Chapter recording-of-transactions-ii: Recording of Transactions - II Short Questions | accountancy Class 11 CBSE

Chapter recording-of-transactions-ii: Recording of Transactions - II Short Questions | accountancy Class 11 CBSE | ByteNotes.in

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Question 1

Quick Recall

What is a cash book and why is it called the book of original entry?

A cash book records all cash receipts and cash payments of a business in chronological order.
It serves the dual purpose of both a journal (book of original entry) and a ledger (cash account), eliminating the need for a separate cash account in the ledger.
Since transactions are recorded here first before any other processing, it qualifies as the book of original entry.

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Question 2

Quick Recall

Why are special purpose books maintained instead of recording all transactions in one journal?

As business expands, the volume of transactions increases, making a single journal cumbersome and inefficient to maintain.
Special purpose books allow classification of similar transactions together, enabling quick and accurate recording.
They make possible the division of labour in accounting work, saving time and reducing the chance of errors.

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Medium

Question 3

Quick Recall

What is a contra entry in the double column cash book? Give an example.

A contra entry is one where both the debit and credit aspects of a transaction appear within the cash book itself, without any corresponding ledger posting.
The letter 'C' is written in the L.F. column to indicate that no ledger posting is required for that entry.
Example: When cash is deposited into the bank, the bank column on the debit side and the cash column on the credit side are both affected — this is a contra entry.

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Question 4

Quick Recall

Distinguish between a bearer cheque and an order cheque.

A bearer cheque is payable to the person who physically holds and presents it; it can be transferred by mere delivery.
An order cheque is payable only to the named person or as per his instructions after proper identification; the word 'bearer' is struck off.
An order cheque is transferred by endorsement (signing instructions on the back of the cheque) and delivery, making it more secure than a bearer cheque.

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Question 5

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What is the Imprest System of petty cash? How does it ensure control?

Under the Imprest System, a fixed sum called the imprest amount is given to the petty cashier at the beginning of each period.
The petty cashier makes small payments from this amount and is reimbursed exactly the amount spent by the head cashier at the end of the period.
This ensures that the petty cashier always starts with the same amount, making it easy to verify and control petty disbursements.

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Question 6

Quick Recall

Which transactions are recorded in the purchases (journal) book?

Only credit purchases of goods meant for resale (merchandise) are recorded in the purchases book.
Cash purchases are excluded and are recorded in the cash book; credit purchases of assets are recorded in the journal proper.
The source document for entries in the purchases book is the invoice or bill received from the supplier.

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Question 7

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What is a debit note? When is it prepared?

A debit note is a document prepared by the buyer and sent to the supplier to formally record the return of goods or claim an additional amount.
It contains the name of the supplier, details and value of goods returned, and the reason for return; each debit note is serially numbered and dated.
It serves as the source document for recording entries in the purchases return book.

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Question 8

Quick Recall

What is a credit note? How does it differ from a debit note?

A credit note is prepared by the seller and sent to the customer when goods are returned by the customer, crediting the customer's account.
Unlike a debit note (which is prepared by the buyer to debit the supplier), a credit note is prepared by the seller; it is conventionally written in red ink.
It serves as the source document for entries in the sales return book.

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Question 9

Quick Recall

How is the single column cash book balanced?

All cash receipts are recorded on the debit side and all cash payments on the credit side; at period end, both sides are totaled.
The difference between the debit total and the credit total represents the cash balance in hand and is written on the credit side as 'Balance c/d'.
The cash book always carries a debit balance because cash payments can never exceed the total of opening cash balance and cash received during the period.

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Question 10

Quick Recall

What is a crossed cheque? State any two types of crossing.

A crossed cheque has two parallel lines drawn across its face, indicating that payment cannot be made directly over the counter and must be routed through a bank account.
General crossing: two parallel lines drawn across the cheque, possibly with the words 'and company' or 'not negotiable' between them.
Account payee crossing (A/c Payee Only): restricts the payment strictly to the bank account of the named person, making it the safest form of crossing.

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Question 11

Quick Recall

How is a dishonoured cheque recorded in the double column cash book?

When a cheque received from a customer is dishonoured, the bank returns it unpaid and debits the firm's account.
On receiving the dishonoured cheque or bank intimation, the firm records an entry on the credit side (payment side) of the cash book in the bank column with the customer's name in particulars.
This entry reverses the earlier entry made when the cheque was deposited, restoring the position to before the cheque was received.

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Question 12

Quick Recall

Why is trade discount not recorded in the purchases or sales book?

Trade discount is a reduction in the listed price offered by the seller to the buyer as a business practice and is not considered a financial transaction.
In the purchases and sales books, only the net amount (after deducting trade discount) is recorded, as that is the actual agreed price.
Cash discount, on the other hand, is a financial incentive for prompt payment and is recorded separately in the books of account.

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Question 13

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What is a pay-in-slip? What is its significance?

A pay-in-slip is a form that must be filled when depositing cash or cheques into a bank account.
It contains a counterfoil that is returned to the depositor with the cashier's signature, serving as an acknowledgement of the deposit.
It is the source document confirming that cash or a cheque has been deposited in the bank, used for recording the entry in the bank column of the cash book.

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Chapter sections

Chapter recording-of-transactions-ii: Recording of Transactions - II | Short Questions

What is a cash book and why is it called the book of original entry?

Why are special purpose books maintained instead of recording all transactions in one journal?

What is a contra entry in the double column cash book? Give an example.

Distinguish between a bearer cheque and an order cheque.

What is the Imprest System of petty cash? How does it ensure control?

Which transactions are recorded in the purchases (journal) book?

What is a debit note? When is it prepared?

What is a credit note? How does it differ from a debit note?

How is the single column cash book balanced?

What is a crossed cheque? State any two types of crossing.

How is a dishonoured cheque recorded in the double column cash book?

Why is trade discount not recorded in the purchases or sales book?

What is a pay-in-slip? What is its significance?

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