CHAPTER 8.1 cash in hand & cash at bank

Question 1

define bank overdraft

Answer 1

bank overdraft is the amount owed by the business to the bank for overdrawing from on its account balance in the bank account

Question 2

define cash at bank

Answer 2

cash at bank is the cash deposited with the bank

Question 3

define cash in hand

Answer 3

cash in hand is the physical cash kept by the business in the safe or register

Question 4

when does cheque get dishonoured

Answer 4

payer’s bank has insufficient amount/frozen account/ closed account

Question 5

state the 4 reasons for dishonoured cheque

Answer 5

1)information on the cheque is inconsistent
2)the cheque is post dated
3)the cheque has expired
4) the cheque is incomplete

Question 6

explain why a cheque is dishonoured due to incomplete information

Answer 6

a cheque is dishonoured die to incomplete information as there is no date/ amount being paid or signature

Question 7

explain why a cheque is dishonoured when the cheque is expired

Answer 7

a cheque is dishonoured when its expired as it is dated more then 6 months ago and is no longer valid

Question 8

explain why a cheque is dishonoured when its post dated

Answer 8

a cheque is dishonoured when its post dated as the date on the cheque is a future date

Question 9

explain why a cheque is dishonoured when the information on the cheque is inconsistent

Answer 9

a cheque is dishonoured when the information on the cheque is inconsistent as the amount in numbers is different from the amount of words and when the siganture on the cheque is different from the banks version