MAINTENANCE OF Cash And SUBSIDIARY BOOKS AND LEDGER
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One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is a Cash Book and how does it differ from a regular ledger account?
A Cash Book is a subsidiary book that records all cash receipts and payments; it serves the dual purpose of a journal and a ledger, so no separate cash account is maintained in the ledger.
What is the primary book of original entry where daily cash transactions are recorded?
Cash Book serves as the primary book of original entry.
What are the three types of Cash Books commonly maintained by banks and businesses?
The three types are the Single Column (Simple) Cash Book recording only cash transactions, the Double Column Cash Book recording both cash and bank transactions, and the Triple Column Cash Book adding a discount column to the double column format.
What is a Single Column Cash Book and what does it record?
Records only cash transactions in a single amount column.
What is the Petty Cash Book and what purpose does it serve in an organization?
The Petty Cash Book records small, recurring day-to-day expenses such as postage, stationery, and conveyance; it reduces the burden on the main cashier by delegating minor payments to a petty cashier.
What is a Double Column Cash Book and what two aspects does it record?
Records both cash transactions and bank transactions together.
What is the Imprest System in the context of Petty Cash management?
Under the Imprest System, a fixed amount (imprest amount) is given to the petty cashier at the start of each period, and at the end of the period the exact amount spent is reimbursed to restore the balance to the original imprest level.
Which side of the Cash Book records all receipts and incoming cash?
The debit side (left side) records all receipts.
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