Cash Book - Principles of Accounting

Cash Book - Principles Of Accounting
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What is cash book? Cash book is For recording the receipts and payments of cash and cheques only. It is considered as both a journal and a ledger. Cash Discount and Trade Discount: (A) Cash Discount: The term cash discount refers to the reduction or allowance given for quick payment in cash or by cheque. The cash discount can be discount allowed or discount received.
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(i) Discount allowed: A reduction given to customers (debtors) who pay their accounts within the time limit. Discount allowed is an expense for the business. (ii) Discount received: A reduction given to us by the suppliers (creditors) when we pay their accounts before the time allowed has elapsed. Discount received is an income for the business.
(B) Trade Discount: Trade discount is the reduction allowed from the list price (selling price) of the goods. Trade discount is not recorded in the accounts but cash discounts are recorded in the accounts.
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. Contra Entry: A contra entry for cash book items is where both the debit and credit are shown in the cash book itself.
Format of the Two Column Cash Book
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Accounting.Technol... Free Accounting Software Systems. Evaluations, Comparisons & Reports! Assignment Questions: 1. A cash book shows a debit balance $ 50. What does this mean? B. D. Cash has been over spent by $ 50 Total cash received is less than $ 50
A. There is cash in hand $ 50 C. Total cash paid out $ 50
2. We bought goods on credit from Charles. He was paid within prescribed time and he gave a reduction for that. What does this reduction mean for us? A. Discount allowed C. Discount given B. Discount received D. Special discount
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3. A. Cash book B. Bank book C. Sales book D. Pass book
Which of the books does consist a cash account and a bank account put together in to one book?
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4.
A trader maintains the two column cash book. $ 1,000 $ $ 200 350
Debit balance of bank column Cheques deposited Cheques drawn for cash
What is the balance of the bank column at the end? A. $ 1,150 B. $ 1,000 C. $ 850 D. $ 1,550
5. What does the discount column of the cash book record?
C. Discount for bulk buying D. Discount for suppliers 6. A cash book shows a debit balance $ 50. What does this mean? B. D. Cash has been over spent by $ 50 Total cash received is less than $ 50 A. There is cash in hand $ 50 C. Total cash paid out $ 5
A. Discounts for trade customers
B. Discounts for prompt payment
7. We bought goods on credit from Charles. He was paid within prescribed time and he gave a reduction for that. What does this reduction mean for us? A. Discount allowed C. Discount given B. Discount received D. Special discount
8.
Which of the books does consist a cash account and a bank account put together in to one book? B. Bank book D. Pass book
A. Cash book C. Sales book
9.
A trader maintains the two column cash book. $ 1,000 $
Debit balance of bank column Cheques deposited 200 Cheques drawn for cash $ 350 What is the balance of the bank column at the end? A. $ 1,150 B. $ 1,000 C. $ 850 D. $ 1,550 10. What does the discount column of the cash book record? A. Discounts for trade customers C. Discount for bulk buying B. Discounts for prompt payment D. Discount for suppliers
LONG QUESTIONS: Q.1. Prepare a Two Column Cash Book for the month of December 2005 from the following transactions. 2005 Dec 1 Dec 2 Dec 4 Dec 6 Dec 7 Dec 15 Dec 23 Proprietor puts Capital into a bank account for the business $ 9,400 Received cheque from Boon $ 1,100 Cash Sales $ 1,200 Paid rent by cash $ 450 Deposited Cash into Bank $ 500 Cash Sales paid directly into the Bank $ 400 Paid cheque to S,wills $ 2,700
Dec 29 Withdrew cash from bank for business use $ 1,200 Dec 30 Paid wages in cash $ 1,100
Q.2. Prepare a Two column cash book for the month of January 2006 from the following transactions.
