Chapter MCQ Test 2 — Cash Book
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
A firm receives a cheque from a customer and deposits it the same day. In a triple column cash book it is recorded in the:
Bank column, debit side
Cash column, debit side
Bank column, credit side
Discount column
Explanation: A cheque banked at once is a receipt through the bank — bank column, debit side.
Question 2 of 10
Received Rs 4,900 from Anil in full settlement of Rs 5,000 by cheque. The cash book records:
Bank 4,900 (Dr) and discount allowed 100 (Dr)
Cash 5,000 (Dr)
Bank 5,000 (Dr) and discount 100 (Cr)
Bank 4,900 (Cr)
Explanation: The cheque (4,900) goes to the bank debit column; the Rs 100 saved by Anil is discount allowed in the debit discount column.
Question 3 of 10
Why does a contra entry require NO posting to the ledger?
Both the debit and credit are already inside the cash book
It is too small
It is a credit sale
It is an error
Explanation: Cash and bank are both columns of the cash book, so the double entry is complete within it.
Question 4 of 10
Cash withdrawn from the bank for OFFICE use is a contra entry, but cash withdrawn for the OWNER'S personal use is:
Drawings — not a contra entry
Also a contra entry
A discount
Not recorded
Explanation: Personal withdrawal is drawings (Bank credited, Drawings debited in the ledger), not a movement within the firm's own cash/bank.
Question 5 of 10
At month-end the discount-allowed column totals Rs 600. This Rs 600 is:
Posted to the debit of Discount Allowed A/c
Posted to the credit of Discount Received A/c
Balanced and carried down
Added to cash
Explanation: The debit discount column total is posted to the debit of the Discount Allowed Account (an expense).
Question 6 of 10
The imprest amount is Rs 3,000. During the month the petty cashier spends Rs 2,450. The closing petty cash balance before reimbursement is:
Rs 550
Rs 3,000
Rs 2,450
Nil
Explanation: 3,000 − 2,450 = Rs 550 remains; the cashier will then be reimbursed Rs 2,450 to restore Rs 3,000.
Question 7 of 10
The chief advantage of the imprest system is that it:
Controls petty spending and keeps the float fixed and vouched
Increases profit
Removes the need for vouchers
Lets the cashier hold unlimited cash
Explanation: The fixed, regularly-reimbursed float with vouchers gives tight control over small payments.
Question 8 of 10
A cheque received earlier is dishonoured by the bank. In the cash book this is recorded by:
Entering it on the credit (payment) side of the bank column
The debit side of cash
The discount column
Ignoring it
Explanation: A dishonoured cheque reverses the earlier bank receipt, so it is shown on the credit side of the bank column.
Question 9 of 10
Why is a separate cash account NOT opened in the ledger when a cash book is kept?
The cash book itself serves as the cash account
Cash is unimportant
It is illegal
Cash has no balance
Explanation: Being both journal and ledger, the cash book is the cash account, so a duplicate would be pointless.
Question 10 of 10
In the analytical petty cash book, the analysis columns are totalled and:
Each total posted to its respective expense account
All posted to cash
Posted to capital
Left unposted
Explanation: Each analysis column's total is posted to the relevant expense account, saving many small ledger entries.