BHM 1- Cash Book Module 5 by Abhijit Ghose
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Questions and Answers

What is a cash book primarily used for?

  • Recording only daily cash receipts
  • Recording only bank deposits
  • Recording only bank withdrawals
  • Recording both cash receipts and disbursements (correct)
  • How are entries from the cash book transferred to the general ledger?

  • Ignored as they are not important
  • Transferred in an organized manner (correct)
  • Manually rewritten in a random order
  • Automatically synced in real-time
  • What is the purpose of dividing the cash book into cash disbursements and cash receipts journals?

  • To complicate accounting procedures
  • To record cash payments and receipts separately (correct)
  • To avoid recording transactions correctly
  • To eliminate the need for a general ledger
  • How can mistakes in the cash book be easily detected?

    <p>By verifying the cash balance against the actual cash on hand</p> Signup and view all the answers

    What does the term 'defalcation of money' refer to in relation to the cash book?

    <p>Detecting theft or embezzlement of funds</p> Signup and view all the answers

    In what way is a cash book described as both a ledger and a journal?

    <p>It serves as a record of all financial transactions</p> Signup and view all the answers

    What does a petty cash book help keep track of?

    <p>Routine and small expenses</p> Signup and view all the answers

    Who is responsible for managing petty cash and keeping track of it in a business?

    <p>The chief bookkeeper</p> Signup and view all the answers

    What kind of expenses are typically recorded in a petty cash book?

    <p>Routine daily expenses</p> Signup and view all the answers

    What is the purpose of maintaining a cash book in a business concern?

    <p>To identify and rectify frauds or discrepancies</p> Signup and view all the answers

    Who is typically responsible for entering all purchases in the debit column of a petty cash book?

    <p>The PCB accountant</p> Signup and view all the answers

    In what form are minor purchases usually made when recorded in a petty cash book?

    <p>Coins and cash</p> Signup and view all the answers

    What function does the cash book perform for a company?

    <p>Records all cash receipts on the debit side and cash payments on the credit side</p> Signup and view all the answers

    Which type of cash book is mostly used by individuals for tracking personal finances?

    <p>Single Column Cash Book</p> Signup and view all the answers

    What is a key advantage of using a Double Column Cash Book over a Single Column Cash Book?

    <p>Tracks each individual transaction in more detail</p> Signup and view all the answers

    Which statement best describes the Single Column Cash Book?

    <p>Records transactions in a single column and updates total received or paid out daily</p> Signup and view all the answers

    What limitation is associated with the Single Column Cash Book?

    <p>Does not track individual transactions in depth</p> Signup and view all the answers

    Why do businesses prefer using Double Column Cash Books?

    <p>To show details of each transaction separately</p> Signup and view all the answers

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