Get summaries, questions, answers, solutions, notes, extras, theories, practicles, PDF, and guide of Chapter 6 Cash Book, NBSE Class 9 Book Keeping (BK) textbook, which is part of the syllabus of students studying under Nagaland Board. These solutions, however, should only be treated as references and can be modified/changed.
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Summary
The chapter explains the Cash Book which is a special book used to record cash and bank transactions. All cash received and paid are noted in this book. It acts as both a journal and a ledger. This means it records transactions as they happen and also keeps track of all cash balances. Only cash and bank dealings are entered here. Non-cash transactions are not recorded in this book.
The Cash Book has two sides. The left side records cash coming in, called receipts. The right side shows cash going out, known as payments. Each page has columns for date, details, voucher number, ledger folio, and amount. Every transaction affecting cash or bank appears here. Transactions that involve both cash and bank affect both sides of the book. Such entries are marked with a ‘C’ in the ledger folio column.
There are different types of Cash Books. A Single Column Cash Book only records cash transactions. A Double Column Cash Book includes both cash and bank columns. Sometimes, businesses use a Triple Column Cash Book that also includes discounts. For small expenses, firms keep a Petty Cash Book.
The chapter describes how to handle common transactions. When cash is deposited into the bank, it is recorded on both sides. One side shows cash going out, and the other shows bank balance increasing. If a cheque is received and not deposited the same day, it is first recorded in a journal. Once deposited, it enters the Cash Book.
Some entries like drawings occur when a person takes money for personal use. Endorsement happens when a cheque received is given to someone else instead of depositing it in the bank. Bank charges are fees taken by the bank. Noting charges are penalties if a cheque bounces. These too have specific recording methods.
At the end of a period, the Cash Book is balanced. This involves comparing total receipts with total payments. Any leftover cash or bank balance is carried forward to the next period. Balancing ensures that records match actual cash in hand and bank statements.
The Petty Cash Book follows either an ordinary system or an imprest system. In the imprest system, a fixed amount is given to the petty cashier at the start. After spending, the cashier gets reimbursed for the exact amount spent. This way, he again starts with the fixed amount. The petty cash book can be simple or analytical based on how expenses are categorized.
Recording every detail helps maintain accurate financial records. Transactions involving cash or bank need careful entry. Proper documentation prevents errors and fraud. Through these methods, businesses ensure their cash records are always correct.
Textbook solutions
Multiple Choice Questions (MCQs)
1. Which of the following transactions are recorded in the Cash Book?
(a) Cash receipts and payments
(b) Credit purchases only
(c) Credit sales only
(d) Both credit purchases and credit sales
Answer : (a) Cash receipts and payments
2. When a firm maintains a cash book, it need not maintain………….
(a) Journal Proper
(b) Sales Book
(c) Purchase Book
(d) Cash and Bank Accounts in Ledger
Answer : (d) Cash and Bank Accounts in Ledger
3. If the debit as well as credit aspects of a transaction are recorded in the cash book, it is called………….
(a) Contra Entry
(b) Compound Entry
(c) Opening Entry
(d) Adjustment Entry
Answer : (a) Contra Entry
4. Which of the following will be recorded as Contra Entry?
(a) Cash directly deposited into bank by a customer
(b) Payment made to creditor by cheque
(c) Cash deposited into bank
(d) Cash sales
Answer : (c) Cash deposited into bank
5. Which is not a Contra Entry in the cash book?
(a) Cash deposited into bank
(b) Cash withdrawn from bank
(c) Cash withdrawn from bank for personal use
(d) None of these
Answer : (c) Cash withdrawn from bank for personal use
6. The petty cash book is used for recording:
(a) Cash transactions
(b) Credit receipts and payments
(c) Petty Cash Payments
(d) None of these
Answer : (c) Petty Cash Payments
7. The term imprest system is used in relation to:
(a) Purchases Book
(b) Credit transactions
(c) Sales Book
(d) Petty Cash Book
Answer : (d) Petty Cash Book
True/False
1. Cash Book is a real book.
Answer: True
2. Cash book is both a ledger account and subsidiary book.
Answer: True
3. Cash and credit transactions are recorded in Cash Book.
Answer: False
4. Bank column of cash book always shows debit balance.
Answer: False
Assertion Reason Based Questions
Choose the correct option:
A. Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A).
B. Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).
C. Only Assertion (A) is correct.
D. Only Reason (R) is correct.
1. Assertion: Petty cash book is prepared only for petty expenses and not for petty incomes.
Reason: The purpose of preparing petty cash is to separate the petty items from now petty receipts and payments.
Answer: A
2. Assertion: Cash Book records cash receipts and payments.
Reason: Cash receipts are recorded on the debit side of Cash book and cash payments on the credit side.
Answer: A
Statement Based Questions
Choose the correct option from the options given below:
A. Statement I is true and II is false.
B. Statement II is true and I is false.
C. Both the statements are false.
D. Both the statements are true.
1. Statement I: The term imprest system is used in relation to Petty Cash Book.
Statement II: The petty cash book issued for recording petty cash payments.
Answer: D
2. Statement I: Cash Book is a subsidiary book or special purpose book because it records only cash transactions.
Statement II: Cash book serves as a documentary evidence for the available cash balances.
Answer: D
Short Answer Type-l Questions
1. Define Cash Book.
Answer : Cash Book is a book of prime entry in which all transactions relating to cash receipts and cash payments are recorded in a chronological order, i.e., as they occur.
2. Write the types of Cash Book.
Answer : The types of Cash Book are:
- Single column cash book or Simple cash book.
- Double column cash book or Two-columns cash book.
- Triple column cash book.
In addition to the main Cash Book, firms sometimes also maintain a Petty Cash Book.
3. What is Single Column Cash Book?
Answer : A Single Column Cash Book, also known as a Simple Cash Book, is the simplest form of Cash Book. It records only the receipts and payments of cash, similar to an account with one amount column on each side. It records only transactions related to cash.
4. What do you mean by Double Column Cash Book?
Answer : A Double Column Cash Book is a type of cash book that has two columns representing amount figures on both sides. It may include columns for Cash and Discount, Bank and Discount, or Cash and Bank. Specifically, when it has Cash and Bank Columns, it records cash transactions in the cash column and bank transactions in the bank column.
5. What is Contra Entry?
Answer : A Contra Entry is an entry where both the debit and credit aspects of a transaction are recorded in the Cash Book itself. Such entries affect both the Cash Column and the Bank Column, such as when cash is deposited into the bank or withdrawn from the bank for office use. These entries are denoted by writing the letter ‘C’ in the L.F. column on both sides of the Cash Book.
6. Explain Petty Cash Book.
Answer : The Petty Cash Book is the book used for recording expenses involving small amounts. Besides petty expenses, receipts from the main cash are also recorded.
There are two systems of maintaining the Petty Cash Book:
- Ordinary System or Simple System of Petty Cash Book: In this system, an advance is given to the Petty Cashier. The amount given in advance may not be fixed, and this system is flexible.
- Imprest System of Petty Cash Book: Under this system, the amount required to meet various petty expenses is estimated for a certain period (e.g., a week, a fortnight, or a month). This amount, called the ‘imprest amount’, is given to the Petty Cashier at the beginning of the period.
7. What is imprest system?
Answer : The imprest system is a method used in relation to the Petty Cash Book. Under this system, an estimated amount required to meet various petty expenses for a specific period, such as a week, fortnight, or month, is determined and given to the Petty Cashier at the beginning of the period. This amount is referred to as the ‘imprest amount.’ The Petty Cashier uses this imprest amount to pay for all petty expenses and records them in the Petty Cash Book. At the end of the period, the Petty Cashier submits the vouchers to the head cashier, who reimburses the exact amount spent, ensuring the Petty Cashier again has the fixed imprest amount at the start of the next period.
Short Answer Type-II Questions
1. What is Cash Book? Explain its features.
Answer : Cash Book is a book of prime entry in which all transactions relating to cash receipts and cash payments are recorded in a chronological order, i.e., as they occur.
The features of the Cash Book are:
- Only cash and bank transactions are recorded in the Cash Book.
