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Standard XII
Accountancy
Question

Credit transactions are never recorded in cash book.
  1. True
  2. False

A
True
B
False
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Solution
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Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. This is a very popular book and is maintained by all organisations, big or small, profit or not-for-profit. It serves the purpose of both the journal as well as the ledger account. It is also called the book of original entry.
A cash book records the transactions related to cash receipts and cash payments. Thus, it records only those transactions that involve cash inflows or outflows. Credit transactions are not recorded in the cash book as it does not involve any cash inflows or outflows.

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Similar Questions
Q1
Credit transactions are never recorded in cash book.
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Q2
If the debit and credit aspects of a transaction are recorded in the cash book it is a:
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Q3
Which of the following statements is/are true?
(i) Cash book records all cash receipts and cash payments.
(ii) Cash book records all sale and purchase transactions of goods both in cash and on credit.
(iii) Cash book records discount on cash payments
Select the correct answer from the options given below :-
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Q4
A transaction recorded on the credit side of cash book is transferred to the ledger _______________.
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Q5
If the debit as well as the credit aspects of a transaction are recorded in the cash book itself, it is called ______________.

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