Chapter 7 Cash Book

Cash book records ………… receipts and payments.

• cash
• credit
• cash and credit both
• either cash or credit
• neither cash nor credit

If the debit and credit aspects of a transaction are recorded in the cash Book it is a:

• (a) Contra entry

• (b) Simple entry

• (c) Double entry

• (d) Single entry

In three column cash book, when does contra entry occurs?

• withdrawal of cash from bank

• payment to creditors

• withdrawal of cash from bank for personal use

• all of the above

While balancing three column cash book, the discount column are:

• totalled but not adjusted

• totalled and also adjusted

• totalled but not balanced

• balanced but not totalled

The balance on the credit side of the bank column in cash book indicates

• total amount withdrawn from the bank

• total amount deposited in the bank

• cash at bank

• bank overdraft

2. The balance of cash column of cash book never shows a:

• credit balance

• debit balance

• none of the above

• all of the above

The “C” in the folio columns of Cash Book means __________.

• creditor’s account has been settled

• cash being withdrawn for own use

• customer’s account is in “Contra”

• cash being deposited into bank

There is a transfer of money from bank account to cash account in a Cash Book. Which of the following statements regarding the transfer is true?

• Posting is needed for the transfer.

• The transfer does not involve double entry.

• Money is withdrawn for personal use.

• The transfer appears in the same books.

A person bought a television set a list price RM2,000 on credit. Trade discount was 10% and cash discount 5%. He settled his debt within the discount period. Which of the following entries in his book is correct?

• Credit: Cash RM 1,800

• Credit: Cash RM 1,710

• Debit: Accounts Receivable RM 1,800

• Debit: Accounts Receivable RM 1,710

Under which of the following circumstances will a customer get a cash discount?

• When the seller deals with a specified customer

• When goods are bought by cash or cheque

• When goods are bought on credit

• When accounts are paid according to the terms of payment