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Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance?
Verified Answer
Which of the following is false regarding the cash book: (a) All credi...
Option (d) is false regarding the cash book.
The cash book is a record of all cash transactions, including both cash receipts and cash payments. It is used to track the inflow and outflow of cash in a business and to reconcile the cash balance with the bank statement.
In the cash book, all credit and cash transactions are recorded, including the opening balance of cash, which is shown on the debit side of the cash book as "By Balance b/d." Only transactions involving cash receipt and payments are recorded in the cash book.
It is possible for the cash book to show a credit balance, which occurs when the total of the cash payments is less than the total of the cash receipts. This indicates that the business has a surplus of cash on hand.
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Which of the following is false regarding the cash book: (a) All credi...
False Statement: This book cannot show a credit balance.
Explanation:
The cash book is a subsidiary book used to record all cash-related transactions of a business. It is an important book of accounts that provides a comprehensive record of cash receipts and payments.
Key Points:
1. All credit and cash transactions are recorded: The cash book records both cash receipts and cash payments. It includes transactions involving both cash and credit. So, statement (a) is true.
2. Opening balance of cash is shown in Dr Side of the cash book as 'To Balance b/d': When a new accounting period begins, the cash book starts with an opening balance. This opening balance represents the cash on hand at the beginning of the period. It is recorded on the debit side of the cash book as "To Balance b/d". So, statement (b) is true.
3. Only transactions of cash receipt and payments are recorded: The cash book records only cash transactions, including cash receipts and cash payments. It does not record transactions that do not involve cash. So, statement (c) is true.
4. This book can show a credit balance: The cash book can have a credit balance under certain circumstances. If the total cash receipts are greater than the total cash payments during a particular period, the cash book will show a credit balance. This occurs when the business receives more cash than it pays out. So, statement (d) is false.
Conclusion:
The false statement regarding the cash book is that it cannot show a credit balance. In reality, the cash book can show a credit balance when the total cash receipts exceed the total cash payments.
Explanation:
The cash book is a subsidiary book used to record all cash-related transactions of a business. It is an important book of accounts that provides a comprehensive record of cash receipts and payments.
Key Points:
1. All credit and cash transactions are recorded: The cash book records both cash receipts and cash payments. It includes transactions involving both cash and credit. So, statement (a) is true.
2. Opening balance of cash is shown in Dr Side of the cash book as 'To Balance b/d': When a new accounting period begins, the cash book starts with an opening balance. This opening balance represents the cash on hand at the beginning of the period. It is recorded on the debit side of the cash book as "To Balance b/d". So, statement (b) is true.
3. Only transactions of cash receipt and payments are recorded: The cash book records only cash transactions, including cash receipts and cash payments. It does not record transactions that do not involve cash. So, statement (c) is true.
4. This book can show a credit balance: The cash book can have a credit balance under certain circumstances. If the total cash receipts are greater than the total cash payments during a particular period, the cash book will show a credit balance. This occurs when the business receives more cash than it pays out. So, statement (d) is false.
Conclusion:
The false statement regarding the cash book is that it cannot show a credit balance. In reality, the cash book can show a credit balance when the total cash receipts exceed the total cash payments.
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Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance?
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Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance?.
Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is false regarding the cash book: (a) All credit and cash transaction are recorded (b) Opening balance of cash is shown in Dr Side of the cash book as 'To Balance br (c) Only transactions of cash receipt and payments are recorded (d) This book can not show a credit balance?.
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