Ch.# 5 Sub – Division Of Journal, Cash Book And Petty Cash Book Bank And Banking Transactions And Bank Reconciliation Statement

Chapter # 5		Sub – Division Of Journal, Cash Book And Petty Cash Book Bank And Banking Transactions And Bank Reconciliation Statement
Q.1:	What is return outward book?
Ans:	A book or original entry in which all Purchases return are recorded chronologically is called return outward book.
Q.2:	What is sales return book?
Ans:	A book of original entry in which all sales return are recorded according to date is called sales return book.
Q.3:	What is Bill receivable Book?
Ans:	A book or original entry in which all the Bills receivable from customers are recorded chronologically is called Bill receivable book.
Q.4:	What is Bill Payable Book?
Ans:	A book of original entry in which all the Bills Payable to creditors are recorded according to date is called Bill payable book.
Q.5:	Define debit note? Q
Ans:	When goods are returned or an allowance is claimed from the supplier’s on account of receipt of defective goods, an intimation is sent to them which is called debit note.
Q.6:	Define credit note?
Ans:	When goods returned by customers are accepted, a document is issued to acknowledge the allowance claimed from them, such document is called credit note.
Q.7:	Define Cash Book?
Ans:	A book of original entry in which all cash receipts and payments are recorded chronologically is called Cash Book. 1
Q.8:	Write any two characteristics of Cash Book?
Ans:	i)       Only cash transactions are recorded.  ii)    It serves for both journal and the ledger simultaneously.
Q.9:	What are the various kinds of Cash Book?
Ans:	i)       Single column Cash Book.  ii)    Double column Cash Book. iii)  Three column Cash Book.
Q.10:	What is meant by single column Cash Book?
Ans:	A Cash Book in which only cash receipts and payments are recorded called single column Cash Book.
Q.11:	Define double column Cash Book?
Ans:	A Cash Book in which cash as well as discount transactions are recorded is called double column Cash Book.
Q.12:	Define Three column Cash Book.
Ans:	A cash book in which cash, bank and discount transactions are recorded on each side in three columns separately is called three column cash book.
Q.13:	Define Petty Cash Book.
Ans:	The book in which petty items of expenses are recorded is called petty Cash Book.
Q.14:	Write any three systems of petty Cash?
Ans:	i)       Open system  ii)    Imprest system iii)  Fixed advance system.
Q.15:	What do you know about “Imprest system” of petty cash?
Ans:	A system in which total petty expenses for a particular period are estimated and that amount is issued by the chief cashier to the petty cashier called imprest system of petty cash.
Q.16:	What do you know about “Contra Entry”?
Ans:	A transaction in which cash and bank both accounts are involved which are recorded on both the sides of Cash Book is called Contra Entry.
Q.17:	Which discount is recorded in the cash book?
Ans:	Cash discount is recorded in the cash book.
Q.18:	Define Bank?
Ans:	“A financial institution which purchases and sells money, and transacts other financial business of like nature.”
Q.19:	Name major categories or functions of a bank?
Ans:	1)     Primary functions.  2)     Generally utility functions. 3)     Agency functions.
Q.20:	What are primary functions of bank?
Ans:	The primary functions of a bank are to borrow money and to lend money.
Q.21:	What do you know about agency function of a bank?
Ans:	Those activities in which a bank performs services as agent of their customers are called agency functions of a bank.
Q.22:	Define cheque?
Ans:	An unconditional order in writing, drawn by a customer on his bank, requesting it to pay on demand a certain sum of money, only to a person named in it or bearer of the cheque is called cheque.
Q.23:	Define pay-in-slip book?
Ans:	A book which is given by bank to its customer for depositing money into bank is called pay-in-slip book.
Q.24:	What is cross cheque?
Ans:	When two parallel lines are drawn, on the face of a cheque, it is denoted as cross cheque.
Q.25:	Give any three reasons of dishonored of cheque?
Ans:	i)       If there is insufficient amount in the customer account.  ii)    If there is expired cheque. iii)  If there is technical fault in cheque.
Q.26:	Define bank draft?
Ans:	A written order of a bank to a person (normally its own branch) pay a certain sum of money to a person in whose favour the draft has been issue3d.
