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Test: Cash Book - 1 - Commerce MCQ

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30 Questions MCQ Test - Test: Cash Book - 1

Test: Cash Book - 1 for Commerce 2025 is part of Commerce preparation. The Test: Cash Book - 1 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Cash Book - 1 MCQs are made for Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Cash Book - 1 below.

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Test: Cash Book - 1 - Question 1

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The Balance of Petty Cash is :

A.
An expense
B.
Revenue
C.
An asset
D.
Liability

Test: Cash Book - 1 - Question 2

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While balancing three column cash book, the discount columns are:

A.
Totaled but not adjusted
B.
Totaled and also adjusted
C.
Totaled but not balanced
D.
Balanced but not totaled

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Test: Cash Book - 1 - Question 3

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In petty cash Book, the system followed :

A.
Accrual System
B.
Imprest System
C.
Cash system
D.
None of these

Test: Cash Book - 1 - Question 4

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Imprest amount – Rs. 500. What will be the amount of re-imbursement if following expenses were incurred by the petty cashier during the month-Telephone =Rs. 150, Tiffin = Rs. 50, small Repairs = Rs. 30 general expenses = Rs. 100.

A.
300
B.
170
C.
330
D.
270

Detailed Solution for Test: Cash Book - 1 - Question 4

The correct option is C.

Imprest amount=500

Expenses=Telephone expenses+tiffin+small repairs +general expenses=150+50+30+100=330

Amount of reimbursement=Amount to be paid=₹300

Test: Cash Book - 1 - Question 5

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In three column Cash Book, when does contra entry occurs?

A.
Withdrawal of cash from bank
B.
Payment to creditors
C.
Withdrawal of cash from bank for personal use
D.
All of the above

Test: Cash Book - 1 - Question 6

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Small payments are recorded in a book called:

A.
Cash Book
B.
Small payments book
C.
Purchase book
D.
Petty cash book

Test: Cash Book - 1 - Question 7

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Postage stamps purchased for Rs. 30 by business. This transaction will be recorded in:

A.
Purchase book
B.
Cash Book
C.
Petty Cash Book
D.
Journal

Test: Cash Book - 1 - Question 8

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What rate of commission is charged by the bank issuing the credit card :

A.
1% to 3%
B.
3% to 6%
C.
2% to 5%
D.
1% to 4%

Test: Cash Book - 1 - Question 9

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Cash book is a form of :

A.
Trial Balance
B.
Ledger
C.
Journal
D.
All of the above

Test: Cash Book - 1 - Question 10

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The Cash Book records

A.
All cash payments
B.
All cash payments
C.
All cash receipts and payments
D.
Cash and credit sale of goods.

Test: Cash Book - 1 - Question 11

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Cash book is a type of _______ but treated as a ________ of accounts.

A.
Subsidiary book, principal book
B.
Principal book, subsidiary book
C.
Subsidiary book, Subsidiary book
D.
Principal book, Principal book

Test: Cash Book - 1 - Question 12

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Salaries due for the month of March will appear

A.
On the receipt side of the cash book
B.
On the payment side of the cash book
C.
As a contra entry
D.
Nowhere in the cash book

Test: Cash Book - 1 - Question 13

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The total of discounts column on the debit side of the cash book, recording cash discount deducted by customers when paying their accounts, is posted to the

A.
Credit of the discount allowed account.
B.
Debit of the discount received account.
C.
Credit of the discount received account
D.
Debit of the discount allowed account.

Test: Cash Book - 1 - Question 14

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Rent due for the month of March will appear _________of the cash book.

A.
On the receipt side
B.
On the payment side
C.
As a Contra Entry
D.
Nowhere

Test: Cash Book - 1 - Question 15

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Cheques received but deposited on the next day are recorded in :

A.
Cash column of the cash book
B.
Bank column of the cash book
C.
Both of these
D.
None of these

Detailed Solution for Test: Cash Book - 1 - Question 15

It is treated as cash received on the date of receipt and recorded in the cash column on receipts side. When the cheque is deposited the entry for deposit will be passed on the day of depositing the cheque into bank.

Test: Cash Book - 1 - Question 16

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If the debit and credit aspects of a transaction are recorded in the cash Book it is a :

A.
Contra entry
B.
Simple entry
C.
Double entry
D.
Single entry

Test: Cash Book - 1 - Question 17

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What will be journal entry when cash is withdrawn from bank for personal use ?

A.
Drawings A/C debit, Bank A/C credit
B.
Cash A/C debit, Bank A/C credit
C.
Bank A/C debit. Drawings A/C credit
D.
Bank A/C debit, Capital A/C credit

Test: Cash Book - 1 - Question 18

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Double entry in Cash Book is completed when :

A.
Salaries are paid by cheque
B.
Withdrawal of money from bank for personal use
C.
Deposited cash into bank
D.
None of these

Test: Cash Book - 1 - Question 19

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If Ram has sold goods for cash, the entry will be recorded

A.
In the Cash Book
B.
In the Sales Book
C.
In the Journal
D.
In the Inventory Book

Test: Cash Book - 1 - Question 20

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Petty cash may be used to pay

A.
The expenses relating to postage and conveyance.
B.
Salary to administrative staff
C.
For the purchase of furniture and fixtures
D.
For the purchase of raw material.

