Cash Book

 CASH BOOK

MEANING OF CASH BOOK

Cash book is a sub-division of a journal.

All transactions related to cash are recorded in the cash book.

There are different types of cash books.

They are simple or single column cash book, double column cash book, triple column cash book and petty cash book.

In large firms, generally cash book is divided into two parts.

They are cash disbursement journal and cash receipts journal.

 

Define a cheque and state the various parties connected with the cheque.

CHEQUE

Cheque is a written order. This order is given to the bank by an account holder.

Account holder may be person or institution.

Cheque is issued for the payment of a certain amount out of deposit.

It may be to the self or others.

In short, a cheque is an order on a banker to pay the money.

 

PARTIES INVOLVED IN A CHEQUE

Drawer

The person or firm who opens account and deposits money into bank is known drawer.

He writes and issues the cheque.

Only bank account holder can issue the cheque.

Drawee

For cheque purpose bank is drawee.

The cheque is drawn on bank.

Bank pays amount of cheque.

There must be sufficient amount in the bank to pay amount of cheque.

Payee

The person or the firm whose name is in cheque, he is known as payee.

But, when drawer or depositor writes the cheque for himself, drawer becomes payee.

In this condition, drawer and payee are same.

 

What do you mean by crossing of cheque?  Give an example of simple crossing.

CROSSED CHEQUE

When two slanted or parallel lines are drawn in left hand side of cheque, it is known crossing of cheque.

These lines are drawn in front side of cheque.

When a cheque is crossed, the bank will not make payment direct.

The cheque holder must have bank account.

 

What do you mean by endorsement of a cheque?

ENDORSEMENT OF A CHEQUE

There are three types of cheque.

They are bearer, order and crossed cheque.

Bearer cheque does not need to endorse.

Crossed cheque cannot endorse. Only order cheque is endorsed.

Endorsement of cheque is changing of ownership. 

Suppose cheque received from Katrina (debtor) is given to Salman (creditor); it is an endorsement of cheque.

 

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Differentiate between a bearer cheque and order cheque.

Mention any four qualities of a good cheque.

QUALITIES OF GOOD A CHEQUE

When cheque presents at the bank for payment and payment make easily, it is known good quality of cheque. Some good qualities are as follows:

There must be sufficient amount at bank for payment,

Date must be written correctly,

Amount words and figure should be equal,

Authorised signature must be correct on cheque etc.

 

Write in short about imprest system of petty cash book.

IMPREST SYSTEM OF PETTY CASH BOOK

Imprest means advance.

Under imprest system, advance money is given to petty cashier.

Generally, petty cashier takes money at the beginning period.

He spends small expenses form this money.

Expenses vouchers are checked by senior accountant at the end of period.

After checking the vouchers, senior accountant gives actual spent money to petty cashier.

 

Give a specimen of analytical petty cash book.

                                                          Analytical Petty Cash Book

Receipt	Date	Particulars	PCV	Total	Analysis Columns
					Postage	Fare	Wage	Stationery	Refreshment	Repair
		To Balance b/d
				*
		Total
*		To Balance b/d

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