Essential Book Keeping - Qp6

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By Jackson Matthews
J
Jackson Matthews
Community Contributor
Quizzes Created: 595 | Total Attempts: 682,368
Questions: 10 | Attempts: 108

SettingsSettingsSettings
Essential Book Keeping - Qp6 - Quiz

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

    Correct Answer
    A. True
    Explanation
    A petty cash book is indeed used to record small cash transactions and expenses. It helps in keeping track of how the cash is being spent and provides analysis of the expenses. By maintaining a petty cash book, organizations can ensure proper documentation and accountability for small cash transactions.

    Rate this question:

  • 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

    Correct Answer
    B. False
    Explanation
    The statement is false because businesses, especially large ones, typically maintain the cash book as a separate ledger or account outside of the general journal. The cash book is a specialized accounting record that tracks all cash transactions, including receipts and payments. It provides a detailed record of cash inflows and outflows, making it easier to reconcile and monitor cash balances. Keeping the cash book separate allows for better organization and accuracy in financial reporting.

    Rate this question:

  • 3. 

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

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because petty cash book transactions need to be summarized and transferred to the accounts periodically. This helps in maintaining accurate records and ensuring that all expenses are properly accounted for. By summarizing the transactions and transferring them to the accounts, the company can track and reconcile the petty cash expenses with the overall financial records.

    Rate this question:

  • 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

    Correct Answer
    B. Imprest
    Explanation
    The imprest system is a simple system that can be used to ensure a business has enough petty cash on hand to meet its needs. This system involves maintaining a fixed amount of cash in a separate account, which is replenished periodically to maintain the fixed amount. This helps in controlling and monitoring petty cash expenses, as well as ensuring that there is always enough cash available for small, day-to-day expenses.

    Rate this question:

  • 5. 

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

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Properly reconciling the amounts involved when dealing with cash is important to ensure accuracy and prevent discrepancies. This process involves comparing the cash transactions recorded in the books with the actual cash on hand, bank statements, and other relevant documents. By reconciling, any errors or discrepancies can be identified and corrected promptly, ensuring the accuracy of financial records and preventing fraud or mismanagement of funds.

    Rate this question:

  • 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

    Correct Answer
    B. False
    Explanation
    Cash flow is indeed important to all businesses, but it does not necessarily mean that most businesses are willing to offer a discount for tardy payment. In fact, most businesses prefer to receive payments on time to maintain a healthy cash flow. Offering discounts for late payments can actually have a negative impact on cash flow and overall profitability. Therefore, the statement is false.

    Rate this question:

  • 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

    Correct Answer
    A. Refer to drawer
    Explanation
    The term "Refer to drawer" means that the company should contact the person who issued the cheque in order to resolve any issues or make necessary corrections. It implies that there might be a problem with the cheque, such as insufficient funds or incorrect information, and the company should seek clarification or a new cheque from the drawer.

    Rate this question:

  • 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

    Correct Answer
    B. Direct debits
    Explanation
    Direct debits are used by most people to pay household bills and other expenses. Unlike standing orders or credit transfers, direct debits allow the payee to automatically collect funds from the payer's account on a regular basis. This makes it a convenient and popular method for recurring payments such as utility bills, mortgage payments, and subscriptions. BACS and CHAPS are also payment systems, but they are not specifically designed for household bill payments like direct debits are.

    Rate this question:

  • 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.

    Correct Answer(s)
    B. Tick off the entries on the statement against the corresponding entries in your cash book to see if everything has cleared.
    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.
    Explanation
    To reconcile your bank statement, you should first tick off the entries on the statement against the corresponding entries in your cash book to see if everything has cleared. This helps ensure that all transactions have been accounted for and match between the two records. Additionally, you should check regular payments like standing orders and direct debits to ensure they have been correctly recorded. Finally, the balance should equal the differences between your 'bank in' and 'bank out' columns of your analyzed cash book, adjusted for any brought forward amount. This helps calculate the accurate balance and identify any discrepancies.

    Rate this question:

Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.