Subsidiary Books
Class-11-Commerce-Book-Keeping & Accountancy-Chapter-5-Maharashtra Board
Solutions
Objective type Questions & Answers
Question 1. Answer the following questions in one sentence.
(1) What is Subsidiary Books ?
The sub−division of the Journal based on the nature of transactions is known as Subsidiary Books, which are also referred to as books of original or prime entry.
(2) What is a Cash Book ?
A Cash Book is a subsidiary book used to record all cash and bank transactions, serving the dual purpose of both a journal and a ledger.
(3) State the meaning of 'Contra entry'.
A contra entry is a transaction that affects both the Cash Account and the Bank Account simultaneously and is recorded on both sides of the Cash Book.
(4) State the meaning of imprest system of Petty Cash Book.
The Imprest system is a method where the petty cashier is given a fixed advance at the start of a period and is later reimbursed for the exact amount spent to restore that original balance.
(5) Which transactions are recorded in Purchase Book ?
Only credit purchases of goods intended for resale or manufacturing are recorded in the Purchase Book.
(6) Which sales are recorded in Sales Book ?
Only goods sold on credit are recorded in the Sales Book.
(7) Which transactions are recorded in the Journal Proper ?
Transactions that do not find a place in any other specialized subsidiary books, such as opening entries, adjustment entries, and credit purchases of assets, are recorded in the Journal Proper.
(8) Who is a Petty Cashier ?
The person responsible for maintaining the Petty Cash Book and handling small, routine office expenses is known as the petty cashier.
Question 2. Give word/term or phrase for each of the following statements :
(1) Person who maintains Petty Cash Book.
(2) A bank account which the businessman prefer to open.
(3) Petty Cash Book in which the payment side is ruled in suitable columns.
(4) Subsidiary book in which only credit purchases of goods is recorded.
(5) Subsidiary book in which return of goods sold on credit is recorded.
(6) The entry which is recorded on both sides of cash book.
(7) Name the account which encourages personal savings.
(8) A note issued by buyer to seller giving full details of goods returned.
(9) Note issued by seller on receipt of defective goods from customer.
(10) Name the bank account on which overdraft facility is given to Account holder.
| Statement | Word/Term/Phrase |
| (1) Person who maintain Petty Cash Book. | Petty Cashier |
| (2) A bank account which the businessman prefer to open. | Current Account |
| (3) Petty Cash Book in which the payment side is ruled in suitable columns. | Analytical petty cash book |
| (4) Subsidiary book in which only credit purchases of goods is recorded. | Purchase book |
| (5) Subsidiary book in which return of goods sold on credit is recorded. | Sales Return Book |
| (6) The entry which is recorded on both sides of cash book. | Contra Entry |
| (7) Name the account which encourages personal savings. | Savings Account |
| (8) A note issued by buyer to seller giving full details of goods returned. | Debit Note |
| (9) Note issued by seller on receipt of defective goods from customer. | Credit Note |
| (10) Name the bank account on which overdraft facility is given to account holder. | Current Account |
Question 3. Select the most appropriate answers from the alternatives given below and rewrite the sentences
(1) Cash column of Cash Book can never have ..... balance.
(a) credit (b) debit (c) zero (d) none of the above
(a) credit
(2) Any entry recorded on both sides of Cash Book is known as ..... entry
(a) opening (b) rectifying (c) transfer (d) contra
(d) contra
(3) The source document for recording in Sales book is .....
(a) Inward Invoice (b) Outward Invoice
(c) Voucher (d) Cash Memo
(b) Outward Invoice
(4) Credit purchase of Machinery is recorded in the .......
(a) Purchase Book (b) Cash Book
(c) Journal Proper (d) Returns Outward Book
(c) Journal Proper
(5) Sub−division of journal is knows as .... book.
(a) Subsidiary (b) Purchase Return
(c) Purchase (d) Journal Proper
(a) Subsidiary
(6) Additional cash introduced in business is recorded in .....
(a) Purchase Book (b) Cash Book
(c) Journal Proper (d) Returns Inwards Book.
(b) Cash Book
(7) Entry for bad debts is recorded in the ......
(a) Sales Book (b) Purchase Book
(c) Cash Book (d) Journal Proper
(d) Journal Proper
(8) Direct deposit made by customer into our bank is recorded in the ..... side of the Cash Book.
(a) payments (b) credit (c) receipts (d) both
(c) receipts
(9) The person who draws the cheque and signs on it is the ......
(a) drawer (b) drawee (c) payee (d) all of the above
(a) drawer
(10) A fixed amount is deposited for a fixed period in ..... deposit account.
(a) Current (b) Savings (c) Fixed (d) Recurring
(c) Fixed
Question 4. State whether the following statements are True or False with reasons :
(1) Journal is a book of secondary entry.
