Chapter 8: Maintaining the cash book

Question 1

What does a two-column cash book include?

Answer 1

a cash column and a bank column on each side, and analysis columns

Question 2

Why do businesses use a two-column cash book?

Answer 2

Enables them to fully record all transactions involving cash or the bank account.

Question 3

What is written up on the debit side of the cash book?

Answer 3

Cheques and cash received plus automated receipts

Question 4

What is written up on the credit side of the cash book?

Answer 4

Cheques and cash paid, and from the list of automated payments, including standing order and direct debit payments

Question 5

How can the cash and bank balances be found?

Answer 5

By subtracting the total credits for cash and bank from the total debits for cash or bank

Question 6

What are the two main columns in the cash book?

Answer 6

Cash

Bank

Question 7

What is the cash column for?

Answer 7

Cash amount of money received or paid in cash

Question 8

What is the Bank column?

Answer 8

Amount of money paid or received through the bank (cheques)

Question 9

What is the trade receivables column used for?

Answer 9

the gross receipts from credit customers

Question 10

What are the two main types of document used to update the cash book?

Answer 10

Receipts

Payments

Question 11

Examples of receipts

Answer 11

Cash receipts
Paying-in slips
Remittance advice notes
Receipts listing

Question 12

Examples of Payments

Answer 12

Cheque book stubs 
Direct debit schedule 
Standing Order Schedule 
Remittance Advice Notes
Payments Listing