GSEB Class 11 Solutions Chapter 7 Cash Book and Its Types

 

Question 1. A book prepared to keep a record of cash transactions is ..........
(a) Purchase book
(b) Sales book
(c) Cash book
(d) Bills payable book
Answer: (c) Cash book
In simple words: A cash book is a specific financial record used to track all money-related dealings, helping a business monitor its cash flow effectively.

Exam Tip: Remember that the cash book is unique because it records only transactions involving actual cash or bank movements, making it a primary record for liquid assets.

 

Question 2. How many types of two columnar cash book can be prepared ?
(a) 2
(b) 3
(c) 4
(d) 5
Answer: (b) 3
In simple words: There are three main kinds of two-column cash books: cash and discount, cash and bank, and bank and discount, each serving a distinct purpose in tracking finances.

Exam Tip: The three types are Cash & Discount, Bank & Discount, and Cash & Bank. This is a factual recall question, so memorizing the exact number is important.

 

Question 3. .......... serves the purpose of journal and cash account.
(a) Cash book
(b) Sales book
(c) Sales return book
(d) Bills receivable book
Answer: (a) Cash book
In simple words: The cash book functions as both a first-entry journal and a ledger account for cash, meaning it records transactions initially and also maintains the final balance.

Exam Tip: The dual nature of the cash book as both a journal and a ledger saves time and reduces duplication of effort in accounting records.

 

Question 4. Which type of discount is not recorded in the cash book ?
(a) Kasar
(b) Discount received
(c) Discount allowed
(d) Trade discount
Answer: (d) Trade discount
In simple words: Trade discount is a reduction in price given at the time of purchase, and it is not written down in the cash book because the transaction is recorded at the net price after the discount.

Exam Tip: Always remember that trade discount is never recorded in the books of account; only the net amount after the discount is applied is entered.

 

Question 5. When bank credits interest in our account then ..........
(a) bank balance decreases
(b) bank balance increases
(c) cash balance decreases
(d) cash balance increases
Answer: (b) bank balance increases
In simple words: When a bank adds interest to your account, it means your total money in the bank goes up, so your bank balance rises.

Exam Tip: A 'credit' from the bank (like interest received) always implies an increase in the customer's account balance, while a 'debit' would mean a decrease.

 

Question 6. Which transactions are not recorded in the cash book ?
(a) Cash purchase
(b) Cash sales
(c) Cash discount
(d) Non-cash transactions
Answer: (d) Non-cash transactions
In simple words: The cash book is strictly for money-related dealings, so any transactions that do not involve the movement of cash or bank funds, such as credit purchases or sales, are not put into it.

Exam Tip: Non-cash transactions, like credit sales or purchases, deferred payments, or depreciation, are recorded in other subsidiary books or the main ledger, not the cash book.

 

Question 2. Answer the following questions in two or three sentences:
(1) Explain the meaning of cash book.
Answer: A cash book is a specific type of subsidiary book where all cash transactions are recorded. This book tracks transactions linked to cash, bank, and also cash discounts. It works as both a ledger and a journal, recording money receipts and payments, and at the end of a given period, it helps us know the cash and bank balance.
In simple words: A cash book is a record of all cash and bank transactions. It functions like both a journal and a ledger, showing balances at the end of a period.

Exam Tip: Highlight that the cash book is a 'subsidiary book' and serves a dual purpose as both a 'journal' (original entry) and a 'ledger' (final account).

 

(2) What is Bank overdraft ?
Answer: Bank overdraft happens when a trader, with a prior agreement with the bank, withdraws more money than what is actually in their account. The amount difference is known as a Bank overdraft. In simpler terms, if the total amount in the bank column on the payment side of the cash book is larger than the total on the receipt side, it indicates a Bank overdraft.

• Bank overdraft acts as a liability for the business.
• Interest on bank overdraft is an expense for the business.
• A Bank overdraft account always shows a credit balance.
• Current account holders usually get the facility of bank overdraft.

In simple words: Bank overdraft means taking out more money from the bank than you have, with permission. It's a loan from the bank, makes your bank account show a negative balance (credit balance), and is a business debt.