Statement is: False
Reason: The Journal and its sub−divisions (Subsidiary Books) are known as books of original entry or prime entry because transactions are first recorded here before being posted to the Ledger. The Ledger is the book of secondary entry.
(2) Assets sold on credit are entered in Sales Journal.
Statement is: False
Reason: The Sales Journal (Sales Book) is used only for recording credit sales of goods intended for resale. Credit sales of assets, such as old furniture, are recorded in the Journal Proper.
(3) Cash and credit purchases are entered in Purchase Book.
Statement is: False
Reason: Only goods purchased on credit for resale or manufacturing are recorded in the Purchase Book. Cash purchases are not recorded there; they are entered in the Cash Book.
(4) Cash sales are entered in Sales Journal
Statement is: False
Reason: The Sales Journal is reserved exclusively for credit sales of goods. Cash sales are recorded in the Cash Book.
(5) Cash Book records transactions relating to receipts and payments of cash.
Statement is: True
Reason: By definition, all cash and bank transactions are recorded in the Cash Book, with receipts entered on the debit side and payments entered on the credit side.
Question 5. Do you agree with the following statements.
(1) Trade discount is recorded in Cash Book.
No, I do not agree.
Reason: Trade discount is deducted from the list price or gross value of goods at the time of the transaction, and the entry is made at the net value. Unlike cash discount, trade discount does not appear as a separate entry in the books of accounts or the Cash Book.
(2) Petty Cash Book is a book having record of big payments.
No, I do not agree.
Reason: The term "petty" is derived from the French word "Petit," meaning small. This book is specifically maintained to record small, routine office expenses (such as postage, carriage, and refreshments) that are too minor to be paid by cheque.
(3) Cash received is entered on the debit side of Cash Book.
Yes, I agree.
Reason: By standard accounting format, the Cash Book is divided into two sides: the left−hand side is the Receipt Side (Debit side) where all incoming cash is recorded, and the right−hand side is the Payment Side (Credit side).
(4) Transactions recorded on both debit and credit side of Cash Book is known as Contra Entry.
Yes, I agree.
Reason: A contra entry occurs when a transaction simultaneously affects both the Cash Account and the Bank Account (for example, depositing cash into the bank). Because both accounts are shown in a columnar Cash Book, the transaction must be recorded on both sides to reflect the increase in one and the decrease in the other.
(5) Credit purchase of machinery is entered in Purchase Journal.
No, I do not agree.
Reason: The Purchase Journal (Purchase Book) is used only to record credit purchases of goods intended for resale or manufacturing. Credit purchases of assets, such as machinery or furniture, are recorded in the Journal Proper.
Question 6. Complete the following sentences :
(1) Cash Book is a ..... Journal.
Cash Book is a special Journal.
(2) In Journal Proper, only .... discount is recorded.
In Journal Proper, only cash discount is recorded.
(3) Return of goods purchased on credit to the suppliers will be entered in ......... Journal.
Return of goods purchased on credit to the suppliers will be entered in Purchase Return Journal.
(4) Assets sold on credit are entered in ....
Assets sold on credit are entered in Journal Proper.
(5) Double column Cash Book records transactions relating to cash and....
Double column Cash Book records transactions relating to cash and bank.
(6) Credit purchases of goods are recorded in ....
Credit purchases of goods are recorded in Purchase Book.
(7) Cash Book does not record the ..... Transactions.
Cash Book does not record the credit transactions.
(8) Credit balance shown by a bank column in Cash Book is......
Credit balance shown by a bank column in Cash Book is bank overdraft.
(9) Petty Cash Book is used for recording ..... expenses.
Petty Cash Book is used for recording small expenses.
(10) In Purchase Book goods purchased on ..... are recorded.
In Purchase Book goods purchased on credit are recorded.
Question 7. Correct the following sentences and rewrite the same.
(1) Cash purchases of goods are recorded in Purchase book.
Corrected: Credit purchases of goods are recorded in the Purchase Book, whereas cash purchases are recorded in the Cash Book.
(2) Cash Book records cash trnasactions as well as credit transactions.
Corrected: Cash Book records only cash and bank transactions and does not record any credit transactions.
(3) Small and large business records all transaction in subsidiary books.
Corrected: A small business may record all transactions in a single Journal, while large businesses sub−divide the Journal into Subsidiary Books to handle a large volume of transactions.
(4) The person who maintain Petty Cash Book is called Chief Cashier.
Corrected: The person who maintains the Petty Cash Book is known as the petty cashier.
Question 8. Calculate the following.
(1) Cash purchases ₹ 1,60,000 at 10% T.D. and 5% C.D. What is the amount of Net purchases ?
Gross Purchases: ₹ 1,60,000
Less: Trade Discount (T.D.) @ 10%: ₹ 16,000 ..(10% of 1,60,000)
= ₹ 1,44,000
Less : 5% Cash Discount : ₹ 7,200 ..(5% of 1,44,000)
Net Purchases (Final Amount Paid): ₹ 1,36,800
(2) Purchased goods from Harish ₹ 12,000 @ 7% T.D. What is the amount of Trade discount?