- Cash and cheque receipts are recorded on the debit side, while cash and cheque payments are recorded on the credit side.
- It records only one aspect of the transaction, i.e., cash and bank; double entry is completed by means of posting in the ledger to the respective account.
- Cash and bank transactions are recorded in the Cash Book in a chronological order, i.e., in the order they take place.
- It performs the role of both the Journal and the Ledger at the same time.
- Unlike any other account or book, the Cash Book is balanced daily.
2. Explain the types of Cash Book.
Answer : The types of Cash Book are as follows:
- Single Column Cash Book or Simple Cash Book : This is the simplest form of Cash Book, which records only cash receipts and payments. Its format is similar to an account, with one amount column on each side. The left-hand side, known as ‘debit’, records cash receipts, while the right-hand side, known as ‘credit’, records cash payments.
- Double Column Cash Book or Two-Columns Cash Book : This type of Cash Book has two columns representing amount figures on both sides. It may include columns for cash and discount, bank and discount, or cash and bank. In this unit, the Double Column Cash Book having Cash and Bank Columns is explained, where in addition to the Cash Column, a Bank Column is also maintained on each side to record cash and bank transactions.
- Triple Column Cash Book : This type of Cash Book contains three columns on each side, typically for recording cash, bank, and discount transactions.
In addition to the main Cash Book, firms sometimes maintain a Petty Cash Book , though it is not discussed in detail in this unit.
3. Explain Single Column Cash Book with the help of example.
Answer : A Single Column Cash Book, also known as a Simple Cash Book, is the simplest form of a Cash Book. It records only cash receipts and payments. Its format resembles an account with one amount column on each side. The left-hand side, known as the ‘debit’ side, records cash receipts, while the right-hand side, known as the ‘credit’ side, records cash payments. Only cash transactions are recorded in this book, excluding non-cash transactions, cheques received or issued, and cash discounts.
For example, if Ramesh started a business with ₹2,00,000 cash, it would be recorded on the debit side as “To Capital A/c.” Similarly, if he purchased goods for ₹40,000 in cash, it would be recorded on the credit side as “By Purchases A/c.” At the end of the period, the Cash Book is balanced by deducting total payments from total receipts to determine the closing cash balance.
4. What do you mean by Petty Cash Book? Explain the system of Petty Cash Book.
Answer : A Petty Cash Book is the book which is used for the purpose of recording expenses involving small amounts. Besides petty expenses, receipts from main cash are also recorded. The person who maintains this book is called the ‘petty cashier’.
The system of Petty Cash Book includes two types:
- Ordinary System or Simple System of Petty Cash Book : In this system, an advance is given to the Petty Cashier. The amount given in advance may not be fixed, and this system is flexible.
- Imprest System of Petty Cash Book : Under this system, the amount required to meet various petty expenses is estimated for a certain period (say, for a week, a fortnight, or a month). This amount, called the ‘imprest amount’, is given to the Petty Cashier at the beginning of the period.
5. Explain:
(a) Contra Entry
Answer : A contra entry is an entry where both the debit and credit aspects of a transaction are recorded in the cash book itself. Such entries affect both the cash column and the bank column of the cash book. For example, when cash is deposited into the bank or withdrawn from the bank for office use, it is recorded as a contra entry because it impacts both cash and bank balances.
(b) Cash deposited into bank
Answer : When cash is deposited into the bank, it increases the bank balance and reduces the cash balance. This transaction is recorded in the cash book by entering “To Cash A/c” in the particulars column on the debit side under the bank column, and “By Bank A/c” in the particulars column on the credit side under the cash column.
(c) Drawings
Answer : Drawings refer to the amount withdrawn by the proprietor for personal use. In the cash book, this amount is credited by recording “By Drawings A/c.” If the withdrawal is made in cash, the amount is shown in the cash column, and if it is drawn from the bank, it is shown in the bank column.
(d) Dishonour of cheque.