2006 Jan 1 Jan 3 Started business with Cash $ 10,000 and of Bank $ 15,000 Bought goods by cheque $ 3,000
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Jan 5 Jan 6
Sold goods for cash $ 5,000 Paid Wages in cash $ 700
Jan 10 Paid for postage and stationery $ 300 in cash Jan 13 Bought goods from Jack for $ 3,000
Jan 15 Bought goods for Cash $ 5,000 Jan 18 Sold goods and received by cheque $ 7,000 Jan 20 Sold goods to Jim for $ 2,000 Jan 24 Paid Telephone charges by cheque $ 1,000
Jan 27 Withdrew from Bank $ 1,000 for personal use Jan 29 Cash sales $ 1,500 Jan 30 Withdrew cash from Bank business use $ 1,500 Q. 3 Write up a Two column cash book from the following for the month of November 2002. 2002 Nov. 1 Balances brought down from the last month:
Jan 26 Cash deposited into bank $ 5,000
Cash $1,050 (Dr)Bank $2,100 (Cr) 3 4 5 6 7 8 9 Cash sales $ 600 Took $1,200 from the cash till and deposited in the bank T. Terry paid us by cheque $270 Bought postage stamps in cash $160 Bought office furniture for cheque $180 We paid L.Lucas by cheque $500 Received cheque for sale of goods $ 2,000
11 14 16 20 24 28 29 30 Withdrew $ 750 from the bank for business use. Paid wages in cash $ 230 Paid motor expenses by cheque $100 R. Numan paid us by cheque $920 Paid general expenses by cash $ 72 Paid insurance by cheque $54 Paid rent in cash $ 400 The owner took cash from the business by for his private use $ 100 Q. 4 Prepare a two-column cash book for the month of January 2001 from the following transactions: 2001 January 1 2 3 4 5 8 9 12 14 18 21 23 25 28 30 Balances brought down: Cash $ 4,200; Bank $1,200 Bought goods for cash $1,000 Bought furniture for cheque $1,200 Received cheque from Sameen $5,100 Received cash from Sannal $2,500 Cash sales $3,500 Cash purchases $2,800 Paid cash for stationery $180 Bought goods for cheque $1,400 Received commission in cash $250 Settled the account of Martin by cheque $1,800 Rita settled her account of $1,000 by cheque. Paid insurance in cash $ 250
Paid cash for office expenses $150 Paid wages to the workers $700 in cash
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31 31
Cash sales for the week $ 2,500 Withdrew cash from the business bank account for business use $1,700
Q. 5 From the following transactions, prepare the two column cash book for the month March 2003:2003 March 1 2 3 4 5 6 8 10 12 14 18 20 24 26 28 30 31 Balances b/d: Cash $ 1800 (Dr.) Bank $ 2100 (Dr)
of
Received cheque from Samoon $ 2100 Cash sales for the week $5200 Cash purchases $ 2200
Carriage inwards paid in cash $200 Rafi paid us cash $2000 for the settlement of his account We paid Sonu $3000 by cheque for the settlement of his account Deposited cash into the bank account $2000 Paid advertising expenses in cash $500 Paid cash for carriage outwards $150 Bought stationery by cheque $600 Bought goods by cheque $ 800 Received commission by cheque$1400 Paid rent of business building by cheque $1500 Paid salaries by cheque $ 2000 Withdrew cash from the business bank A/C for office use $3100 Cheque received for the sale of goods $3100
(2)The Three-Column Cash Book: The cash book for recording cash, bank (cheque) and discount transactions together. From this book cash balance, (balance of cash in hand), bank balance (balance of cash at bank or overdraft) total discount allowed and total discount received etc. can be found. Usually the discount columns are not balanced. But, the discount columns are totalled. The total of debit side discount column is considered as total discount total of credit side discount column is considered as total discount received. allowed and the Both the two-column cash book and the three-column cash book serve as journals and Ledgers
Assignment Questions: Select the correct answer: Q. 1 A cash discount will be entered in the (b) three column cash book
(a) two column cash book (c) petty cash book
(d) none of the above.
Q. 2 A trade discount will appear in the (a) two column cash book (c) petty cash book (b) three column cash book (d) none of the above.
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Q. 3
A trade discount will (b) (d) decrease the selling price none of the above.
(a) increase the selling price (c) increase the purchase price
Q. 4
Contra entries should affect
(a) both cash and bank columns on both sides. (b) both cash and Bank columns on the debit side. (c) both cash and bank columns on the credit side.
Q. 5 A discount received will appear on the (a) debit side of the Two-column cashbook (b) credit side of the Two-column cashbook (c) debit side of the Three-column cashbook (d) credit side of the Three-column cashbook Q. 6 A cash discount is allowed at the time of of cash or cheque. (b) Purchase (c) Receipt (d) Payments.