Purchase Amount: ₹ 12,000
Trade Discount Rate: 7%, ∴ \(\frac{7}{100}\) × 12,000 = ₹ 840
The amount of Trade Discount is ₹ 840.
(3) Sold 50 shirts at ₹ 300 per shirt and 40 Trousers at ₹ 600 each, What is the amount of sales ?
Sales of Shirts: 50 shirts × ₹ 300 = ₹ 15,000
Sales of Trousers: 40 trousers × ₹ 600 = ₹ 24,000
Total Sales Amount: ₹ 15,000 + ₹ 24,000 = ₹ 39,000.
(4) Sold 30 Jackets at ₹ 500 per Jacket at 8% Trade discount, What is the amount of Trade discount ?
Gross Sales Value: 30 jackets × ₹ 500 = ₹ 15,000
Trade Discount Rate: 8%
∴ \(\frac{8}{100}\) × 15,000 = ₹ 1,200
The amount of Trade Discount is ₹ 1,200.
Question 9. Complete the following Table.
| 1) Cash Purchases | Credit purchases | Purchase Return | Net Purchases | |||
| 35,000 | + | 55,000 | ? | = | 88,000 | |
| 2) Cash Sales | Credit Sales | Sales Return | Total Sales | |||
| ? | + | 60,000 | 3,000 | = | 1,02,000 | |
| 3) Cash Sales | Credit Sales | Trade discount | Total Sales | |||
| 90,000 | + | 1,10,000 | 16,000 | = | ? | |
| 4) Cash Purchases | Credit purchases | Trade discount | Net Purchases | |||
| 70,000 | + | ? | 18,000 | = | 1,62,000 | |
| 5) Opening cash
Balance |
Cash Receipts | Cash Payments | Total cash | |||
| ? | + | 60,000 | 45,000 | = | 23,000 | |
| 6) Cash Sales | Credit Sales | Total Sales | Total Debtors | |||
| 1,20,000 | + | 1,40,000 | = | 2,60,000 | − | ? |
| 7) Cash Purchases | Credit purchases | Total Purchases | Total Creditors | |||
| 80,000 | + | ? | = | 1,90,000 | 1,10,000 | |
| 8) Opening Petty
Cash Balance |
Petty Cash
Received |
Petty Expenses
Paid |
Closing Petty
Cash Balance |
|||
| 250 | + | 1,750 | ? | = | 420 | |
| 9) Opening Petty Cash |
Petty Cash Received |
Petty Expenses Paid |
Closing Petty Cash Balance |
|||
| 400 | + | ? | − | 1,800 | = | 250 |
| 10) Opening Petty
Cash Balance |
Petty Cash
Received |
Petty Expenses
Paid |
Closing Petty
Cash Balance |
|||
| ? | + | 1,800 | 2,250 | 150 |
| 1) Cash Purchases | Credit purchases | Purchase Return | Net Purchases | |||
| 35,000 | + | 55,000 | − | 2000 | = | 88,000 |
| 2) Cash Sales | Credit Sales | Sales Return | Total Sales | |||
| 45,000 | + | 60,000 | − | 3,000 | = | 1,02,000 |
| 3) Cash Sales | Credit Sales | Trade discount | Total Sales | |||
| 90,000 | + | 1,10,000 | − | 16,000 | = | 1,84,000 |
| 4) Cash Purchases | Credit purchases | Trade discount | Net Purchases | |||
| 70,000 | + | 1,10,000 | − | 18,000 | = | 1,62,000 |
| 5) Opening cash
Balance |
Cash Receipts | Cash Payments | Total cash | |||
| 8,000 | + | 60,000 | − | 45,000 | = | 23,000 |
| 6) Cash Sales | Credit Sales | Total Sales | Total Debtors | |||
| 1,20,000 | + | 1,40,000 | = | 2,60,000 | − | 1,40,000 |
| 7) Cash Purchases | Credit purchases | Total Purchases | Total Creditors | |||
| 80,000 | + | 1,10,000 | = | 1,90,000 | − | 1,10,000 |
| 8) Opening Petty
Cash Balance |
Petty Cash
Received |
Petty Expenses
Paid |
Closing Petty
Cash Balance |
|||
| 250 | + | 1,750 | − | 1580 | = | 420 |
| 9) Opening Petty Cash |
Petty Cash Received |
Petty Expenses Paid |
Closing Petty Cash Balance |
|||
| 400 | + | 1650 | − | 1,800 | = | 250 |
| 10) Opening Petty
Cash Balance |
Petty Cash
Received |
Petty Expenses
Paid |
Closing Petty
Cash Balance |
|||
| 600 | + | 1,800 | − | 2,250 | = | 150 |
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