Mcqs on Cashbook
1. Which of the following is not a type of cashbook?
Correct Answer: d) Octuple column cashbook
Accounting recognizes Single, Double, Triple, and Petty cashbooks. “Octuple” (8 columns) is not a standard type.
Accounting recognizes Single, Double, Triple, and Petty cashbooks. “Octuple” (8 columns) is not a standard type.
2. In a double column cashbook, the first column is used for recording:
Correct Answer: a) Cash transactions only
In a double column cashbook, the two columns are typically Cash and Discount (or Cash and Bank). It tracks cash receipts/payments.
In a double column cashbook, the two columns are typically Cash and Discount (or Cash and Bank). It tracks cash receipts/payments.
3. The purpose of using a petty cashbook is to record:
Correct Answer: b) Small cash expenses
Petty cash is for minor expenses like stationery, tea, postage, etc., to avoid cluttering the main cashbook.
Petty cash is for minor expenses like stationery, tea, postage, etc., to avoid cluttering the main cashbook.
4. When a dishonored check is recorded in the cashbook, which account will be credited (in the cashbook)?
Correct Answer: a) Bank account
When you receive a check, you Debit Bank. If it bounces (dishonored), you must reverse it by Crediting the Bank column.
When you receive a check, you Debit Bank. If it bounces (dishonored), you must reverse it by Crediting the Bank column.
5. If the bank column of the cashbook shows a credit balance, it means:
Correct Answer: a) Bank overdraft
An asset account (Bank) normally has a Debit balance. A Credit balance indicates you owe the bank money (Overdraft).
An asset account (Bank) normally has a Debit balance. A Credit balance indicates you owe the bank money (Overdraft).
6. The cashbook balance is the same as the balance of which account?
Correct Answer: a) Cash account
The cash column in the cashbook serves the exact function of the Cash Account in the ledger.
The cash column in the cashbook serves the exact function of the Cash Account in the ledger.
7. What is recorded in the debit side of discount column of a cashbook?
Correct Answer: c) Cash discount allowed to debtors
The debit side discount column records discounts allowed to customers when they pay. The credit side records discounts received.
The debit side discount column records discounts allowed to customers when they pay. The credit side records discounts received.
8. When preparing a bank reconciliation starting from the Cash Book balance, outstanding checks are added to:
Correct Answer: c) Cash book balance
Outstanding checks have reduced the Cash Book balance but not the Bank yet. To reconcile (match the Bank Statement), you add them back to the Cash Book balance.
Outstanding checks have reduced the Cash Book balance but not the Bank yet. To reconcile (match the Bank Statement), you add them back to the Cash Book balance.
9. The purpose of using a triple column cashbook is to include an additional column for:
Correct Answer: c) Discount allowed and discount received
Triple Column = Cash + Bank + Discount.
Triple Column = Cash + Bank + Discount.
10. A contra entry is recorded in the cashbook when:
Correct Answer: c) Both a and b
A contra entry is any transaction involving both Cash and Bank accounts (deposit or withdrawal for office use).
A contra entry is any transaction involving both Cash and Bank accounts (deposit or withdrawal for office use).
11. The cashbook is a subsidiary book of accounts that records transactions related to:
Correct Answer: b) Cash and bank
It is dedicated solely to the movement of cash and bank funds.
It is dedicated solely to the movement of cash and bank funds.
12. What is the main purpose of a cashbook in accounting?
Correct Answer: a) To record all cash transactions
It functions as the book of original entry for all receipts and payments of money.
It functions as the book of original entry for all receipts and payments of money.
13. What type of cashbook is used to record cash transactions along with a discount column?
Correct Answer: b) Double column cashbook
Specifically, the “Cash and Discount” double column format.
Specifically, the “Cash and Discount” double column format.
14. Which of the following transactions would be recorded in the cashbook?
Correct Answer: c) Payment of rent in cash
Cashbooks only record cash/bank transactions. Credit purchases/sales and non-cash items like depreciation are excluded.
Cashbooks only record cash/bank transactions. Credit purchases/sales and non-cash items like depreciation are excluded.
15. What type of cashbook is used to record cash and bank transactions along with a discount column?
Correct Answer: c) Triple column cashbook
Triple = Cash, Bank, Discount.
Triple = Cash, Bank, Discount.
16. Which account will be debited when cash is withdrawn from the bank for office use?
Correct Answer: b) Cash account
Cash is coming INTO the business drawer (Debit what comes in), and Bank is the giver (Credit).
Cash is coming INTO the business drawer (Debit what comes in), and Bank is the giver (Credit).
17. If a check received from a debtor is dishonored, what will be the journal entry?
Correct Answer: c) Debit Debtors, Credit Bank
You must re-establish the debt (Debit Debtor) and reduce the bank balance (Credit Bank) because the check bounced.
You must re-establish the debt (Debit Debtor) and reduce the bank balance (Credit Bank) because the check bounced.
18. The balance shown in the Cash Column of the cashbook is:
Correct Answer: b) Always a debit balance
You cannot pay out more physical cash than you hold. Therefore, cash on hand is always an asset (Debit balance).
You cannot pay out more physical cash than you hold. Therefore, cash on hand is always an asset (Debit balance).
19. In a triple column cashbook, the two extra columns are used for:
Correct Answer: b) Bank and Discount
The three columns are: 1. Cash, 2. Bank, 3. Discount.
The three columns are: 1. Cash, 2. Bank, 3. Discount.
20. Which of the following accounts will be credited when cash is deposited into the bank?
Correct Answer: b) Cash account
Entry: Debit Bank (Receiver), Credit Cash (Goes out).
Entry: Debit Bank (Receiver), Credit Cash (Goes out).