Test: Cash Book - 1 - Question 21

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Which of the following is the kind of a cash book?

A.
Simple column cash book
B.
Double-column cash book
C.
Three-column cash book
D.
All of the above

Test: Cash Book - 1 - Question 22

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A Cash Book always shows which type of balance?

A.
Debit balance
B.
Credit balance
C.
Both Debit or Credit balance
D.
None of the above

Detailed Solution for Test: Cash Book - 1 - Question 22

Cash Book records all cash transactions. Cash (asset) can never be negative; therefore, it always shows a debit balance (cash in hand). If the book shows zero balance, it means no cash is available. A credit balance in cash column is not possible, though in bank column (in case of overdraft) credit balance may appear.

Test: Cash Book - 1 - Question 23

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Imprest received of Rs. 100 was recorded as interest paid. What will be the effect on cash balance?

A.
Cash will reduce by 100.
B.
Cash will increase by 200
C.
Cash will reduce by 200.
D.
No effect on cash balance.

Detailed Solution for Test: Cash Book - 1 - Question 23

Description: Correct Entry:
Cash A/c Dr. 100
To Interest A/c 100
( Being interest received)
Wrong Entry:
Interest A/c Dr. 100
To Cash A/c 100
( Being interest paid)
The effect of the above wrong entry will be that cash balance will be reduced by Rs. 200.

Test: Cash Book - 1 - Question 24

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Which of the following is not a feature of Cash Book?

A.
It records only cash transactions
B.
It serves as both journal and ledger
C.
It shows both cash and bank balances
D.
It cannot record contra entries

Detailed Solution for Test: Cash Book - 1 - Question 24

Cash Book is a special journal as well as a ledger. It records all cash transactions directly, showing cash and bank balances. Contra entries (like cash deposited into bank or withdrawn from bank) are also recorded in Double or Triple Column Cash Book, so option (d) is incorrect.

Test: Cash Book - 1 - Question 25

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Contra entries are passed only when

A.
Double-column cash book is prepared
B.
Three-column cash book is prepared
C.
Simple cash book is prepared
D.
None of the above

Detailed Solution for Test: Cash Book - 1 - Question 25

Contra entries involve both cash and bank transactions within the same entity.
These can only be recorded when both cash and bank columns are available in the cash book.
A Three-column cash book has:
- Cash column
- Bank column
- Discount column
Since it includes both cash and bank, contra entries are passed only in this type of cash book.

Test: Cash Book - 1 - Question 26

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Which side of the Cash Book is used to record payments made in cash?

A.
Debit side
B.
Credit side
C.
Both sides
D.
None of the above

Detailed Solution for Test: Cash Book - 1 - Question 26

In Cash Book, the Debit side represents receipts (cash inflows), and the Credit side represents payments (cash outflows). Hence, all payments are recorded on the Credit side of the Cash Book.

Test: Cash Book - 1 - Question 27

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Which of the following is not a column of a three-column cash book?

A.
Cash column
B.
Bank column
C.
Petty cash column
D.
Discount column

Test: Cash Book - 1 - Question 28

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If cash ₹10,000 is deposited into the bank, how will it be recorded in a Double Column Cash Book?

A.
Debit Cash ₹10,000, Credit Bank ₹10,000
B.
Debit Bank ₹10,000, Credit Cash ₹10,000
C.
Debit Cash ₹10,000, Credit Capital ₹10,000
D.
Debit Bank ₹10,000, Credit Capital ₹10,000

Detailed Solution for Test: Cash Book - 1 - Question 28

Deposit into bank means cash decreases and bank balance increases. In Double Column Cash Book, a contra entry (C) is passed:

Bank A/c (Dr.) – on the Debit side
Cash A/c (Cr.) – on the Credit side

Test: Cash Book - 1 - Question 29

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In a Triple Column Cash Book, which of the following is not a column maintained?

A.
Cash column
B.
Bank column
C.
Discount column
D.
Purchases column

Detailed Solution for Test: Cash Book - 1 - Question 29

A Triple Column Cash Book has three columns on each side:

Cash
Bank
Discount

Purchases are recorded in Purchases Account and not in Cash Book.

Test: Cash Book - 1 - Question 30

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Balance as per Cash Book (Bank column) and Balance as per Pass Book may differ because of:

A.
Cheques deposited but not yet cleared
B.
Cheques issued but not presented
C.
Bank charges recorded by bank but not in Cash Book
D.
All of the above

Detailed Solution for Test: Cash Book - 1 - Question 30

Differences arise due to timing and recording differences:

Cheques deposited but not cleared → increases balance in Cash Book but not in Pass Book.
Cheques issued but not presented → decreases balance in Cash Book but not yet in Pass Book.
Bank charges → recorded by bank but not entered in Cash Book unless updated.

Hence, all options are correct.

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