CIE Accounting Paper-2: Specimen Questions 80 - 82 of 103

Passage

Royal cosmetics have the following cash transactions during the month of January 2016.

Find out amount of Royal cosmetics have the following cash transactions

Royal cosmetics have the following cash transactions during the month of January 2016.

Date

Particulars

Amount

Date

Particulars

Amount

1

Opening balance (imprest System)

1000

9

Cartage

100

2

Stamps

120

10

travelling expenses

250

3

Wages for cleaner

150

11

Courier sent

150

4

Taxi fare

160

12

Entertainment of salesman

200

5

Office tea

150

13

Repair of cycle

100

6

Repairs of cycle

100

14

Printing

50

7

Advertisement

300

15

Stationery

30

8

Drew imprest from head cashier

16

Drew imprest from head cashier

Question number: 80 (2 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

State any two differences between the main cash book and the petty cash book?

Explanation

The two differences between petty cash book and main cash book are as follows:

(i) In the main cash book all the cash receipts are recorded, but in the petty cash book only the amount received from the head cashier are recorded.

(ii) All expenses except petty cash expenses are recorded in the main cash book. All petty expenses are recorded in the petty cash book.

Question number: 81 (3 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

What are the advantages that Royal cosmetics enjoy by maintaining their cash transactions under this system?

Explanation

Royal cosmetics can enjoy the following advantages by maintaining its book under the imprest system of petty cash:

(i) There exists a control over mistakes and frauds.

(ii) There exists a control over petty expenses.

Question number: 82 (4 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

What disadvantages do Royal cosmetics have to face while maintaining their records under this system?

Explanation

The disadvantages which Royal cosmetics faces under this system is as follows:

(i) The cashier has to have a check over the petty cash book apart from the main cash book.

(ii) The imprest amount is to be reimbursed on regular basis failing which; the petty cashier may not be able to meet the petty expenses.

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