Exam Tip: Emphasize that bank overdraft is a 'liability' for the business and typically shows a 'credit balance' in the books, being available mostly to current account holders.

 

(3) What does balance of bank account indicate ?
Answer: Since a bank account is a personal account, its balance can be either a debit or a credit. If the total of the receipts side of the bank column is greater than the total of the payments side, the difference is called a 'Debit balance' (or Bank balance). This positive balance is displayed on the payment side as 'By balance carried forward'. Conversely, if the total of the payments side of the bank column is greater than the total of the receipts side, the difference is called a 'Credit balance' (or Bank overdraft). This negative balance is displayed on the debit side of the Cash book (receipts side) under the bank column as 'To balance carried forward'.
In simple words: A bank account's balance tells us if we have money (debit balance) or owe money to the bank (credit balance or overdraft). It shows our financial standing with the bank.

Exam Tip: Clearly differentiate between a 'Debit balance' (asset, money available) and a 'Credit balance' (liability, bank overdraft) for a bank account, noting where each appears in the cash book.

 

(4) Explain the meaning of petty cash book.
Answer: The petty cash book is a part of the main cash book. It is a specific record kept by the petty cashier to log payments for minor or small expenses, which is why it is known as a Petty cash book. The petty cashier prepares this book with distinct columns for various small expenses to be paid. This ensures that detailed information about all types of small expenses (and their total amount) paid by the petty cashier is readily available. A petty cash book can be created in two ways: (1) Simple petty cash book and (2) Petty cash book on Imprest system.
In simple words: A petty cash book is a small record book used by a cashier to track tiny, everyday expenses like bus fares or stamps. It helps keep track of small cash amounts that are spent.

Exam Tip: Remember that the petty cash book simplifies the main cash book by handling minor expenses separately, improving control over small cash outflows.

 

(5) Explain the full form of NEFT and RTGS.
Answer:
1. The full name of NEFT is National Electronic Fund Transfer.
2. The full name of RTGS is Real Time Gross Settlement.
Both of these services are offered to customers by participating banks within this scheme. Banks usually charge a small fee for providing these services.
In simple words: NEFT is like sending money electronically across the country, while RTGS is for sending large amounts of money instantly and directly. Both are bank services for moving funds.

Exam Tip: For full forms, ensure accuracy in spelling and capitalization. Understand that both are electronic fund transfer systems, with RTGS typically for higher-value, real-time transactions.

 

(6) Explain the importance of cash book in short.
Answer: The importance of a cash book is summarized below:

1. It functions as both a journal and a ledger: By keeping a cash book, there is no need to create a journal entry for the transactions recorded in it. Furthermore, it's not necessary to open a separate cash account in the ledger. Therefore, the cash book serves as both a ledger and a journal. 2. It saves time and effort: If the cash book includes transactions related to the bank and discount, then the cash book operates as an account itself. This means that both time and effort (labour) are saved. 3. Cash and bank balance can be known: The business's cash balance and bank balance can be easily determined because cash and bank transactions are accurately recorded in the cash book. 4. Surplus and deficit in the balance can be known: The cash balance from the cash book is identified at the end of each day and can be compared with the actual cash in the cash-box. This helps in knowing any differences in the balance. 5. Benefit of division of labour: The cash book is a distinct subsidiary book, and an independent person can manage it. This allows the business to get the benefit of dividing up the work. 6. Control over errors and frauds is possible: The balance as per the cash book is compared daily with the cash in the cash-box. This way, if any fraud or error happens while recording incomes and expenses, it can be identified through the deficit or surplus in the balance. Actions can then be taken against these types of errors or fraudulent activities.
In simple words: The cash book is important because it tracks all cash coming in and going out, helping us see our cash position, save time by combining records, and also detect mistakes or fraud.

Exam Tip: When explaining importance, always highlight efficiency (time-saving), accuracy (control over errors), and decision-making utility (knowing balances) as key benefits.

