CIE Accounting Paper-2: Specimen Questions 27 - 29 of 103

Passage

The following transactions are shown in the books of Mr. Ringon for the month of January 2007.

Jan 1st Received a cheque from Mr. Fatso to whom goods were sold for £20000, allowed him 1%

Jan 2nd Mr. Fatso’s cheque was deposited in bank

Jan 5th Mr. Fatso‘s cheque was dishonored (bank charges £100)

Jan 8th Mr. Fatso settled his account by means of a cheque £20250, £150 being interest charged.

Question number: 27 (2 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

What are the other types of cash book available, which Mr. Ringon can maintain instead of three columnar cash book?

Explanation

The other types of cash book which are available for Mr. Ringon are as follows:

(i) Single column book: In this type only 1 column for cash is maintained

(ii) Double column book: In this type 2 columns are maintained. One is for cash and the other is for discount

(iii) Three column book: In this 3 columns are present, cash, bank and discount respectively. Mr. Ringon follows this type of cash book.

(iv) Petty cash book: This is to record all petty expenses which are repetitive in nature

Question number: 28 (3 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Prepare a three columnar cash book, for Mr. Ringon and show how these transactions will be entered.

Explanation

Three columnar cash book in the books of Mr. Ringon during the month of January 2007

Table of Three columnar cash book in the books of Mr. Ringon during the month of January 2007

DATE

PARTICULARS

LF

DISCOUNT

CASH

BANK

DATE

PARTICULARS

LF

DISCOUNT

CASH

BANK

Jan 1st

To Fatso A/c

200

19800

Jan 2nd

By bank A/c

C

19800

Jan 2nd

To Cash A/c

C

19800

jan 5th

By Fatso A/c

200

19900

Jan 8th

To Fatso A/c

20250

Note: £ 19900 include bank charges of £100

£20000 [email protected]%=£200

Question number: 29 (4 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Can Mr. Ringon be justified in not maintaining a separate ledger for cash?

Explanation

Yes, Mr. Ringon can justify himself in not maintaining a separate ledger account for cash. This is because; he maintains a three columnar cash book. Maintenance of cash book serves like a book of original entry. Here the transactions are recorded for the first time from the source documents. Receipts are recorded on one side and payments on the other. Hence cash book acts as both journal as well as ledger.

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