accountancy quiz

In which book are cash transactions recorded immediately?

• Ledger

• Journal

• Cash Book

• Trial Balance

What is the purpose of a journal entry in accounting?

• To record financial statements

• To record business transactions

• To calculate taxes

• To prepare budgets

What information is recorded in the third column of three column cash book?

• Cash payments

• Cash receipts

• Discounts allowed

• Discounts received

According to the double-entry accounting principle, every transaction affects at least how many accounts?

• one

• two

• three

• four

What is the primary advantage of using a three-column cash book over a single-column cash book? a. Simplicity b. Better analysis of cash transactions c. Requirement by law d. Faster recording of transactions

• Simplicity

• better analysis of cash transactions

• Requirement by law

• faster recording of transactions

A cashbook serves the following purpose:

• It works as a ledger account

• it works as a book of original entry as well as a ledger account

• It works as a book of original entry

• None of the above

The journal proper is used for recording:

• Routine business transactions

• Only cash transactions

• non-routine or special transactions

• Only sales transactions

In a cashbook, a contra entry involves __________:

• A cash account and a bank account

• A cash account and a sales account

• A cash account and a discount account

• A bank account and a discount account

The total of the discount column on the debit side of a cashbook is posted to the:

• Debit side of the discount allowed account in the ledger

• Credit side of the discount allowed account in the ledger

• Debit side of the discount received account in the ledger

• Credit side of the discount received account in the ledger

When an error is discovered in the cash book, what is the correct sequence of steps for correction?

• Identify error, journal entry, ledger adjustment

• identify error, ledger adjustment, journal entry

• Journal entry, identify error, ledger adjustment

• Ledger adjustment, identify error, journal entry