Three Column Cash Book

The single column cash book records all ……... transactions of the business

• cash
• bank
• cash and bank both
• any of cash or bank
• savings bank

What is cash discount?

• an allowance given to a customer for paying in cash

• an allowance given to a customer for prompt payment

• 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

Which of the following will not be recorded in cash book?

• cash sales

• purchase of furniture

• purchases of raw materials on credit

• payment of wages

Which of the following is recorded on the credit side of the cash book?

• cash sales

• credit purchases

• dividend received

• salary paid

Which of the following transactions are recorded in cash book?

• cash transactions only

• credit transactions only

• cash and credit transactions only

• all of the above

Which of the following is recorded on debit side of cash book?

• cash sales

• drawings

• credit sales

• cash purchases

The total of the ‘Discount Allowed’ column in the Cash Book is posted to

• the debit of the Discount Allowed Account

• the debit of the Discount Received Account

• the credit of the Discount Allowed Account

• the credit of the Discount Received Account

A cash discount is best described as a reduction in the sum to be paid

• if payment is made within a previously agreed period

• if payment is made by cash, not cheque

• if payment is made either by cash or cheque

• if purchases are made for cash, not on credit

Discount gained from supplier for the prompt payments is known as _________.

• Discount Received

• Discount Allowed

• Trade Discount

• Cash Discount

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