 

(7) Explain : Contra transaction
Answer: A 'Contra transaction' means a financial transaction where both cash and bank accounts are affected. These transactions are recorded on both sides of the cash book. Generally, there are two types of contra transactions: (1) Cash deposited in the bank and (2) Cash withdrawn from the bank. A contra transaction influences only the 'cash' and 'bank' accounts and no other accounts. Therefore, no separate posting of a 'Contra transaction' is necessary. Additionally, the letter 'C' is written in the L.F. No. column of the cash book on both sides.
In simple words: A contra transaction is when money moves between a business's cash and bank accounts. It's recorded on both sides of the cash book, and we mark it with a 'C'.

Exam Tip: The key feature of a contra transaction is that it affects both the cash and bank columns of the *same* cash book, canceling each other out in terms of net cash/bank change, and is marked with 'C' in the L.F. column.

 

(8) Explain Bank Book with illustrations.
Answer: Bank Book: In the current era, most cash transactions are handled through banks. If a business has accounts in more than one bank, or several accounts within a single bank, a bank book is prepared to record these bank transactions. This helps in getting the required information quickly and in tallying the balances, so a businessman maintains a bank book with different columns. Illustrations: If the accounts are in various banks, the bank's name is written in different columns, such as Dena Bank, Canara Bank, or SBI. However, if a single bank has multiple accounts, then account numbers like 1, 2, etc., are written in different columns. The structure and look of a bank book are similar to a cash book. Utilities (Importance): The benefits of the bank book include:

• Easily recorded: Bank transactions can be easily recorded, particularly when a large volume of transactions goes through the bank.
• Reconciliation: With the help of the bank book, transactions can be easily matched with the pass book or bank statement.
• Bank balance: At any specific point, the bank balance of various bank accounts can be known.
• Liquidity: It allows for constant monitoring of the different financial transactions entered through various bank current accounts by the business organization. This helps in maintaining the liquidity of the business.

In simple words: A bank book is a record for businesses that have multiple bank accounts or accounts in different banks. It helps them track all bank dealings, manage cash flow, and ensure accuracy, just like a detailed cash book.

Exam Tip: When explaining the bank book, highlight its utility for businesses with multiple bank accounts and its role in easy reconciliation and liquidity management.

 

(9) Explain the meaning of petty cash book on Imprest system.
Answer: Imprest petty cash book: In this kind of petty cash book, a fixed amount is given to the petty cashier, considering the largest expected sundry expenses. This amount with the petty cashier should never exceed the pre-decided limit at any time. At the end of each fixed period, the petty cashier provides accounts for the amount spent to the head cashier, who reviews these accounts and pays the petty cashier the total amount expended. Thus, the petty cashier always has a fixed amount (imprest) at the start of every specified period.
In simple words: The imprest system for a petty cash book means the petty cashier always starts with a set amount of money. When they spend some, the main cashier gives them back the exact amount spent, so the petty cash fund is always topped up to the original fixed amount.

Exam Tip: The core concept of the imprest system is that the petty cash fund is replenished for the exact amount spent, always bringing it back to the predetermined fixed amount.

 

Question 3. Record the following transactions in the cash book of Prapti :
2015
June 1 Opening cash balance Rs 10,000.
2 Cash sales Rs 3,000.
3 Cash of Rs 2,000 brought in the business, as more funds are required. Cash purchase Rs 6,000.
7 Salary of Rs 1,000 and brokerage of Rs 1,500 paid by cash.
9 Goods of Rs 5,000 purchased from Drona by cash.
11 Goods of Rs 6,000 sold to Mansi for cash.
19 Rs 3,000 paid to Nairuti for goods purchased in the previous month.
23 Kinjal paid Rs 1,500 for goods sold to her in the previous month.
25 Old cycle of Rs 600 is purchased for business.
28 Rs 1,000 received towards commission.
30 Machine of Rs 3,500 purchased for business.
Answer:

Exam Tip: For simple cash books, ensure accurate recording of receipts on the debit side and payments on the credit side. The closing cash balance is critical for the next period's opening balance.

