Chapter 8: Cash Book

Question 1

How does the cash book record the money transactions of the business?

Answer 1

In the form of Bank Receipts & Payments

Question 2

What is recorded on the Debit Side?

Answer 2

Receipts are recorded on the Debit side.

Question 3

What is recorded on the Credit side?

Answer 3

Payments are recorded on the Credit side.

Question 4

What is the common form for a cash book?

Answer 4

3 column cash book

1. Bank
2. VAT
3. Settlement Discount

Question 5

What may a cash book combine the roles of?

Answer 5

1. Book of prime entry for bank receipts & payments

2. Double entry account for bank.

Question 6

When the cash book is used only as a book of prime entry, what can be used too complete double-entry book keeping?

Answer 6

A bank control account is used in General Ledger to complete double entry book keeping.

Question 7

What is the total of the discount allowed column, transferred to the double-entry system as?

Answer 7

• Debit Discount Allowed Account

- Credit Sales Ledger Control Account.

Question 8

What is the total of the discount received column, transferred to the double-entry system as?

Answer 8

• Debit purchases ledger control account

- Credit discount received account.

Question 9

What is the total of the VAT columns in the cash book, transferred to the double-entry system as?

Answer 9

DEBIT VAT Account:
-Total of the cash book CREDIT side VAT Column

CREDIT VAT Account:
-Total of the cash book DEBIT side VAT Column