Answer : When a cheque received from a customer and deposited into the bank for collection is dishonoured, an entry is made on the credit side of the cash book. The amount of the dishonoured cheque is entered in the bank column, and the name of the customer is mentioned in the particulars column. For instance, if a cheque for ₹2,000 received from Ram Kumar is dishonoured, it will be recorded as “By Ram Kumar” in the cash book under the bank column.
Long Answer Type Questions
1. What is Cash Book? Explain its features and types.
Answer :Cash Book is a book of prime entry in which all transactions relating to cash receipts and cash payments are recorded in a chronological order, i.e., as they occur. According to Andrew Munro, “Cash book is used for recording the receipts and payments of money, whether in coins, notes, cheques, postal orders, bank drafts, etc.”
The features of Cash Book are:
- Only cash and bank transactions are recorded in the Cash Book.
- Cash and cheque receipts are recorded on the debit side while cash and cheque payments are recorded on the credit side.
- It records only one aspect of the transaction, i.e., cash and bank; double entry is completed by means of posting in the ledger to the respective account.
- Cash and bank transactions are recorded in the Cash Book in a chronological order, i.e., in the order they take place.
- It performs the role of both the Journal and the Ledger at the same time.
- Unlike any other account or book, cash book is balanced daily.
The types of Cash Book are:
- Single column cash book or Simple cash book.
- Double column cash book or Two-columns cash book.
- Triple column cash book.
In addition to the main Cash Book, firms sometimes also maintain a Petty Cash Book.
2. What do you mean by Petty Cash Book? Explain the systems of Petty Cash Book.
Answer : Petty Cash Book is the book which is used for the purpose of recording expenses involving small amounts. Besides petty expenses, receipts from main cash are recorded. The person who maintains this book is called the ‘petty cashier’.
In a business, besides large payments, a number of small payments, such as conveyance, stationery, cartage, etc., have to be made. It is not advisable to record all these transactions into the Cash Book, otherwise the clerical work will increase substantially. Therefore, it is usual for firms to appoint a person as ‘Petty Cashier’ and to entrust the task of making small payments, say, below ₹ 500, to him. Of course, he is reimbursed for the payments made.
There are two types of systems of Petty Cash Book:
- Ordinary System or Simple System of Petty Cash Book : In this system, an advance is given to the Petty Cashier. The amount given in advance may not be fixed. This system is flexible.
- Imprest System of Petty Cash Book : Under this system, the amount required to meet out various petty expenses is estimated for a certain period (say for a week, a fortnight, or a month). The amount so ascertained is given to the Petty Cashier in the beginning of a period. This amount is called ‘imprest amount’. The petty cashier goes on paying all petty expenses out of this imprest amount and records them in the petty cash book maintained by him. At the end of the given period, say after a month, the petty cashier produces the vouchers before the head cashier who, after having examined the petty cash book, reimburses the amount actually spent by the petty cashier. Thus, he will again have the fixed amount in the beginning of the new period reimbursed.
Advantages of Imprest System of Petty Cash:
(i) The time of chief cashier is saved when petty expenses are recorded in petty cash books.
(ii) Every petty expense is to be supported by vouchers duly attested. This minimises chances of frauds.
(iii) It gives the idea to check whether the amount advanced as imprest is sufficient to meet petty expenses.
(iv) Petty expenses are kept within the limits of imprest since the petty cashier can never spend more than the available petty cash.
