The 'Cash Book' serves as: MCQ with Answer and Explanation

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The 'Cash Book' serves as:

A. Only a ledger

B. Only a journal

C. A subsidiary book for all transactions

D. Both journal and ledger for cash transactions

Answer: Option D

Solution (By JKSSB Mock Tests)

Cash book records all cash and bank transactions, functioning as journal (original entry) and ledger.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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Voucher approach implies that every financial transaction must be supported by:

A. A trial balance

B. Verbal approval

C. Documentary evidence

D. An audit report

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Correct Answer: Option C

Explanation:
The essence of the voucher system is to ensure no entry is made in the books without an authentic, authorized documentary evidence (voucher).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

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Which of the following is NOT a principle of cash-based accounting?

A. Expenses are recognized when cash is paid

B. No record of credit transactions

C. Revenue is recognized when earned

D. Revenue is recognized when cash is received

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Correct Answer: Option C

Explanation:
Recognizing revenue when earned is a principle of accrual accounting. Cash-based accounting only recognizes revenue when cash is actually received.

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Question #3

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In the context of PFMS, the 'Public Accounts Committee' (PAC) examines:

A. The appropriation accounts and the audit reports of the CAG

B. The annual budget estimates

C. The tax collection policies

D. The monetary policy of the RBI

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Correct Answer: Option A

Explanation:
The Public Accounts Committee (PAC) of the Parliament examines the appropriation accounts (showing how grants were spent) and the audit reports submitted by the Comptroller and Auditor General (CAG).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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