(d) none of the above.
(a) Sales
Q. 7
The left hand side of the three-column cashbook is called (b) receipts side (c) credit side (d) none of these
(a) payment side
Q. 8
The right hand side of the cash book is called (b) payment side (c) income side (d) none of these
(a) receipts side
Q. 9
The cash book is used for recording
(b) all cash payments & receipts only (c) all cash & cheques receipts only (d) all cash & cheques receipts and payments only. Q. 10 A trade discount is:-` (b) not recorded in the books of the business (d) none of these (a) recorded in the books (c) not deducted from the value of the goods Q. 11 Which of the following statements is correct?
(a) all cash receipts only
A cash discount is (a) (b) (c) (d) given to encourage people to settle their accounts within a stated time limit the name given to a discount to increase the number of customers. the name given to a discount for cash purchases given for cash or credit purchases.
Q. 12
Fill in the following with the most suitable terms
1) An asset sold for cash is recorded in the
book
2) In a three column cash book, the discount columns are 3) The total of the discount column in the debit side of a three column cash book is 4) The total of the discount column in the credit side of a three column cash book is 5) The cash book is both a and a 6) The cash account shows balance only.
8) A cash discount is a reduction allowed to encourage payment of cash. 9) A trade discount is the reduction from the of goods
7) The bank account may show or balance.
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10) All receipts and payments of cheques and cash are recorded in 11) The book for recording the receipts & payments of cash & cheques is known as -
Q.13 From the following transactions your are required to prepare a Three column cash book for the month of February 2006 2006 Feb 1 Feb 2 Feb 4 Feb 5 Feb 6 Feb 7 Feb 10 Feb 15 Feb 20 Feb 23 Feb 25 Feb 28 Cash balance (Dr) $ 20,000 and Bank balance (Dr) $ 50,000 Bought goods and paid by cheque $ 10,000 Cash sales $ 5,000
Bought goods from James $ 10,000 Sold goods to Raheem $ 7,000 Paid Wages by cash $ 500 Paid Electricity charges by cheque $ 1,000 Received cheque for $ 6,600 from Raheem in full settlement of his Paid James by cash for $ 9,500 in full settlement of his account. Paid salaries by cheque $ 5,000 Received commission in cash $ 2,000 Cash paid into Bank $ 3,000 account
Q. 14
From the following you are required to prepare a three column cash book
for the month of March 2003 2003 March 1 2 3 4 7 8 9 Balances brought down: Cash $21,00 (Dr).; Bank $1,200 (Cr.) Cash sales $2,700
Cash purchases $ 800 Settled the account of Mathews $ 1,800 by cheque Sold an old fixture for cash $1,900 Bought furniture for cheque $1,400 Reema settled her account of $2,400 by cheque after deducting cash discount $100 10 12 13 Received rent of building $1,000 in cash. Sold goods and received cheque $3,000 Issued a cheque to Mannya $1,800 for the full settlement of
her a/c of $1,900 15 Received a cheque from Sunitha $2,100 for the full settlement of
her a/c of $2,150 17 18 20 21 24 25 28 29 30 31 Cash purchases for the week $1,500 Paid travelling expenses in cash $150 Bought machinery for cheque $ 4,500 Paid cheque to Sumon $2,750 after deducting cash discount $ 150 Sold goods and received cheque $800 Received commission in cash $1,000 Paid electricity charges by cheque $500 Paid salaries for the month $2,000 in cash Sold goods and received cheque $4,100 Deposited cash in the bank account $2,500
Q. 15 Prepare a three column cash book from the following for the month of January 2003 January 1 Balances brought down: Cash $ 2,300 (Dr.); Bank $ 5,200 (Dr.)