Practical Problems
Questions
Single Column Cash Book
1. Enter the following transactions in a Single Column Cash Book:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2021 | ||
| March 1 | Commenced business with Cash | 40,000 |
| March 2 | Bought goods for Cash | 6,000 |
| March 5 | Sold goods for Cash | 5,000 |
| March 10 | Goods purchased from Ramit on Credit | 20,000 |
| March 13 | Paid to Ramit | 15,000 |
| March 15 | Cash Sales | 6,000 |
| March 18 | Purchased furniture for Office | 5,000 |
| March 20 | Paid Wages | 400 |
| March 24 | Paid Rent | 500 |
| March 26 | Received Commission | 700 |
| March 28 | Withdrew for personal expenses | 1,200 |
| March 31 | Paid Salary | 800 |
Solution: Check below
2. Enter the following transactions of Mr. Ripinder in a Single Column Cash Book and balance it:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2022 | ||
| Jan. 1 | Ripinder started business with capital | 2,00,000 |
| Jan. 2 | Purchased furniture | 50,000 |
| Jan. 3 | Purchased goods for cash | 30,000 |
| Jan. 5 | Paid freight | 750 |
| Jan. 7 | Sold goods for cash | 28,000 |
| Jan. 10 | Paid to Ronak | 20,000 |
| Jan. 15 | Sold goods for cash | 10,000 |
| Jan. 20 | Paid wages | 2,250 |
| Jan. 25 | Purchased goods | 20,000 |
| Jan. 31 | Paid rent | 5,000 |
Solution: Check below
3. Prepare Simple Cash Book from the following transactions of Mr. Sudhir of Delhi:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2022 | ||
| April 1 | Mr. Sudhir commenced business with cash | 80,000 |
| April 3 | He bought goods for cash | 50,000 |
| April 5 | Sold goods for cash | 1,000 |
| April 6 | Received cash from Mr. Manohar Lal | 3,600 |
| April 9 | Paid into Bank | 30,000 |
| April 13 | Paid cash to Vidant | 2,150 |
| April 16 | Sold goods for cash | 15,000 |
| April 17 | Paid for stationery | 150 |
| April 18 | Paid for office furniture | 1,850 |
| April 21 | Received from Mr. Kailash Chand | 6,800 |
| April 22 | Paid for advertising | 900 |
| April 25 | Purchased postage stamps | 80 |
| April 28 | Paid rent | 1,000 |
| April 30 | Paid electricity charges | 150 |
Solution: Check below
4. From the following particulars of Mr. Ramesh, prepare Simple Cash Book and balance the same:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2022 | ||
| April 1 | Ramesh started business with cash | 2,00,000 |
| April 2 | Opened a bank account and deposited | 1,50,000 |
| April 4 | Purchased goods for cash | 40,000 |
| April 6 | Sold goods for cash | 20,000 |
| April 8 | Purchased furniture for cash | 15,000 |
| April 9 | Purchased goods on credit from K & Co. | 35,000 |
| April 10 | Sold goods for cash | 55,000 |
| April 15 | Withdrew cash from bank | 50,000 |
| April 30 | Paid electricity bill | 5,000 |
| April 30 | Paid rent to landlord | 10,000 |
| April 30 | Paid salaries | 12,000 |
Solution: Check below
Double Column Cash Book (Cash and Bank Columns)
5. Enter the following transactions in Cash Book with Cash and Bank columns of M/s. Gupta Store:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2021 | ||
| June 1 | Cash in Hand ₹ 800, Bank overdraft ₹ 5,700 | |
| June 7 | Received a cheque from Bharati, Discount Allowed ₹ 150 | 3,250 |
| June 9 | Deposited the above cheque into Bank | |
| June 15 | Cheque received from Panna Lal | 1,200 |
| June 20 | Bharati’s cheque returned dishonoured | |
| June 28 | Panna Lal’s cheque was endorsed to Kamal | |
| June 30 | Income tax paid by cheque | 120 |
Solution: Check below
6. Enter the following transactions in a suitable Cash Book of Mr. Kapil and show the closing balances of cash and bank:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2023 | ||
| Jan. 1 | Balance of Cash in Hand ₹ 200 and at Bank ₹ 1,800 | |
| Jan. 3 | Received from Ramesh in cash | 800 |
| Deposited out of the above into Bank | 500 | |
| Jan. 4 | Cash sales | 600 |
