Chapter Seven- Maintaining the Cash Book

Question 1

Casting

Answer 1

An accounting term for adding up a column of figures

Question 2

Cheque

Answer 2

A customer’s written order to their bank to pay a specified sum to a particular bank account

Question 3

Cross Cast

Answer 3

Adding up the totals of a number of columns to check if they add back to the overall total

Question 4

Direct Debit

Answer 4

A method of making payments direct from the bank where payments are for variable amounts and/or varying time intervals

Question 5

Overdraft

Answer 5

A negative balance in the business’ bank account, similar to a short-term loan as the business owes the bank that money; however, the bank can request payment of that money at any time

Question 6

Primary Records

Answer 6

Receipts, invoices, remittances and other documents which are retained and used to update the cash book on a regular basis

Question 7

Standing Order

Answer 7

Method of making regular payments directly from the bank account of the customer to the bank account of the supplier

Question 8

Two-Column Cash Book

Answer 8

An analysed cash book containing cash and bank columns, plus analysis columns, including a VAT column