 

Question 4. From the following transactions, prepare cash and discount columnar cash book of Javlit:
2015
April 1 Opening cash balance Rs 5,500.
3 Goods of Rs 4,000 sold at 10% cash discount.
4 Goods of Rs 3,000 sold at 10% trade discount.
5 Cash of Rs 2,000 paid to Arth in full settlement of his account of Rs 2,030.
10 Goods of Rs 4,000 purchased at 5 % cash discount.
13 Salary of Rs 1,000 and wages of Rs 600 are paid by cash.
15 Commission of Rs 100 and brokerage of Rs 900 are received.
17 Cash of Rs 1,400 paid to Krishna in full settlement of account of Rs 1,420.
18 Goods of Rs 5,000 sold at 10% trade discount and 5% cash discount.
19 A machine of Rs 6,000 purchased from Ramesh, for which Rs 2,000 paid by cash and it is decided that the remaining amount will be paid after one month.
23 As more funds are required in the business, household furniture of Rs 3,000 is sold for Rs 3,500 and out of this Rs 2,500 are brought in the business.
27 Rs 225 paid to Vepari Mahamandal towards annual fees.
29 Godown rent Rs 600 paid by cash and carriage of Rs 300 paid to Shambhu by cash.
Answer:

Exam Tip: For cash and discount columnar cash books, ensure trade discounts are ignored, cash discounts are recorded in the discount columns, and that both cash and discount columns are properly balanced and carried forward.

 

Question 5. From the following transactions, prepare cash and bank columnar cash book of Riddhi :
2015
May 1 Opening cash balance Rs 4,000, opening bank balance Rs 6,000.
2 Goods of Rs 5,000 sold to Monika at 10 % trade discount. Monika issued cheque for the necessary amount, which is immediately deposited in the bank.
4 Rs 2,000 paid towards salary and Rs 100 paid towards brokerage by cash.
6 Rs 3,000 withdrawn from the bank for personal use.
10 Goods of Rs 6,000 sold to Hiren. Hiren paid Rs 4,000 by cash and remaining amount is paid by cheque, which is deposited in the bank.
12 Goods of Rs 5,000 purchased and the amount is paid by cheque.
17 Shop rent of Rs 2,000 paid by cheque.
21 Goods of Rs 4,500 purchased in cash at 10% trade discount.
24 Karishma has paid Rs 2,550 by cash towards her debt.
26 Atmakalyani has been paid Rs 1,200 towards full settlement of an old account.
29 Jhanvi issued a cheque of Rs 3,000, which is immediately deposited in the bank.
30 Rs 1,000 cash deposited in the bank.
Answer:

Exam Tip: For cash and bank columnar cash books, correctly identify cash transactions (affecting cash column), bank transactions (affecting bank column), and contra transactions (affecting both, marked 'C').

 

Question 6. From the following transactions, prepare cash and bank columnar cash book in the books of Bhagwati Traders :
2015
July 1 Opening cash balance Rs 5,000, opening bank overdraft Rs 1,500.
3 Goods of Rs 8,000 sold to Janki at 10% trade discount for cash.
5 Rs 3,000 deposited in the bank.
6 Goods of Rs 2,000 sold to Jinal. Jinal paid the amount immediately by cheque which is deposited in the bank.
8 Furniture of Rs 2,000 purchased and the amount is immediately paid by cheque.
9 Cheque of Rs 3,000 received from Bhargavi, which is endorsed in favour of Parth.
13 Goods of Rs 6,000 sold to Harshit. Harshit has paid half of the amount by cash and remaining amount is paid by cheque, which is immediately deposited in the bank.
15 Goods of Rs 6,000 purchased from Divyesh and amount is immediately paid by cash.
18 Salary of Rs 1,000 and brokerage of Rs 500 are paid by cash.
22 Rs 1,000 withdrawn from the bank for the payment of the electricity bill.
23 Electricity bill paid.
24 Goods of Rs 1,400 sold to Smith, for which he issued a cheque of the necessary amount, which is immediately deposited in the bank.
27 Bank informed that cheque issued by Smith is dishonoured.
28 Bank debited Rs 100 to our account for interest on overdraft and it is informed to us through bank advice.
Answer:

Note : Transaction of Date 9 will be recorded in Journal proper.

Exam Tip: Pay close attention to bank overdrafts (credit balance at opening), trade discounts (not recorded), and dishonoured cheques (reversed in bank column). Contra entries must be accurately marked with 'C'.

