Accounting 3 - Textbook Chapter 7

Question 1

What are cash receipts?

Answer 1

The amount of cash the business has received from other entities during a period and sources of cash

Question 2

What are cash payments?

Answer 2

The amount of cash the business has paid to other entities during a period and the uses of the cash

Question 3

What is bank balance?

Answer 3

The level of cash on hand at a particular point in time

Question 4

What is the relationship between a firm’s cash receipts, cash payments and its bank balance?

Answer 4

Cash receipts will increase the firm’s bank balance while cash payments will decrease that balance.

Question 5

What is a journal?

Answer 5

An accounting record that classifies and summaries transaction during a particular period (usually month)

Question 6

What is the Cash Receipts Journal?

Answer 6

Summarizes all cash received by the business (from other entities) during a particular reporting period

Question 7

What is Cash Payments Journal?

Answer 7

Summarises all cash paid by the business (to other entities) during a particular reporting period.