The primary purpose of a cash book is to: MCQ with Answer and Explanation

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The primary purpose of a cash book is to:

A. Record all cash receipts and payments

B. Calculate profit

C. Record credit transactions

D. Prepare the balance sheet

Answer: Option A

Solution (By JKSSB Mock Tests)

A cash book serves as both a book of original entry and a ledger account, specifically for recording all cash receipts and payments.

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

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Question #1

The concept of 'Cost of Capital' is primarily used to evaluate:

A. Inventory turnover

B. Dividend declarations

C. Working capital adequacy

D. Capital Budgeting projects

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Correct Answer: Option D

Explanation:
Cost of capital serves as the discount rate or hurdle rate for evaluating long-term investment opportunities (capital budgeting).

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

Question #2

In the context of PFMS, the 'Core Banking Solution' (CBS) integration ensures that:

A. Government departments can open bank accounts directly

B. Tax collections are automatically deposited into the Consolidated Fund

C. The RBI can monitor all private bank transactions

D. Funds are credited to the beneficiary's account in real-time without manual intervention

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Correct Answer: Option D

Explanation:
CBS integration with PFMS ensures that once a payment instruction is processed, the funds are credited directly to the beneficiary's bank account in real-time, eliminating manual handling and delays.

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

Question #3

The petty cash book is balanced:

A. At the end of the month

B. Daily

C. When it is replenished

D. At the end of the year

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Correct Answer: Option C

Explanation:
Under imprest system, petty cash book is closed when cash is replenished, not periodically.

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

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