 

Question 7. From the following transactions, prepare bank and discount columnar cash book of Akhilesh :
2015
July 1 Opening bank overdraft Rs 13,500.
2 Goods of Rs 5,000 sold to Premal, against which he issued a cheque of Rs 4,950 in full settlement of account, which is immediately deposited in the bank.
8 Goods of Rs 6,000 purchased and a cheque is issued for the necessary amount.
10 Cheque of Rs 5,000 is received from Gitaben in full settlement of account of Rs 5,060. 15 Cheque of Rs 7,000 issued to Aradhana in full settlement of the debt of Rs 7,015.
20 Goods of Rs 16,000 sold to Kajol, for which she issued a cheque of the necessary amount, which is deposited in the bank.
25 Cash of Rs 2,000 deposited in the bank.
29 Cheque issued by Kajol is dishonoured.
Answer:

Exam Tip: Be mindful of bank overdrafts that appear on the credit side as an opening balance. Remember to record discount amounts accurately in their respective columns for both receipts and payments.

 

Question 8. From the following transactions, prepare three columnar cash book of Namrata:
2015
August
1 Opening cash balance Rs 7,000, opening bank balance Rs 6,000.
3 Cash purchase Rs 6,000; cash sales Rs 7,000.
5 Rs 3,000 is deposited in the bank.
6 As more funds are required in the business, a loan of Rs 5,000 is taken from Prabhu bearing
8% interest rate.
8 Goods of Rs 3,000 sold to Mansi at 10 % cash discount, Mansi issued a cheque of the necessary amount, which is deposited in the bank.
10 Goods of Rs 7,000 purchased from Dvij and 50 % of the amount is immediately paid by cash.
12 Salary of Rs 3,000, wages of Rs 500 and stationery of Rs 200 are paid by cheque.
14 Commission of Rs 1,000 and brokerage of Rs 500 received by cash.
16 Bank credited interest Rs 100 on balance in Namrata's bank.
17 Rs 2,000 withdrawn from the bank for the payment of the electricity bill.
20 Rs 1,000 paid for the electricity bill and remaining Rs 1,000 is taken for personal use from the business.
22 Goods of Rs 5,000 sold to Parth, he issued a cheque of the necessary amount after deducting cash discount at the rate of 10%, which is immediately deposited in the bank.
25 Cheque issued by Parth is dishonoured.
28 Cheque of Rs 6,050 is issued to Bansari towards an old debt. Total debt was of Rs 6,100.
29 Gopi has paid Rs 2,000 by cash in full settlement of the debt Rs 2,040.
31 After keeping cash on hand of Rs 5,000, remaining amount is deposited in the bank.
Answer:

Explanation: Account entry for cancelled discount due to dishonoured of cheque dated 25th is as under in the journal. proper :
Parth A/c Dr 500
To Discount Given A/c 500

Exam Tip: For three-columnar cash books, correctly handle cash, bank, and discount columns. Pay special attention to contra entries, full settlements involving discounts, and dishonoured cheques which require reversal entries.

 

Question 9. From the following transactions, prepare bank book in the books of Kalpana:
2015
Sept. 1 Opening bank balance (State Bank of India – SBI) Rs 5,000,
Opening bank overdraft (Bank of Baroda – BOB) Rs 4,000.
2 Goods of Rs 8,000 purchased, for which cheque of Rs 3,000 on SBI and for the remaining amount, a cheque of BOB is issued.
4 Goods of Rs 7,000 sold to Jeni, Jeni issued a cheque of the necessary amount, which is deposited in the BOB account.
6 Salary of Rs 3,000 paid by cheque of BOB.
8 SBI credited Rs 700 for interest and Rs 2,000 for dividend.
10 Rs 1,500 withdrawn from SBI for personal use.
12 Crossed cheque of Rs 15,000 received from Jinal towards her due, which is deposited in the BOB account.
20 Cheque of Rs 2,000 issued from SBI bank account and is deposited in the bank account of BOB.
22 Goods of Rs 4,000 sold at 10% cash discount, for which cheque is received, which is deposited in the BOB account.
Answer: To prepare Kalpana's bank book, you would create separate columns for each bank account (SBI and BOB) on both the debit (receipts) and credit (payments) sides. First, record the opening balances: a debit balance for SBI and a credit balance (overdraft) for BOB. Next, systematically record each transaction, ensuring that funds are correctly allocated to the respective bank columns. For purchases and sales, consider which bank's cheque is used or received. Withdrawals for personal use or payments will be entered on the credit side, while deposits, interest, and dividends will go on the debit side. Transfers between bank accounts will be treated as contra entries if both accounts are within the same bank book, or as separate debit and credit entries if they are distinct columns. The book must then be balanced at the end of the period to determine the closing balances for each bank account.
In simple words: To make Kalpana's bank book, set up columns for SBI and BOB, then list all money coming in (debit) and going out (credit) for each bank. Start with the correct opening balances for each. Remember to account for discounts and any cheque transfers between accounts, then sum up to find the final bank balances.

