S1: A Cash Book is a subsidiary book. S2: A Cash Book also acts as a ledger account. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: A Cash Book is a subsidiary book. S2: A Cash Book also acts as a ledger account. Which statement(s) is/are correct?
A. Both S1 and S2
B. S1 only
C. Neither S1 nor S2
D. S2 only
Answer: Option A
Solution (By JKSSB Mock Tests)
The Cash Book is a subsidiary book (book of original entry) for cash transactions. It also serves as the Cash and Bank accounts in the ledger, eliminating the need to post them separately. Both statements are correct.
Explanation:
When cash is realized in installments during dissolution, it is distributed using either the Maximum Loss Method or the Surplus Capital (Proportionate Capital) Method to ensure partners' capital accounts are correctly adjusted.
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