in cash book indicates cash in hand .

Q.5        Why cash book will always show a debit balance ?

Ans      Cash books must always show debit balance because no one can pay more than what one possesses

Q.6        What is cash discount ?

Ans      It is reduction granted by a supplier from the amount due . it is allowed by creditor to debtor.

Q.7        What is trade discount ?

Ans      It is reduction granted by supplier from the list price of goods or services .

Q.8        What does the term contra mean ?

Ans      Contra means the both side .

Q.9        What are contra transactions ?

Ans      When both the debit and credit aspects of a transaction are recorded simultaneously in the same book but in different columns is called contra entry .

Q.10     What do you mean by petty cash book ?

Ans      It is the cash book which is used for the purpose of recording the payment of petty cash expenses .

Q.11     Give two advantages of petty cash book .

Ans      (I) saving time and labor .

(II) reduction in the number of transactions .

Q.12     What are two systems of recording petty cash ?

Ans      (i) ordinary system of petty cash .

(ii) import system of petty cash.

Q.13     What are the types of petty cash book .

Ans      (i)  analytical petty cash book

(ii) non - analytical petty cash book .

Q.14     Give an example of contra entry ?

Ans      Cash deposited in bank

Bank A/C                           Dr .

To cash account

Q.15     What is bank draft ?

Ans      It is a cheque drawn by a bank usually on one of its branches , directing them to pay a specified sum of money to a person named in the draft .

Q.16     Name the monetary columns in triple column cash book .

Ans      Discount cash and  bank .

 FILL IN THE BLANKS

1.      Cash book is a __________book.

2.      Only _________transactoins are recorded in cash book.

3.      While making entries in cash book the rule of _________account is followed.

4.      Cash book maintained to record small expenses is called __________.

5.      __________book is journal as well as ledger.

Ans 1. Subsidiary 2. Cash 3. Real 4. Petty cash book 5. Cash 

TRUE OR FALSE STATEMENTS

1.      Bank account is a real account .

2.      Discount account is personal account .

3.      Bank  column of the cash book always shows debit balance .\

4.      A contra entry appears on both sides of cash book .

5.      Cash sales are recorded in the sales book

6.      Cash account is a real account.

7.      Cash book is both a subsidiary book and a ledger account .

8.      Assets and liabilities are the two sides of cash book .

Ans 1. True 2. False 3. False 4. True 5. False 6. True 7. True  8. False

MULTIPLE  CHOICE QUESTIONS

1.      Cash account will show

A.   Debit or credit balance

B.   Credit balance

C.   Debit balance

D.   None of these

2.      Cash sales are recorded in

A.   Sales book

B.   Cash book

C.   Journal

D.   None of these

3.      The balance of petty cash book is :

A.   A liability

B.   An expense

C.   A gain

D.   An asset

4.      Cash discount is provided on :

A.   Prompt  payment

B.   Sale

C.   Purchase

D.   None of these

5.      The term imprest system is used in relation to

A.   Purchase book

B.   Sale

C.   Cash book

D.   Petty cash book

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

A.   Journal proper

B.   Purchase book

C.   Sales book

D.   Cash and bank accounts in ledger

7.      Which of the following is not recorded in cash book .

A.   Trade discount

B.   Dad debts

C.   Credit purchases

D.   All of the above

8.      Which is not contra entry in the cash book

A.   Cash deposited into bank

B.   Cash withdrawn from bank

C.   Cash withdrawn from bank for personal use

D.   None of these

9.      Which of the following may have both br or cr balance

A.   Only cash column of cash book

B.   Only bank column of cash book

C.   Both cash and bank column

D.   Neither bank nor cash column

10.   Salary due for the month of march will appear in which side of cash book

A.   Receipt

B.   Payment

C.   Contra

D.   None of the above

Ans 1. (c)  2. (b)   3. (d)   4. (a)   5. ( d)  6 (d)    7. ( d) 8. ( c)  9. ( b)  10. ( d)