| Jan. 5 | Paid salaries by cheque | 800 |
| Jan. 6 | Repairs of typewriters | 300 |
| Jan. 8 | Paid to Modern Co., half cash and half in cheque | 600 |
| Jan. 9 | Withdrew ₹ 200 from Bank. Paid packing charges ₹ 30 | |
| Jan. 10 | Sold goods for cash and paid half the proceeds into Bank | 2,800 |
| Jan. 12 | Cash purchases less trade discount 5% | 800 |
Solution: Check below
7. Enter the following transactions in Double Column Cash Book with cash and bank column of Shri Hareesh:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2022 | ||
| Jan. 1 | Cash at office ₹ 123, and Bank Balance (Cr.) 2,575 | |
| Jan. 2 | Cash sales | 1,570 |
| Jan. 3 | Deposited into bank | 1,500 |
| Jan. 5 | Mohan settled his account for ₹ 750 by giving a cheque for | 730 |
| Jan. 7 | Mohan’s cheque deposited into bank | |
| Jan. 10 | Bought goods and paid by cheque | 450 |
| Jan. 13 | Purchased stationery | 75 |
| Jan. 18 | Mohan’s cheque returned dishonoured | |
| Jan. 20 | Received a cheque from Prabhu which is deposited into Bank | 1,500 |
| Jan. 25 | Withdrew for office use | 475 |
| Jan. 31 | Paid salary for cheque ₹ 1,000 and rent in cash ₹ 150 |
Solution: Check below
8. Compile Cash and Bank Column Cash Book from the following transactions:
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|---|---|---|---|---|---|
| 2021 | 2021 | ||||
| June 1 | Cash Balance | 5,000 | June 21 | Drawn from Bank | 5,000 |
| June 1 | Bank Balance | 17,500 | June 29 | Paid office salaries in cash | 4,000 |
| June 5 | Cash received from sales of shares | 5,000 | June 30 | Sold goods for cash and banked the same | 8,000 |
| June 6 | Cheque received as advance against sale, paid into bank | 50,000 | June 30 | Paid rent by cheque | 1,000 |
| June 7 | Paid S. Bose by cheque | 12,500 | June 30 | Paid into Bank | 7,500 |
| Discount received | 200 | ||||
| June 9 | Paid wages in cash | 3,000 | |||
| June 20 | Received from A. Mukerji by a cheque and sent to bank | 6,000 |
Solution: Check below
9. Enter the following transactions in Double Column Cash Book with Cash and Bank Column of Raj & Co.:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2020 | ||
| March 1 | Cash balance | 2,00,000 |
| Bank overdraft | 48,00,000 | |
| March 2 | Introduced additional capital | 48,00,000 |
| March 5 | Deposited into bank | 32,00,000 |
| March 8 | Received from Rahul | 3,56,000 |
| Allowed discount | 2,000 | |
| March 12 | Paid to Girdhari Lal | 4,80,000 |
| Received discount | 12,000 | |
| March 15 | Bought goods for cash | 2,80,000 |
| March 17 | Sold goods for cash | 4,00,000 |
| March 18 | Purchased furniture by cheque | 6,00,000 |
| March 19 | Received a crossed cheque from Sohail ₹ 92,000 in full settlement of debt of ₹ 96,000 and deposited the same in bank | |
| March 22 | Paid commission through cheque | 60,000 |
| March 25 | Withdrew for personal use | 1,20,000 |
| March 26 | Paid to Khanna by cheque | 2,80,000 |
| Discount received | 8,000 | |
| March 27 | Withdrew for personal use | 1,20,000 |
| March 29 | Received dividend by cheque and deposited in bank on the same day | 12,000 |
| March 30 | Paid electricity bill | 20,000 |
| March 31 | Paid salary | 1,40,000 |
| March 31 | Paid rent | 80,000 |
| March 31 | Paid wages | 60,000 |
Solution: Check below
10. Prepare a Petty Cash Book on the Imprest System from the following particulars:
| Date | Particulars |
|---|---|
| July 1 | Received ₹ 15,000 from the Cashier |
| July 3 | Purchased Stationery ₹ 100 |
| July 6 | Paid for telegram ₹ 30, for charity ₹ 50 |
| July 7 | Purchased soap ₹ 55, Paid for Newspaper bill ₹ 185 |
| July 9 | Paid taxi fare ₹ 85, Coolie ₹ 15 |
| July 12 | Paid postal expenses ₹ 70 |
| July 14 | Paid auto fare ₹ 55, Paid for courier services ₹ 35 |
| July 25 | Speed Post Charges ₹ 84, Telegram charges ₹ 46 |
| July 26 | Paid carriage ₹ 43 |
