Unit 29 Establish and maintain a cash Accounting system

What is true about a cash accounting system?

• Recording sales only when cash is received

• Recording sales either it is cash or on account

• Recording credit sales

What is the main difference between cash and accrual system?

• A cash system means paying cash amounts while accrual system means paying by cheque

• A cash system recognizes purchases of assets when we pay its price while accrual system recognizes an asset at the time of purchase

• A cash accounting system is used in small companies while an accrual system is used in large companies

Which journal records purchase of equipment?

• Debit: Cash, Credit: Equipment

• Debit: Purchases, Credit: Cash

• Debit: Cash, Credit: Purchases

• Debit: Equipment, Credit: Cash

Which journal records salary expense paid by Cash?

• Debit Salary expense, Credit :Cash

• Debit :Cash ,Credit: Salary Expense

• Debit: Salary Expense ,Credit: Accounts Receivable

• Debit: Account Receivable , Credit: Salary Expense

In charts of accounts ,we can give:

• 2 different accounts the same account number

• Each account a number which cannot be given to another account

• Each account a number which can be given to 3 accounts

• Each account a number which can be given to 4 accounts

Which journal entry records security expense paid by cheque ?

• Debit Security expense, Credit: Bank

• Debit: Bank, Credit: Security Expense

• Debit: Account Payable, Credit: Security Expense

• Debit: Security Expense, Credit: Account Payable

Which of the following term represents a small amount of cash on hand that is used for paying small amounts owed refer to:

• Payment

• Petty Cash

• Expenditure

• Salary

What is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement?

• Bank reconciliation

• Cash accounting system

•    Organizational procedure

• Bank Payment

Invoice Processing, Payment Processing , and Bank reconciliation option are

• Features of chart of accounts

• Features of basic accounting software

• Features of organizational procedures

• Features of a cash accounting system

What is the aim of a bank reconciliation statement?

• To confirm expenses have been paid.

• To confirm the amount owed by debtors

• To explain the difference between the bank statement and cash book balances

• To identify increases in the bank balance during the accounting period.