NCERT MOST IMPORTANT QUESTIONS CLASS – 11 | ACCOUNTANCY IMPORTANT QUESTIONS | CHAPTER –4 Recording of Transactions – II| EDUGROWN |

NCERT Most important Question:

Q1. Define day book in the process of recording transaction.

Ans: The day book contains all of the many types of transactions that are recorded in different books that are kept by the accountant.

Q2. Which special purpose book records all type of cash receipt and cash payment.

Ans: The cash book is a special purpose book that keeps track of all types of cash receipts and payments.

Q3. ______________is a subsidiary journal. Fill in the blank

Ans: Cash book is a subsidiary journal.

Q4. What type of transactions does double column cash book records?

Ans: Only cash and bank transactions are recorded in the double column cash book.

Q5. State the following statement is True or False :

a. More than one credit account and single debit account in an entry is known as compound entry.

Ans: The above statement is True. More than one credit  and single debit in an entry will have two credit accounts and one debit entry. This is called compound entry as it consists of more than two accounts.

b. Subsidiary book is also known as ledger.

Ans: The above statement is False, Subsidiary book is a part of ledger account.

c. Credit purchase of machinery is entered in purchase journal.

Ans: The above statement is False, As the purchase of machinery should be recorded in the journal proper account.

Q6. Discuss all types of special purpose book or day book.

Ans: The following are the special purpose books or special diaries that accountants keep:

• Purchase book
• Sales return book(Return inwards)
• Journal paper
• Purchase return book (Return outwards)
• Sales book
• Cash book

Q7. Differentiate between single and double column cash book.

Ans:  The difference between single column cash book and double column cash book are as follow:

Single Column Cash Book	Double Column Cash Book
Only one amount column is prepared.	Two columns are prepared.
Transactions are recorded in chronological order.	Transactions need not to be recorded in chronological manner.

Q8. Give names of four types of crossed cheques.

Ans: There are four different types of crossed checks:

i. Parallel crossed cheques

ii. Crossed cheques with company name

iii. Crossed cheques not negotiable

iv. Crossed cheques with bank name

Q9. What is a purchase book

Ans: It’s a book that keeps track of all transactions involving the purchase of goods or services, whether cash or credit. It records all the operations purchases along with the discounts received treatments from the suppliers.  

Q10. What is the need of contra entry?
Ans: Contra entry refers to a single transaction that is entered on both sides of the cash book. A contra entry is required to to offset receivables and payables between 2 non identical legal entities/subsidiary of a firm so that one final amount remains used in intercompany netting.

Q11.  Give the meaning of the following terms

i. Sales journal

Ans: Sales Journal: This is a journal that exclusively records credit sales.

ii. Purchase journal

Ans: Purchase Journal: This is a journal that solely records credit purchases

iii. Journal

Ans: Journal: A basic book in which all initial entry transactions are documented.

iv. Petty cash book

Ans: Petty cash book: This is a book that is used to keep track of small cash transactions.

Q12. What do you mean by single column cash book?

Ans: A single column cash book is a cash book that solely records a business’s cash transactions. It functions similarly to a typical cash account, with all cash receipts recorded on the left hand (debit) side and all cash payments recorded on the right hand (credit) side in chronological sequence. There is only one column. Cash is a debit and credit book with simply one column on each side. It solely keeps track of transactions involving cash receipt and payment. All transactions are recorded in the sequence in which they take place. The cash receipts are recorded on the debit side, while the cash payments are recorded on the credit side.

Q13. Give detailed explanation of the format of petty cash account.

Ans: Small transactions, such as postage, conveyance, cartage expenditures, and other expenses, are common in large corporations. Because all of these transactions are typically repetitious, the cashier is unable to record them in the main cash book. As a result, these transactions are kept in a separate book called the petty cash book.

