Test Your Understanding · Q1
Q.
Test Your Understanding – II
1. Fill in the correct words:
| # | Statement |
|---|---|
| (a) | Cash book is a ______ journal. |
| (b) | In Journal proper, only ______ discount is recorded. |
| (c) | Return of goods purchased on credit to the suppliers will be entered in ______ Journal. |
| (d) | Assets sold on credit are entered in ______. |
| (e) | Double column cash book records transaction relating to ______ and ______. |
| (f) | Total of the debit side of cash book is ______ than the credit side. |
| (g) | Cash book does not record the ______ transactions. |
| (h) | In double column cash book ______ transactions are also recorded. |
| (i) | Credit balance shown by a bank column in cash book is ______. |
| (j) | The amount paid to the petty cashier at the beginning of a period is known as ______ amount. |
| (k) | In purchase book goods purchased on ______ are recorded. |
2. State whether the following statements are True or False:
| # | Statement |
|---|---|
| (a) | Journal is a book of secondary entry. |
| (b) | One debit account and more than one credit account in an entry is called compound entry. |
| (c) | Assets sold on credit are entered in sales journal. |
| (d) | Cash and credit purchases are entered in purchase journal. |
| (e) | Cash sales are entered in sales journal. |
| (f) | Cash book records transactions relating to receipts and payments. |
| (g) | Ledger is a subsidiary book. |
| (h) | Petty cash book is a book having record of big payments. |
| (i) | Cash received is entered on the debit side of cash book. |
| (j) | Transaction recorded both on debit and credit side of cash book is known as contra entry. |
| (k) | Balancing of account means total of debit and credit side. |
| (l) | Credit purchase of machine is entered in purchase journal. |
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Start your 14-day free trial to unlock the full solution →Fill-ins: (a) subsidiary, (b) cash, (c) purchases return, (d) journal proper, (e) cash and bank, (f) more, (g) credit, (h) bank, (i) overdraft, (j) imprest, (k) credit. True/False: (a) F, (b) T, (c) F, (d) F, (e) F, (f) T, (g) F, (h) F, (i) T, (j) T, (k) F, (l) F.
Part 1 — Fill in the correct words:
- (a) subsidiary — the cash book is a subsidiary (special purpose) journal for money transactions.
- (b) cash — the discount recorded through the journal proper is the cancellation of cash discount (e.g. on dishonour of a cheque); trade discount is never recorded.
- (c) purchases return — goods returned to suppliers go in the Purchases Return (Return Outward) journal.
- (d) journal proper — the credit sale of an asset (not trading goods) is recorded in the journal proper.
- (e) cash and bank — a double column cash book records both cash and bank transactions.
- (f) more — receipts cannot be less than payments, so the debit (receipts) side total is more than the credit side.
- (g) credit — the cash book records only money transactions, so purely credit transactions are excluded.
- (h) bank — the double column cash book also records bank transactions.
- (i) overdraft — a credit balance in the bank column means a bank overdraft.
- (j) imprest — the fixed advance given to the petty cashier is the imprest amount.
- (k) credit — the purchases book records only credit purchases of goods.
Part 2 — True or False:
- (a) False — the journal is a book of original (primary) entry; the ledger is the book of secondary entry.
- (b) True — one debit and more than one credit (or vice versa) is a compound entry.
- (c) False — an asset sold on credit is entered in the journal proper, not the sales journal.
- (d) False — the purchase journal records only credit purchases of goods; cash purchases go in the cash book.
- (e) False — cash sales are entered in the cash book, not the sales journal. …
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