| July 27 | Refreshment Expenses ₹ 87, Photostating charges ₹ 70 |
| July 28 | Pen/Pencils ₹ 155 |
| July 29 | STD calls charges ₹ 95 |
| July 31 | Loading charges ₹ 80 |
Solution: Check below
11. Enter the following transactions in the petty cash book of Sh. Sahil with appropriate analysis columns. Balance it on 15th May 2022 and show the amount which should be received from the cashier to make up the amount of the ‘imprest’ ₹ 490:
| Date | Particulars | Amount (₹) |
|---|---|---|
| 2022 | ||
| May 1 | Received from cashier ₹ 450, the amount required to make up the amount of the ‘imprest’ viz., ₹ 490 | 490 |
| May 1 | Purchased stamps | 50 |
| May 1 | Paid for carriage | 20 |
| May 3 | Paid for office cleaning | 10 |
| May 3 | Paid for telegram to Surinder Singh | 20 |
| May 3 | Paid railway fare | 30 |
| May 3 | Paid bus fare | 30 |
| May 8 | Paid for telephone calls | 20 |
| May 8 | Tea to office staff | 20 |
| May 10 | Paid reward to servants | 10 |
| May 10 | Bought shorthand note books for office | 50 |
| May 10 | Paid wages to casual labour | 30 |
| May 12 | Purchased Pens and Pencils | 40 |
| May 12 | Paid for envelopes | 20 |
| May 15 | Paid for repairs to typewriter | 10 |
Solution: Check below
12. Prepare Petty Cash Book from the following transactions. The imprest amount is ₹ 2,500:
| Date | Particulars | Amount (₹) |
|---|---|---|
| January | ||
| 1 | Paid cartage | 60 |
| 2 | STD charges | 50 |
| 2 | Bus fare | 25 |
| 3 | Postage | 35 |
| 4 | Refreshment for employees | 86 |
| 6 | Courier charges | 35 |
| 8 | Refreshment of customer | 54 |
| 10 | Cartage | 32 |
| 15 | Taxi fare to manager | 78 |
| 18 | Stationery | 75 |
| 20 | Bus fare | 20 |
| 22 | Fax charges | 40 |
| 25 | Telegrams charges | 40 |
| 27 | Postage stamps | 250 |
| 29 | Repair of furniture | 120 |
| 30 | Laundry expenses | 150 |
| 31 | Miscellaneous expenses | 160 |
Solution: Check below
Solutions
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Extras
Additional questions and answers
1. Define Cash Book?
Answer : A Cash Book is a record that documents all money transactions involving coins, notes, and cheques.
35. What is Analytical Petty Cash Book? Discuss its features and advantages.
Answer : The Analytical Petty Cash Book is the best way of recording various petty cash payments in separate columns under suitable heads of expenditure. The number of columns depends on the nature and requirements of a particular trade.
Features of the Analytical Petty Cash Book include:
- Separate columns are provided for each head of expense, such as Conveyance, Cartage, Stationery, Postage, Wages, and Sundry Expenses.
- Those expenses that are not entered in any specific column are entered in the ‘Sundry Expenses’ column.
- At the end of the period, the totals of the analysis (expenses) columns are added and posted to the debit side of the respective accounts.
Advantages of the Analytical Petty Cash Book are:
- It facilitates the posting of expenses from the totals of the various columns to the respective accounts in the ledger.
- It ensures systematic recording of all petty expenses under appropriate heads.
Additional MCQs
1. What is a Cash Book?
A. Book of prime entry
B. Ledger account
C. Journal record
D. Memorandum book
Answer: A. Book of prime entry
34. What is recorded in the “V.No.” column of the Cash Book?
A. Transaction amount
B. Voucher serial number
C. Ledger page number
D. Date of transaction
Answer: B. Voucher serial number
Ron’e Dutta is a journalist, teacher, aspiring novelist, and blogger who manages Online Free Notes. An avid reader of Victorian literature, his favourite book is Wuthering Heights by Emily Brontë. He dreams of travelling the world. You can connect with him on social media. He does personal writing on ronism.
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