Page 2 -

FILL IN THE CORRECT WORDS

a. Cash book is a ……….. journal.
b. In Journal proper, only ……….. discount is recorded.
c. Return of goods purchased on credit to the suppliers will be entered in ………..
journal
d. Assets sold on credit are entered in ……….. Double column cash book records
transactions related to ……….. and ……….. Total of the debit side of cash book
is ……….. than the credit side Cash book does not record the ………..
transactions.
e. In double column cash book ……….. transactions are also recorded. Credit
balance shown by a bank column in cash book is ………..
2. The amount paid to the petty cashier at the beginning of a period is known as
……….. amount. In purchase book, goods purchased on ……….. are recorded.
3. State whether the following statements are True or False :
a. Journal is a book of secondary entry. (❌ False)
b. One debit account and more than one credit account in a entry is called
compound entry.
c. Assets sold on credit are entered in sales journal
d. Cash and credit purchases are entered in purchase Journal. Cash sales are
entered in sales journal.
e. Cash book records transactions relating to receipts and payments.
f. Ledger is a subsidiary book.
g. Petty cash book is a book having record of big payments.
h. Cash received is entered on the debit side of cash book.
i. Transaction recorded both on debit and credit side of cash book is known as
contra entry.
j. Balancing of account means total of debit and credit side.
k. Credit purchase of machine is entered in purchase journal.

SHORT ANSWER QUESTIONS
1. Briefly state how the cash book is both journal and a ledger.
2. What is the purpose of contra entry?
3. What are special purpose books?
4. What is petty cash book? How is it prepared?
5. Explain the meaning of posting of journal entries.
.
6. Define the purpose of maintaining subsidiary journal.
7. Write the difference between return Inwards and return outwards.
8. What did you understand by ledger folio?
9. What is the difference between Trade Discount and Cash Discount?
10. Write the process of preparing ledger from a journal.
11. What did you understand by Imprest amount in petty cash book?

Long Answer Questions

12. Explain the need for drawing up the special purpose books.
13. What is cashbook? Explain the types of cashbook.
14. What is contra entry? How can you deal this entry while preparing double column
cash book?
15. What is petty cash book? Write advantages of petty cash book.
16. Describe the advantages of sub-dividing the Journal.
17. What do you understand by balancing of account?