Amount Received	Date	Particular	Voucher No.	Amount paid	Postage Charges	Conveyance Charges	Miscellaneous Charges

Q14. Describe the double-column transaction books

Ans: On both the debit and credit sides, the double column cash book (also known as two column cash book) includes two money columns – one for cash transactions and one for bank transactions. To put it another way, a single column cash book becomes a double column cash book when a bank column is added to both sides. The cash column records all cash transactions and acts as a cash account, while the bank column records all cheques receipts and payments and acts as a bank account. At the end of an appropriate time, which is generally one month, both columns are totalled and balanced like a regular T-account.

Q15. Describe three column cash book

Ans: On both the debit and credit sides of a three-column cash book, there are three columns of amounts. One column is for cash, another is for discounts, and a third is for bank transactions. Because the corporation uses a bank instead of cash, it has an additional column for bank transactions.

Q16. Enter the following transactions into cash book for the month of Jan 2018

i. Cash received from Ravi 4,000

ii. Rent Paid in cash 2,000

iii. Purchased goods from Mahesh for cash 6,000

iv. Sold goods for cash 9,000 

Ans : Cash book for the month of Jan 2018

Date	Particular	Amount	Date	Particular	Amount
i.	To Ravi	4,000	ii.	By Rent	2,000
iv.	To sales	9,000	iii.	By Purchase	6,000
			iii.	By Balance c/d	5,000
		13,000			13,000

Working Notes:

Journal entries

Date	Particular	Dr	Cr
i.	Cash A/c           Dr.	4,000
	To Ravi		4,000
	(being cash received from ravi)
ii.	Rent A/c           Dr.	2,000
	To Cash A/c		2,000
	(being rent paid on cash)
iii.	Purchase A/c       Dr.	6,000
	To Cash A/c		6,000
	(being purchased goods on cash from mahesh)
iv.	Cash A/c             Dr.	9,000
	To sale		9,000
	(being goods sold in cash)

Q17. What are the advantages of maintaining a petty cash book? 

Ans:  The following are some of the benefits of keeping a petty cash book:

i. The time of the chief cashier is spared because these small transactions are too enormous for a single cashier to handle, thus a petty cashier is hired.

ii. Because the task is split between the chief cashier and the petty cashier, both of them are responsible for the proper distribution of petty cash and big sums.

iii. It is easier to handle such tiny transactions separately if you keep a separate cash book for them. Bulkiness is avoided, and the situation is more managed.

iv. It simplifies the production of the main cash book by reducing the number of small cash transactions. 

v. It accurately and systematically tracks all of the business’s minor costs and gives information immediately when needed.

Q18. What do understand by petty cash book? 

Ans: Small transactions, such as postage, conveyance, cartage expenditures, and other expenses, are common in large corporations. Because all of these transactions are typically repetitious, the cashier is unable to record them in the main cash book. As a result, these transactions are kept in a separate book called the petty cash book.

As a result, the cashier keeps a petty cash book to keep track of these recurrent transactions in one area. Because the volume of small transactions is too much for a single cashier to handle, a petty cashier is hired.

Q19. What do you mean by balancing of cash book? 

Ans: All cash transactions relating to cash receipts and cash payments are recorded date-wise when they are recorded in cash books. When a cash book is kept, there is no need to open a separate cash book in the ledger. Because cash revenues cannot be less than cash payments, there is always a debit balance in the cash book.

The principal document for cash receipts is essentially a duplicate copy of the receipt that the cashier issues. Any invoice, bill, or other document used to make payments will be regarded as the source or principal document for documenting transactions.

Q20. Define the types of cash book. Explain 

Ans: There are four different kinds of cash books, They are explained below:

i. Single-column cash book: Each debit and credit side contains a single amount column.

ii. Double column cash book: On both the debit and credit sides, it has two columns of amounts.

iii. Three-column cash book: On both the debit and credit sides, it has three columns of amounts. One column is for cash, another is for discounts, and a third is for bank transactions.

iv. A nice cash book: Large corporations have a lot of little transactions. As a result, all little transactions are grouped together to produce a nice cash book.