Page 48 - RECORDING OF TRANSACTIONS-NOTES

Recording of Transactions - II 141

(d) Cash book does not record transaction of :
(i) Cash nature
(ii) Credit nature
(iii) Cash and credit nature
(iv) None of these
(e) Total of these transactions is posted in purchase account :
(i) Purchase of furniture
(ii) Cash and credit purchase
(iii) Purchases return
(iv) Purchase of stationery
(f) The periodic total of sales return journal is posted to :
(i) Sales account
(ii) Goods account
(iii) Purchases return account
(iv) Sales return account
(g) Credit balance of bank account in cash book shows :
(i) Overdraft
(ii) Cash deposited in our bank
(iii) Cash withdrawn from bank
(iv) None of these
(h) The periodic total of purchases return journal is posted to :
(i) Purchase account
(ii) Profit and loss account
(iii) Purchase returns account
(iv) Furniture account
(i) Balancing of account means :
(i) Total of debit side
(ii) Total of credit side
(iii) Difference in total of debit & credit
(iv) None of these

4.7 Balancing the Accounts
Accounts in the ledger are periodically balanced, generally at the end of the accounting
period, with the object of ascertaining the net position of each amount. Balancing of
an account means that the two sides are totaled and the difference between them is
shown on the side, which is shorter in order to make their totals equal. The words
‘balance c/d’ are written against the amount of the difference between the two sides.
The amount of balance is brought (b/d) down in the next accounting period indicating
that it is a continuing account, till finally settled or closed.
In case the debit side exceeds the credit side, the difference is written on the
credit side, if the credit side exceeds the debit side, the difference between the two
appears on the debit side and is called debit and credit balance respectively. The

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