2003
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2 The following paid their accounts by cheque, in each case deducting 5% cash discount: B. Binnu $ 4,000 C. Climate $3,000 3 4 Paid rent by cheque $1,000 J. Jackson lent us $1,400 by cheque N.North
6 We paid the following accounts by cheque in each case deducting cash discount 5%:$ 900; S.South $1,400 8 12 14 Paid Motor expenses in cash $ 250 W. West paid his account of $180 by cheque $170, deducting $ 10 cash discount. Paid wages in cash $270
18 19 21 24 27 28 29 30 31 Cash drawings from the business $280 Cash withdrawn from the bank for the business use $1,500 Cash sales for the week $1,500 Bought furniture for cheque $1,500 Received rent by cheque $180 Cash sales $1,650 Paid salaries $3,000 by cheque Paid rent $1,000 in cash and insurance $500 by cheque.
16 The following paid their accounts by cheque, in each case deducting 10% cash discount: C.Cinu $1,200; D.David $3,000 ; E. Ellis $ 2,000
Paid to P. Potter his account of $800 in cash $ 750 after deducting $50 as cash discount.
Q. 16
From the following information taken from the books of Peter Shewag, prepare a
three column cash book for the month of March 2001 and balance the cash book on that date: 01 March Balances brought forward from the previous month: Cash $23,000; Bank $11,000
02 March Received cash from the following in each case after deducting 10% cash discount: Ameen $6,000; Ahmed $5,000 05 March Received commission by cheque from Aishath $7,100 07 March Issued cheques to the following in each case after deducting 5% cash discount: Afzal $4,600; Shifana $6,400 09 March Paid cash to Faruhana $1,000 11 March Paid Power charges by cheque $200 15 March Bought one machinery for cash $3,000 17 March Received a cheque from Smith for $6,900 after deducting $2,100 as cash discount. 21 March Rent received by cheque $2,000 22 March Cash withdrawn from the bank $500 for the business use. 24 March Bought goods by cash $2,700 27 March Sold an old motor car for $3,000. Payment received in cash immediately. 28 March Paid wages in cash $250 29 March Telephone charges paid by cheque $300 30 March Cash deposited in the bank $2,500 31 March Issued a cheque to Babu for $9,000 after deducting $1,000.
Q.17 1 4 7 8 9
From the following, prepare the three column cash book for the month of January 2003: Balances B/d : Bank $ 5200 ; Cash $ 2800 Withdrew cash from bank account $ 3000 Bought goods by cash $ 1800
Sold goods and received cheque $ 2500 Paid cash for stationery $ 100 10 Paid carriage inwards by cheque $ 500
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11
Sold goods and received cash $ 5400 Ameer $1400:
11 The following paid us in cash having deducted cash discount 10% in each case C.Chand $ 2500 12 15 16 18 20 24 26 28 30 31 Wages paid in cash $ 1300 Cash sales deposited in the bank account $ 1800 Paid cheque to Babu $ 600 after deducting cash discount $ 30 Sajan paid his account of $ 1800 by cheque in full settlement for $1750 Samson paid into our bank account $ 1000 Paid salaries for the month by cheque $ 1600 Paid cheque to Anil $ 1300 in full settlement of his account of $ 1350 Paid cleaning charges $ 150 in cash.
Received commission in cash $ 1000 Cash sales for the week $ 3500 Q. 18 Prepare a three column cash book from the following transactions for the month of March 2003:
2003 March 1 2 2 4 6 8 9 11 13 16 Balances b/d: Cash $ 2400(Dr) ; Bank $ 400 (Cr) Paid cash to the petty cashier $168 Received cash from Samson $1800 for the settlement of his account of $1800 Cash sales deposited into bank $ 3800 Settled the account of Mark $2500, by cheque $ 2440 Bought goods by cheque $ 1000 Sold furniture by cash $ 500 Received commission by in cash$ 900 Paid stationery by cash $160
Reema settled her account of $ 1700 by cash $ 1650 after deducting cash discount. 18 21 23 24 Meenu settled her account by cheque $ 2500 after deducting cash discount Bought Machinery by cheque $ 4000 Cash sales for the week $1800 Settled the account of Adil by cheque $1250 after deducting cash discount $30 26 29 31 Reetha deposited cash directly in our bank account $ 700 Bank charges paid from the bank account $15 Cash sales deposited into bank account $ 2000
For recording the receipts and payments of cash and cheques only. It is considered as both a journal and a ledger. Cash Discount and Trade Discount: (A) Cash Discount: The term cash discount refers to the reduction or allowance given for quick payment in cash or by cheque. The cash discount can be discount allowed or discount received. (i) Discount allowed: A reduction given to customers (debtors) who pay their accounts within the time limit. Discount allowed is an expense for the business. (ii) Discount received: A reduction given to us by the suppliers (creditors) when we pay their accounts before the time allowed has elapsed. Discount received is an income for the business. (B) Trade Discount: Trade discount is the reduction allowed from the list price (selling price) of the goods. Trade discount is not recorded in the accounts but cash discounts are recorded in the accounts. (1) Two-Column Cash book: The cash book for recording cash and cheque transactions together is known as the two-column cash book . Contra Entry: A contra entry for cash book items is where both the debit and credit are shown in the cash book itself.
