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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
Correct answer is option 'A'. Can you explain this answer?
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Cheques received but deposited on the next day are recorded in :a)Cash...
When a business house receives a cheque it is entered in the bank column on the receipt side if paid into the bank on the same day. If the cheque is not deposited in the bank on the same day then it is entered in the cash column of the cash book when it is received. When the cheque is deposited in the bank a contra entry is passed.
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Cheques received but deposited on the next day are recorded in :a)Cash...
Recording of Cheques Deposited on the Next Day in Cash Book
In the cash book, all the transactions related to cash and bank are recorded. When a cheque is received but deposited on the next day, it affects the cash and bank balance of the business. In this case, the cheque is not deposited on the same day, so it should be recorded in the cash column of the cash book. The reason for recording it in the cash column is that the business has not received the funds in the bank yet, and it cannot be considered as a bank transaction until it is deposited.
For example, if a business receives a cheque of Rs. 10,000 on 1st January but deposits it on 2nd January, the entry in the cash book will be as follows:
Date | Particulars | Cash | Bank |
-----|------------|------|------|
1-Jan| Received a cheque of Rs. 10,000 | 10,000 | 0 |
2-Jan| Deposited the cheque in the bank | 0 | 10,000 |
As we can see from the entry, the cheque is recorded in the cash column and not in the bank column because it is not a bank transaction until it is deposited.
Conclusion
In conclusion, when a cheque is received but deposited on the next day, it should be recorded in the cash column of the cash book. This is because the business has not received the funds in the bank yet, and it cannot be considered a bank transaction until it is deposited.
In the cash book, all the transactions related to cash and bank are recorded. When a cheque is received but deposited on the next day, it affects the cash and bank balance of the business. In this case, the cheque is not deposited on the same day, so it should be recorded in the cash column of the cash book. The reason for recording it in the cash column is that the business has not received the funds in the bank yet, and it cannot be considered as a bank transaction until it is deposited.
For example, if a business receives a cheque of Rs. 10,000 on 1st January but deposits it on 2nd January, the entry in the cash book will be as follows:
Date | Particulars | Cash | Bank |
-----|------------|------|------|
1-Jan| Received a cheque of Rs. 10,000 | 10,000 | 0 |
2-Jan| Deposited the cheque in the bank | 0 | 10,000 |
As we can see from the entry, the cheque is recorded in the cash column and not in the bank column because it is not a bank transaction until it is deposited.
Conclusion
In conclusion, when a cheque is received but deposited on the next day, it should be recorded in the cash column of the cash book. This is because the business has not received the funds in the bank yet, and it cannot be considered a bank transaction until it is deposited.
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Cheques received but deposited on the next day are recorded in :a)Cash column of the cash bookb)Bank column of the cash bookc)Both of thesed)None of theseCorrect answer is option 'A'. Can you explain this answer?
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