Exam Tip: When dealing with multiple bank accounts, remember to create distinct columns for each bank. Pay attention to opening overdrafts, inter-bank transfers, and how each transaction specifically impacts each bank's balance.

 

Question 10. From the following transactions, prepare petty cash book of Jigar: 2015 October 1 Opening petty cash balance Rs 4,000. 1 Amount received from the chief cashier Rs 1,000. 3 Wages of 600 and carriage of Rs 400 are paid. 5 700 paid for postage and postal stamps expenses. 8 200 paid for wages. 10 400 paid for stationery expenses. 12 150 paid for Tea and Refreshment expenses. 14 500 received from the chief cashier. 15 Misc. expenses paid Rs 500. 17 400 given to Mishal for the payment of misc. expenses.
Answer:

Exam Tip: When preparing a petty cash book, ensure you classify all expenses correctly into their respective columns for easy tracking and analysis.

 

Question 11. From the following transactions, prepare petty cash book of Sfari Prince as per -petty imprest system : 2015 Nov. 1 Cash received from chief cashier Rs 5,000. 2 Rs 500 for printing charges of bill book and Rs 350 for other stationery items are paid. 5 Postage expenses paid Rs 200. 7 Carriage 50 and wages of Rs 50 paid. 10 Rs 100 is paid to Brij towards salary. 12 200 is given to Sandeep for the payment of misc. expenses. 18 Carriage of Rs 50 and stationery expenses of Rs 300 are paid, 20 100 paid for misc. expenses. 24 80 paid for postal stamps. 28 350 for wages and 70 for misc. expenses are paid.
Answer:

Exam Tip: For petty cash books under the imprest system, always ensure the cashier is reimbursed the exact amount spent to restore the float to its original fixed sum.

 

Question 12. The following information has been obtained in respect of the petty cash book maintained as per petty cash book on imprest system for the month ending on dt. 31-12-'15: Stationery expenses Rs 500 Carriage 90 Wages 980 Tea & Refreshment 200 Misc. expenses Rs 300 From this information pass journal entries.
Answer:

Exam Tip: When making journal entries for petty cash expenses under the imprest system, remember to debit all individual expense accounts and credit the Petty Cashier Account for the total amount spent.

 

Question 13. From the following transactions, prepare three columnar cash book of Shri Mahendrabhai Bhatt: 2016 Jan 1 Opening cash balance Rs 3,500, opening bank overdraft Rs 6,000. 2 Goods of Rs 2,000 sold to Parag in cash at 10 % cash discount. 4 Goods of Rs 4,000 purchased from Dipak at 10 % trade discount and 5% cash discount and the amount is paid by cheque. 6 Goods of Rs 7,000 sold to Ami. Ami paid 40% amount by cash and the remaining amount is paid by cheque. Cheque is deposited in the bank. 8 Cheque of Rs 6,000 is received, which is issued by Gaurang towards the payment of his old debt of Rs 6,050, which is deposited in the bank. 12 Salary of 2,000 paid by MEET and * 5 paid for NEFT charge. 15 Rs 1,500 paid for railway freight by cheque. 17 4,100 deposited in the bank. 20 As more funds are required in the business, personal vehicle of Rs 10,000 sold for 8,000 and Rs 7,000 is brought in the business. 23 Rs 6,000 withdrawn from the bank for the payment of school fees of his daughter. 25 Rs 500 paid for the shop rent. 28 Bank debited Rs 30 bank commission and Rs 20 for SMS charges. 29 5,000 deposited in the bank account.
Answer:

Exam Tip: Remember to correctly identify contra transactions (cash deposited or withdrawn from the bank) and mark them with 'C' in the L.F. column on both sides of the cash book.