Format of the Two Column Cash Book Two Column Cash Book for the month of December 2002 Date Details $ Bank LF Cash
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$ $ $
Date Bank
Details
LF
Cash
(All receipts of cash and cheques)
(All payments of cash and cheques)
Assignment Questions: 1. A cash book shows a debit balance $ 50. What does this mean? A. There is cash in hand $ 50 B. Cash has been over spent by $ 50 C. Total cash paid out $ 50 D. Total cash received is less than $ 50 2. for A. C. We bought goods on credit from Charles. He was paid within prescribed time and he gave a reduction that. What does this reduction mean for us? Discount allowed B. Discount received Discount given D. Special discount
4. A trader maintains the two column cash book. Debit balance of bank column $ 1,000 Cheques deposited $ 200 Cheques drawn for cash $ 350 What is the balance of the bank column at the end? A. $ 1,150 B. $ 1,000 C. $ 850 D. $ 1,550 5. What does the discount column of the cash book record? A. Discounts for trade customers B. Discounts for prompt payment C. Discount for bulk buying D. Discount for suppliers 6. A cash book shows a debit balance $ 50. What does this mean? A. There is cash in hand $ 50 B. Cash has been over spent by $ 50 C. Total cash paid out $ 5 D. Total cash received is less than $ 50 7. for A. C.
3. Which of the books does consist a cash account and a bank account put together in to one book? A. Cash book B. Bank book C. Sales book D. Pass book
We bought goods on credit from Charles. He was paid within prescribed time and he gave a reduction that. What does this reduction mean for us? Discount allowed B. Discount received Discount given D. Special discount
8. Which of the books does consist a cash account and a bank account put together in to one book? A. Cash book B. Bank book C. Sales book D. Pass book 9. A trader maintains the two column cash book. Debit balance of bank column $ 1,000 Cheques deposited $ 200 Cheques drawn for cash $ 350 What is the balance of the bank column at the end? A. $ 1,150 B. $ 1,000 C. $ 850 D. $ 1,550
10. What does the discount column of the cash book record? A. Discounts for trade customers B. Discounts for prompt payment C. Discount for bulk buying D. Discount for suppliers LONG QUESTIONS: Q.1. Prepare a Two Column Cash Book for the month of December 2005 from the following transactions. 2005 Dec 1 Proprietor puts Capital into a bank account for the business $ 9,400 Dec 2 Received cheque from Boon $ 1,100 Dec 4 Cash Sales $ 1,200 Dec 6 Paid rent by cash $ 450 Dec 7 Deposited Cash into Bank $ 500 Dec 15 Cash Sales paid directly into the Bank $ 400 Dec 23 Paid cheque to S,wills $ 2,700 Dec 29 Withdrew cash from bank for business use $ 1,200 Dec 30 Paid wages in cash $ 1,100 Q.2. Prepare a Two column cash book for the month of January 2006 from the following transactions. 2006 Jan 1 Started business with Cash $ 10,000 and of Bank $ 15,000 Jan 3 Bought goods by cheque $ 3,000 Jan 5 Sold goods for cash $ 5,000 Jan 6 Paid Wages in cash $ 700 Jan 10 Paid for postage and stationery $ 300 in cash Jan 13 Bought goods from Jack for $ 3,000 Jan 15 Bought goods for Cash $ 5,000 Jan 18 Sold goods and received by cheque $ 7,000 Jan 20 Sold goods to Jim for $ 2,000 Jan 24 Paid Telephone charges by cheque $ 1,000 Jan 26 Cash deposited into bank $ 5,000 Jan 27 Withdrew from Bank $ 1,000 for personal use Jan 29 Cash sales $ 1,500 Jan 30 Withdrew cash from Bank business use $ 1,500
Q. 3 Write up a Two column cash book from the following for the month of November 2002. 2002 Nov. 1 Balances brought down from the last month: Cash $1,050 (Dr)Bank $2,100 (Cr) 3 Cash sales $ 600
