Accounting - Study Mode
[#181] Cash book records
Correct Answer
(C) Cash payments and cash receipts
Explanation
Solution: Cash book records Cash payments and cash receipts. A Cash Book is a type of subsidiary book where cash (or) bank receipts and cash (or) bank payments made during a period are recorded in a chronological order.
[#182] Cash discount is allowed on ______ repayment of debt
Correct Answer
(B) Prompt
Explanation
Solution: A cash discount is a reduction in the invoice amount granted by the seller to the buyer as an incentive for early payment. This type of discount encourages buyers to pay their bills promptly to receive the discount. Lump sum , Actual , and None of them are incorrect because they do not correctly describe the condition under which a cash discount is typically allowed. Therefore, the correct answer is Prompt .
[#183] Cash book is prepared by
Correct Answer
(B) Accountant of business
Explanation
Solution: Cash book is prepared by Accountant of business. A cash book is set up as a ledger in which all cash transactions are recorded according to date. It is a book of original entry and final entry.
[#184] The most common imprest system is the ______ system
Correct Answer
(A) Petty cash
Explanation
Solution: The most common imprest system is the Petty cash system. The base characteristic of an imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished.
[#185] Discount received is recorded on which of the following side of a cash book?
Correct Answer
(B) Payments
Explanation
Solution: Discount received is recorded on the payments side of a cash book because it represents a reduction in the amount payable to creditors. In accounting , a business may receive a discount from suppliers when making early payments or bulk purchases. This discount received reduces the cash outflow and is considered an income for the business, but it is recorded on the payments side of the cash book. Example: Suppose a business purchases goods worth ₹10,000 on credit from a supplier. The supplier offers a ₹1,000 discount for early payment. The business will pay only ₹9,000 instead of ₹10,000. Cash Book Entry: ₹9,000 will be recorded as an actual payment to the supplier. ₹1,000 (Discount Received) will be recorded separately on the payments side to adjust the total liability. Why Not Other Options? Receipts: Used for recording cash inflows (money received), but discount received is not a cash receipt. Income: Though discount received is an income, it is not recorded in the income section of the cash book. Instead, it appears as a reduction in payment. Expenditure: This includes expenses paid, whereas discount received reduces expenditure rather than increasing it. Thus, Discount Received is correctly recorded on the Payments side of the cash book.