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Direct payment to the third party on behalf of the account holder is entered in
- a)The cash-book when the amount is paid by the bank
- b)The cash-book when the entry is posted in the pass-book
- c)The pass-book when the entry is posted in the pass-book
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Direct payment to the third party on behalf of the account holder is e...
- Cash-book: It records all cash transactions, including bank transactions.
- Pass-book: It's a bank statement showing the bank's record of a customer's account.
- Direct Payment by Bank: When a bank makes a payment directly to a third party on behalf of an account holder, it is first recorded in the bank’s pass-book.
- Correct Answer: B. The cash-book when the entry is posted in the pass-book, because the transaction reflects in the cash-book after the bank processes it.
- Pass-book: It's a bank statement showing the bank's record of a customer's account.
- Direct Payment by Bank: When a bank makes a payment directly to a third party on behalf of an account holder, it is first recorded in the bank’s pass-book.
- Correct Answer: B. The cash-book when the entry is posted in the pass-book, because the transaction reflects in the cash-book after the bank processes it.
This question is part of UPSC exam. View all CA Foundation courses
Most Upvoted Answer
Direct payment to the third party on behalf of the account holder is e...
Explanation:
Direct payment to the third party on behalf of the account holder refers to a situation where the bank directly pays a third party on behalf of the account holder. For example, if an account holder has authorized the bank to pay their utility bills, the bank will make the payment directly to the utility company.
The entry for such a payment is recorded in the cash-book when the entry is posted in the pass-book. This means that the account holder will only come to know about the payment when they receive their pass-book and see the entry. The bank, however, will record the payment in their cash-book as soon as it is made.
The reason for this is that the cash-book is maintained by the bank and records all transactions made by the bank. The pass-book, on the other hand, is maintained by the account holder and records all transactions made on their account. Therefore, the entry for a direct payment to the third party on behalf of the account holder will only appear in the pass-book when the bank has posted the entry.
To summarize, the correct answer is option B, which states that direct payment to the third party on behalf of the account holder is entered in the cash-book when the entry is posted in the pass-book.
Direct payment to the third party on behalf of the account holder refers to a situation where the bank directly pays a third party on behalf of the account holder. For example, if an account holder has authorized the bank to pay their utility bills, the bank will make the payment directly to the utility company.
The entry for such a payment is recorded in the cash-book when the entry is posted in the pass-book. This means that the account holder will only come to know about the payment when they receive their pass-book and see the entry. The bank, however, will record the payment in their cash-book as soon as it is made.
The reason for this is that the cash-book is maintained by the bank and records all transactions made by the bank. The pass-book, on the other hand, is maintained by the account holder and records all transactions made on their account. Therefore, the entry for a direct payment to the third party on behalf of the account holder will only appear in the pass-book when the bank has posted the entry.
To summarize, the correct answer is option B, which states that direct payment to the third party on behalf of the account holder is entered in the cash-book when the entry is posted in the pass-book.
Community Answer
Direct payment to the third party on behalf of the account holder is e...
Bank records it but my firm cash book don't update it
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Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?
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Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direct payment to the third party on behalf of the account holder is entered ina)The cash-book when the amount is paid by the bankb)The cash-book when the entry is posted in the pass-bookc)The pass-book when the entry is posted in the pass-bookd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
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