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4 Took $1,200 from the cash till and deposited in the bank 5 T. Terry paid us by cheque $270 6 Bought postage stamps in cash $160 7 Bought office furniture for cheque $180 8 We paid L.Lucas by cheque $500 9 Received cheque for sale of goods $ 2,000 11 Withdrew $ 750 from the bank for business use. 14 Paid wages in cash $ 230 16 Paid motor expenses by cheque $100 20 R. Numan paid us by cheque $920 24 Paid general expenses by cash $ 72 28 Paid insurance by cheque $54 29 Paid rent in cash $ 400 30 The owner took cash from the business by for his private use $ 100 Q. 4 Prepare a two-column cash book for the month of January 2001 from the following 2001 January 1 Balances brought down: Cash $ 4,200; Bank $1,200 2 Bought goods for cash $1,000 3 Bought furniture for cheque $1,200 4 Received cheque from Sameen $5,100 5 Received cash from Sannal $2,500 8 Cash sales $3,500 9 Cash purchases $2,800 12 Paid cash for stationery $180 14 Bought goods for cheque $1,400 18 Received commission in cash $250 21 Settled the account of Martin by cheque $1,800 23 Rita settled her account of $1,000 by cheque. 25 Paid insurance in cash $ 250 28 Paid cash for office expenses $150 30 Paid wages to the workers $700 in cash 31 Cash sales for the week $ 2,500 31 Withdrew cash from the business bank account for business use $1,700 Q. 5 From the following transactions, prepare the two column cash book for the month 2003:2003 March 1 Balances b/d: Cash $ 1800 (Dr.) Bank $ 2100 (Dr) 2 Received cheque from Samoon $ 2100 3 Cash sales for the week $5200 4 Cash purchases $ 2200 5 Carriage inwards paid in cash $200 6 Rafi paid us cash $2000 for the settlement of his account 8 We paid Sonu $3000 by cheque for the settlement of his account 10 Deposited cash into the bank account $2000 12 Paid advertising expenses in cash $500 14 Paid cash for carriage outwards $150 18 Bought stationery by cheque $600 20 Bought goods by cheque $ 800 24 Received commission by cheque$1400 26 Paid rent of business building by cheque $1500 28 Paid salaries by cheque $ 2000 30 Withdrew cash from the business bank A/C for office use $3100 31 Cheque received for the sale of goods $3100
transactions:
of March
(2)The Three-Column Cash Book: The cash book for recording cash, bank (cheque) and discount transactions together. From this book cash balance, (balance of cash in hand), bank balance (balance of cash at bank or overdraft) total discount allowed and total discount received etc. can be found. Usually the discount columns are not balanced. But, the discount columns are totalled. The total of debit side discount column is considered as total discount allowed and the total of credit side discount column is considered as total discount received. Both the two-column cash book and the three-column cash book serve as journals and Ledgers Format of the Three-Column Cash Book Three Column Cash Book for the month of January 2002 Date Details LF Dis. Allow $ Bank $ Date Details LF Dis. Recd Cash $ Bank $ Cash
(All receipts of cash and cheques) (All payments of cash and cheques) Assignment Questions: Select the correct answer: Q. 1 A cash discount will be entered in the (a) two column cash book (b) three column cash book (c) petty cash book (d) none of the above.
Q. 2 A trade discount will appear in the (a) two column cash book (b) three column cash book (c) petty cash book (d) none of the above. Q. 3 A trade discount will (a) increase the selling price (b) decrease the selling price
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(c) increase the purchase price
(d)
none of the above.