 

Question 14. From the following transactions, prepare three columnar cash book of Sonamben: 2016 Feb. 1 Cash balance 16,000, bank balance 18,000. 4 Goods of Rs 8,000 sold to Shri Ashokbhai. He has paid the amount in the bank through NEFT. 6 Goods of 10,000 sold to Hetal in cash at 10% cash discount. 9 3,000 deposited in the bank. 11 Life insurance premium of Rs 2,000 is paid by NEFT and bank debited Rs 3 for charges. 13 Salary of 3,000 paid. 14 Wages of Rs 2,000 paid. 17 Cash purchase Rs 1,000; cash sales Rs 3,000. 19 Bank credited Rs 2,500 for dividend through NEFT. 21 Commission of Rs 1,200 paid. 23 Fire insurance premium of Rs 2,500 paid by NEFT and bank debited 2 for charges. 25 Bank credited Bank-interest of 200 and commission of 200 in our account through NEFT. 28 Bank has paid the vehicle loan installment of Rs 12,000 on behalf of us through NEFT and bank debited 3 for charges.
Answer:

Exam Tip: When dealing with NEFT or RTGS transactions, remember to also record any associated bank charges in the respective discount or bank columns.

 

Question 15. From the following transactions, prepare three columnar cash book of Mansi: 2015 Sept. 1 Cash balance Rs 10,000; bank overdraft Rs 5,000. 2 Goods of Rs 5,000 purchased for cash from Keval at 10% trade discount and 2 % cash discount. 6 Rs 8,000 is received through NEFT and Rs 1,900 cash received from Jyoti in full settlement of account of Rs 10,000. 10 Salary of 500 paid to Vinod through NEFT and Rs 100 paid for rent by cash and bank debited 3 for charges. 15 Goods of Rs 3,000 sold to Kashmiraben for cash. 20 Rs 500 withdrawn for office expenses and Rs 350 withdrawn for personal use from the bank. 25 Machine of Rs 3,000 purchased and machine installation wages 250 paid. 30 After keeping cash on hand of Rs 1,000, the balance amount is deposited in the bank.
Answer:

Exam Tip: For bank overdrafts, ensure the opening balance is recorded on the credit side (payments) of the bank column in your cash book.

 

Question 16. Record the following transactions in two columnar cash book of Shri Bhupinder for April, 2016: 2016 April 1 Opening cash balance Rs 55,000, bank balance Rs 5,50,000. 3 5,500 is given in donation. 3 49,500 paid to Mahesh through NEFT for his receivables. NEFT charge is 5. Bank debited this amount. 5 Darshan paid Rs 66,000 through NEFT towards his debt. Bank credited the amount. Darshan paid NEFT charges Rs 5. 6 Rent of Rs 14,300 is paid by cash. 8 Bank credited 22,000 for commission. 10 Cash purchase Rs 2,75,000, amount paid through RTGS. RTGS charge is Rs 30. 12 Cash sales Rs 3,85,000, amount is received through RTGS. 13 22,000 paid to Kalpana towards her receivables through NEFT and NEFT charge is 5. 20 Cash sales 44,000. 24 Cash purchase Rs 27,500. 25 Rs 49,500 sent for daughter's medical college fees through NEFT and debited the amount including 5 for NEFT charge. 30 Bank credited * 33,000 of dividend and Life Insurance premium paid Rs 11,000 through NEFT.
Answer:

Exam Tip: Always double-check your calculations for cash and bank columns, especially when dealing with multiple transactions involving NEFT, RTGS, and associated charges to avoid errors.