Answered: .3 Explain the following terms in your…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q.3 Explain the following terms in your own words:
a) On which side opening cash balance should be recorded in the cash book?
b) Is it possible that we sale goods for Rs. 20,000 and receive Rs. 19,000, if yes than explain
with reason?
c) If bank credited interest on securities in our account than on which side we should record
that interest in the double column cash book?
d) In which case bank debited our account and what will be the accounting treatment in our
books?
e) If owner pay his university dues from the bank balance of business, what will be the
effect of this transaction on cash book?

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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