Q. 4 Contra entries should affect (a) both cash and bank columns on both sides. (b) both cash and Bank columns on the debit side. (c) both cash and bank columns on the credit side. (d) none of the above. Q. 5 A discount received will appear on the (a) debit side of the Two-column cashbook (b) credit side of the Two-column cashbook (c) debit side of the Three-column cashbook (d) credit side of the Three-column cashbook Q. 6 A cash discount is allowed at the time of of cash or cheque. (a) Sales (b) Purchase (c) Receipt (d) Payments. Q. 7 The left hand side of the three-column cashbook is called (a) payment side (b) receipts side (c) credit side (d) none of these Q. 8 The right hand side of the cash book is called (a) receipts side (b) payment side (c) income side Q. 9 The cash book is used for recording (a) all cash receipts only (b) all cash payments & receipts only (c) all cash & cheques receipts only (d) all cash & cheques receipts and payments only. Q. 10 A trade discount is:-` (a) recorded in the books (b) not recorded in the books of the business (c) not deducted from the value of the goods (d) none of these Q. 11 Which of the following statements is correct? A cash discount is (a) given to encourage people to settle their accounts within a stated time limit (b) the name given to a discount to increase the number of customers. (c) the name given to a discount for cash purchases (d) given for cash or credit purchases. Q. 12 Fill in the following with the most suitable terms
(d) none of these
Q.13 From the following transactions your are required to prepare a Three column cash book for the month of February 2006 2006 Feb 1 Cash balance (Dr) $ 20,000 and Bank balance (Dr) $ 50,000 Feb 2 Bought goods and paid by cheque $ 10,000 Feb 4 Cash sales $ 5,000 Feb 5 Bought goods from James $ 10,000 Feb 6 Sold goods to Raheem $ 7,000 Feb 7 Paid Wages by cash $ 500 Feb 10 Paid Electricity charges by cheque $ 1,000 Feb 15 Received cheque for $ 6,600 from Raheem in full settlement of his account Feb 20 Paid James by cash for $ 9,500 in full settlement of his account. Feb 23 Paid salaries by cheque $ 5,000 Feb 25 Received commission in cash $ 2,000 Feb 28 Cash paid into Bank $ 3,000 Q. 14 From the following you are required to prepare a three column cash book for the month of March 2003 2003 March 1 Balances brought down: Cash $21,00 (Dr).; Bank $1,200 (Cr.) 2 Cash sales $2,700 3 Cash purchases $ 800 4 Settled the account of Mathews $ 1,800 by cheque 7 Sold an old fixture for cash $1,900 8 Bought furniture for cheque $1,400 9 Reema settled her account of $2,400 by cheque after deducting cash discount $100 10 Received rent of building $1,000 in cash. 12 Sold goods and received cheque $3,000 13 Issued a cheque to Mannya $1,800 for the full settlement of her a/c of $1,900 15 Received a cheque from Sunitha $2,100 for the full settlement of her a/c of $2,150 17 Cash purchases for the week $1,500
1) An asset sold for cash is recorded in the book 2) In a three column cash book, the discount columns are 3) The total of the discount column in the debit side of a three column cash book is 4) The total of the discount column in the credit side of a three column cash book is 5) The cash book is both a and a 6) The cash account shows balance only. 7) The bank account may show or balance. 8) A cash discount is a reduction allowed to encourage payment of cash. 9) A trade discount is the reduction from the of goods 10) All receipts and payments of cheques and cash are recorded in 11) The book for recording the receipts & payments of cash & cheques is known as -
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18 20 21 24 25 28 29 30 31
Paid travelling expenses in cash $150 Bought machinery for cheque $ 4,500 Paid cheque to Sumon $2,750 after deducting cash discount $ 150 Sold goods and received cheque $800 Received commission in cash $1,000 Paid electricity charges by cheque $500 Paid salaries for the month $2,000 in cash Sold goods and received cheque $4,100 Deposited cash in the bank account $2,500