Q.27:	Define postal order?
Ans:	A written order by one post office to another to pay a certain sum money to the person named in it.
Q.28:	Define cheque book?
Ans:	A book which is issued by bank to its customer containing number blank cheques for withdrawing of money for bank is called cheque book.
Q.29:	Define post – dated cheque?
Ans:	A cheque which bears a future date for withdrawl of money is called post – dated cheque.
Q.30:	What is bank current account?
Ans:	A bank account in which customer is allowed to deposit and withdraw money according to his desire is called current account.
Q.31:	Define bearer cheque?
Ans:	A cheque which is payable to any person who present it to bank.
Q.32:	What is anti-dated cheque?
Ans:	A cheque in which previous date is written for withdrawl of money.
Q.33:	Wha tis honoured cheque?
Ans:	A cheque which is met by bank is called honoured cheque.
Q.34:	What do you know about open system of petty cash?
Ans:	A system in which a cashier receives from the chief cashier a fixed sum of money for petty expenses after opening regular interval.
Q.35:	What is bank statement?
Ans:	A copy of customer account which is issued by a bank to its customer normally informing about his balance after regular interval.
Q.36:	Define “Bank reconciliation statement”?
Ans:	A statement which contains a complete and satisfactory detail of the differences in balances as per the Cash Book and Pass Book is called Bank reconciliation statement.
Q.37:	Write different methods of preparing the bank reconciliation statement.
Ans:	i)       Starting with cash book or pass book balance.  ii)    Through adjusted cash book. iii)  Corrected Method.
Q.38:	Write any three importance of Cash Book?
Ans:	i)       It shows the actual Bank Balance position.  ii)    It prevents misrepresentation in recording banking transaction. iii)  It helps in detecting any mistake in bank trasaction.
Q.39:	Define Pass Book?
Ans:	A copy of the customer account in the bank ledger is called Pass Book.
Q.40:	Write different causes of  disagreement between cash book and pass book?
Ans:	i)       Time difference  ii)    Transactions without informing about them to other party. iii)  Effors.
Q.41:	What do you mean by unpresented cheques?
Ans:	The cheques which have been issued to the creditors and credited in the bank column of the cashbook but have not present for payment to the bank are called unpresented cheques.
Q.42:	What do you mean by uncollected cheques?
Ans:	Cheques deposited in the bank but have not yet been collected by bank are called uncollected cheques.
Q.43:	What do you mean by uncollected cheques?
Ans:	A cheque which is retuned by the bank unpaid due to any reason called dishonoured cheque.
Q.44:	What is meant by favourable balance of cash book?
Ans:	Debit balance of cash book is called favourable balance.
Q.45:	What is meant by unfavourable balance of pass book?
Ans:	Debit balance of pass book is called unfavourable balance of book.
Q.46:	Write any two advantages of cash book?
Ans:	i)       Daily cash receipts and cash payments may be easily esecertained.  ii)    Any defalcation of money can be detected through verification of cash book.
Q.47:	Give sketch or format of single column cash book (simple cash book) or   standard form of sample cash book.
Ans:	Cash Book (Single Column)  Date Particulars V/N. L/F Amount Date Particulars V/N L/F Amount
Q.48:	Give sketch of double column Cash Book?
Ans:	Date Particulars V/N L/F Cash Disc Date Particulars V/N L/F Cash Disc
Q.49:	Give Sketch of three column cash book?
Ans:	Date Particulars V/N L/F Cash Bank Disc Date Particulars V/N L/F Cash Bank Disc
Q.50:	Write any two differences between cash book and cash account?
Ans:	Cash Book Cash Account 1)     It is a separate book in which cash  transactions are directly recorded. It is an account in a ledger in which  posting is made from journal. 2)     Narration is given in the cash book. Narration is not given in pass book.
Q.51:	Write any two differences between cash book and pass book.
Ans:	Cash Book Pass Book 1)     It is maintained by customer It is maintained by banker. 2)     Its debit balance shows cash at bank and credit balance shows bank overdraft. Its debit balance shows bank overdraft and credit balance shows cash at bank.