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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
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Salaries due for the month of March will appeara)on the receipt side o...
It in an outstanding expense hence liability of the firm,it will appear on liabilities side of balance sheet,and debit side on p&l account,but nowhere in cash book,as it is not a cash transaction
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Salaries due for the month of March will appeara)on the receipt side o...
Explanation:
Salaries due for the month of March will not appear in the cash book because the cash book only records cash and bank transactions. Salaries are typically paid by check or through electronic transfers, thus they do not involve cash transactions.
Reasons:
- The cash book is a subsidiary book that records all cash and bank transactions of a business.
- It consists of two sides: the receipt side and the payment side.
- The receipt side records all cash and bank receipts, while the payment side records all cash and bank payments.
- Salaries are typically paid to employees through checks or electronic transfers, which are not considered as cash transactions.
- Therefore, salaries do not appear in the cash book.
Contra Entry:
A contra entry is a bookkeeping entry that involves both a debit and a credit entry that nullify each other out. It is used to record transactions that involve the transfer of funds between two accounts within the same entity.
In the context of the question, salaries due for the month of March would not be considered a contra entry because it does not involve the transfer of funds between two accounts within the same entity. Instead, it is a payment made to employees for their services rendered.
Therefore, the correct answer is option 'D' - salaries due for the month of March will not appear in the cash book.
Salaries due for the month of March will not appear in the cash book because the cash book only records cash and bank transactions. Salaries are typically paid by check or through electronic transfers, thus they do not involve cash transactions.
Reasons:
- The cash book is a subsidiary book that records all cash and bank transactions of a business.
- It consists of two sides: the receipt side and the payment side.
- The receipt side records all cash and bank receipts, while the payment side records all cash and bank payments.
- Salaries are typically paid to employees through checks or electronic transfers, which are not considered as cash transactions.
- Therefore, salaries do not appear in the cash book.
Contra Entry:
A contra entry is a bookkeeping entry that involves both a debit and a credit entry that nullify each other out. It is used to record transactions that involve the transfer of funds between two accounts within the same entity.
In the context of the question, salaries due for the month of March would not be considered a contra entry because it does not involve the transfer of funds between two accounts within the same entity. Instead, it is a payment made to employees for their services rendered.
Therefore, the correct answer is option 'D' - salaries due for the month of March will not appear in the cash book.
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Salaries due for the month of March will appeara)on the receipt side of the cash bookb)on the payment side of the cash-bookc)as a contra entryd)nowhere in the cash bookCorrect answer is option 'D'. Can you explain this answer?
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