Q. 15 Prepare a three column cash book from the following for the month of January 2003 2003 January 1 Balances brought down: Cash $ 2,300 (Dr.); Bank $ 5,200 (Dr.) 2 The following paid their accounts by cheque, in each case deducting 5% cash discount: B. Binnu $ 4,000 C. Climate $3,000 3 Paid rent by cheque $1,000 4 J. Jackson lent us $1,400 by cheque 6 We paid the following accounts by cheque in each case deducting cash discount 5%:N.North $ 900; S.South $1,400 8 Paid Motor expenses in cash $ 250 12 W. West paid his account of $180 by cheque $170, deducting $ 10 cash discount. 14 Paid wages in cash $270 16 The following paid their accounts by cheque, in each case deducting 10% cash discount: C.Cinu $1,200; D.David $3,000 ; E. Ellis $ 2,000 18 Cash drawings from the business $280 19 Cash withdrawn from the bank for the business use $1,500 21 Cash sales for the week $1,500 24 Paid to P. Potter his account of $800 in cash $ 750 after deducting $50 as cash discount. 27 Bought furniture for cheque $1,500 28 Received rent by cheque $180 29 Cash sales $1,650 30 Paid salaries $3,000 by cheque 31 Paid rent $1,000 in cash and insurance $500 by cheque. Q. 16 From the following information taken from the books of Peter Shewag, prepare a three column cash book for the month of March 2001 and balance the cash book on that date: 01 March Balances brought forward from the previous month: Cash $23,000; Bank $11,000 02 March Received cash from the following in each case after deducting 10% cash discount: Ameen $6,000; Ahmed $5,000 05 March Received commission by cheque from Aishath $7,100 07 March Issued cheques to the following in each case after deducting 5% cash discount: Afzal $4,600; Shifana $6,400 09 March Paid cash to Faruhana $1,000 11 March Paid Power charges by cheque $200 15 March Bought one machinery for cash $3,000 17 March Received a cheque from Smith for $6,900 after deducting $2,100 as cash discount. 21 March Rent received by cheque $2,000 22 March Cash withdrawn from the bank $500 for the business use. 24 March Bought goods by cash $2,700 27 March Sold an old motor car for $3,000. Payment received in cash immediately. 28 March Paid wages in cash $250 29 March Telephone charges paid by cheque $300 30 March Cash deposited in the bank $2,500 31 March Issued a cheque to Babu for $9,000 after deducting $1,000.
Q.17 From the following, prepare the three column cash book for the month of January 2003: 1 Balances B/d : Bank $ 5200 ; Cash $ 2800 4 Withdrew cash from bank account $ 3000 7 Bought goods by cash $ 1800 8 Sold goods and received cheque $ 2500 9 Paid cash for stationery $ 100 10 Paid carriage inwards by cheque $ 500 11 Sold goods and received cash $ 5400 11 The following paid us in cash having deducted cash discount 10% in each case Ameer $1400: C.Chand $ 2500 12 Wages paid in cash $ 1300 15 Cash sales deposited in the bank account $ 1800 16 Paid cheque to Babu $ 600 after deducting cash discount $ 30 18 Sajan paid his account of $ 1800 by cheque in full settlement for $1750 20 Samson paid into our bank account $ 1000 24 Paid salaries for the month by cheque $ 1600 26 Paid cheque to Anil $ 1300 in full settlement of his account of $ 1350 28 Paid cleaning charges $ 150 in cash. 30 Received commission in cash $ 1000 31 Cash sales for the week $ 3500 Q. 18 Prepare a three column cash book from the following transactions for the month of March 2003: 2003 March 1 Balances b/d: Cash $ 2400(Dr) ; Bank $ 400 (Cr) 2 Paid cash to the petty cashier $168 2 Received cash from Samson $1800 for the settlement of his account of $1800 4 Cash sales deposited into bank $ 3800
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6 Settled the account of Mark $2500, by cheque $ 2440 8 Bought goods by cheque $ 1000 9 Sold furniture by cash $ 500 11 Received commission by in cash$ 900 13 Paid stationery by cash $160 16 Reema settled her account of $ 1700 by cash $ 1650 after deducting cash discount. 18 Meenu settled her account by cheque $ 2500 after deducting cash discount 21 Bought Machinery by cheque $ 4000 23 Cash sales for the week $1800 24 Settled the account of Adil by cheque $1250 after deducting cash discount $30 26 Reetha deposited cash directly in our bank account $ 700 29 Bank charges paid from the bank account $15 31 Cash sales deposited into bank account $ 2000
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Cash Book - Principles of Accounting

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A. There is cash in hand $ 50 C. Total cash paid out $ 50