Essential Book Keeping - Qp6

10 Questions | Total Attempts: 49

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Essential Book Keeping - Qp6

Questions and Answers
  • 1. 
    A petty cash book will be kept to record small cash transactions and so on, with analysis kept in the petty cash book of what the cash was spent on.
    • A. 

      True

    • B. 

      False

  • 2. 
    Many businesses (particularly large businesses that use accounting software packages) will keep the cash book as an account within the general journal.
    • A. 

      True

    • B. 

      False

  • 3. 
    On a periodic basis, the petty cash book transactions are summarised and transferred to the accounts.
    • A. 

      True

    • B. 

      False

  • 4. 
    The ______ system is a simple system that can be used to ensure a business has enough petty cash on hand to meet its needs.
    • A. 

      Cash

    • B. 

      Imprest

    • C. 

      Petty cash

  • 5. 
    When dealing with cash, it is important to properly reconcile the amounts involved.
    • A. 

      True

    • B. 

      False

  • 6. 
    Cash flow is vitally important to all business and, as a result, most businesses are willing to offer a discount to customers for tardy payment.
    • A. 

      True

    • B. 

      False

  • 7. 
    ______  means that the company should look to the person who issued the cheque, in order to make amends to either the cheque itself.
    • A. 

      Refer to drawer

    • B. 

      No funds

    • C. 

      Please re-present

  • 8. 
    ______ are used by most people to pay household bills and so forth.
    • A. 

      Standing orders

    • B. 

      Direct debits

    • C. 

      Credit transfers

    • D. 

      BACS

    • E. 

      CHAPS

  • 9. 
    To reconcile your bank statement, proceed as follows: (Select three)
    • A. 

      Check the balance off your current statement.

    • B. 

      Tick off the entries on the statement against the corresponding entries in your cash book to see if everything has cleared.

    • C. 

      Add debits paid in but not shown on the statement.

    • D. 

      Check regular payments like standing orders and direct debits.

    • E. 

      The balance should equal the differences between your ‘bank in’ and ‘bank out’ columns of your analysed cash book, adjusted for any brought forward amount.

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