Cashbooks and Petty Cashbooks

What is cash discount?

• an allowance given to a customer for paying in cash

• an allowance given to a customer for prompt payment

• a deduction from the list price of goods bought by a customer

• a deduction from the list price of goods for bulk buying by a customer

A business receives a bank statement and updates its cash book.

Which item will increase the bank balance in the cash book?

• bank charges

• credit transfers received

• interest charges

• standing orders paid

Ali receives a cheque from Hassan, a debtor, in payment for goods purchased by Hassan on credit.

Where will Ali enter this payment?

• cash book and sales ledger

• cash book and purchases ledger

• nominal/ general ledger and sales ledger

• nominal/ general ledger and purchases ledger

Which is part of the double entry system?

• petty cash book

• purchases journal

• sales return journal

• trial balance

Udoka bought goods on credit from Francis, $1000.

Udoka paid Francis by cheque after deducting 3% cash discount.

Which entries record this payment in Udoka’s books?

• bank 970 Dr

  discount allowed 30 Dr

  Francis 1000 Cr

• Francis 1000 Dr

  bank 970 Cr

  discount allowed 30 Cr

• bank 970 Dr

  discount received 30 Dr

  Francis 1000 Cr

• Francis 1000 Dr

  bank 970 Cr

  discount received 30 Cr

On 1 April Mary had a bank overdraft of $1450. On 2 April she paid $250 cash into the bank and paid rent, $390, by cheque.

What is Mary’s bank overdraft after the transactions on 2 April?

• $810

• $1310

• $1590

• $2090

A trader provides the following extract from her petty cash book.

Which entries are made in the ledger on 30 April?

• credit stationery account: credit cleaning account: credit ledger accounts

• credit stationery account: credit cleaning account: debit M. Ali account

• debit stationery account: debit cleaning account: debit ledger accounts

• debit stationery account: credit cleaning account: debit M. Ali account

Sam uses the imprest system of petty cash. The imprest amount is $300, which is restored at the end of each month.

The following takes place in March (see picture).

How much will the petty cashier receive from the cashier on 1 April?

• $274

• $284

• $294

• $300

Fred keeps a petty cash book on the imprest system with an imprest of $200. The book is balanced monthly and the imprest is restored on the first day of the following month.

Fred’s petty cash expenses for June totalled $175.

Which entries record restoration of the imprest on 1 July?

• debit cash book 175

  credit petty cash book 175

• debit petty cash book 175

  credit cash book 175

• debit cash book 200

  credit petty cash book 200

• debit petty cash book 200

  credit cash book 200