part of cash balance. Tutorial note Instead of debiting the total of each petty expense directly, a separate journal entry may also be made and then credited to petty cash account. The journal entries are: (a) For receiving petty cash: Petty cash A/c To Cash A/c (b) For expenses paid: Respective expense A/c To Petty cash A/c Student activity ) Interview a banker or invite a banker to your class to know the procedure for opening various types of bank accounts. ) Imagine you have got a cash gift of ` , .
Come up with a small business plan. [Example: creating birthday cards on your own and selling them, buying and selling stationery items, etc.] Prepare cash book using imaginary transactions relevant to your chosen business. Points to remember • Three column cash book contains columns for discount, cash and bank on either side. • Contra entry appears on both sides of a three column cash book.
A contra entry occurs when cash is withdrawn from the bank or cash is deposited into the bank. • A petty cash book is maintained to record small cash payments. Accountancy - Self-examination questions I Multiple choice questions Choose the correct answer . Cash book is a (a) Subsidiary book (b) Principal book (c) Journal proper (d) Both subsidiary book and principal book .
The cash book records (a) All cash receipts (b) All cash payments (c) Both (a) and(b) (d) All credit transactions . When a firm maintains a simple cash book, it need not maintain (a) Sales account in the ledger (b) Purchases account in the ledger (c) Capital account in the ledger (d) Cash account in the ledger . A cash book with discount, cash and bank column is called (a) Simple cash book (b) Double column cash book (c) Three column cash book (d) Petty cash book . In Triple column cash book, the balance of bank overdraft brought forward will appear in (a) Cash column debit side (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side