Important Questions for CBSE Class 11 Accountancy Chapter 4 – Recording Of Transactions 2

Important Questions Class 11 Accountancy Chapter 4 – Recording of Transactions II (Financial Accounting – I)

Accountancy is a crucial subject for both the 11th and 12th Classes. Students need to understand the concepts and apply them correctly while solving numerical questions. Thorough knowledge of the basic principles and practices will serve as a  stepping stone toward a successful career in Accounting. Chapter 4 for Class 11 Accountancy is about Recording of Transactions II (Financial Accounting – I) and gives a step-by-step method in the Accounting process, i.e. recording transactions in a specific journal. Students must go through the Important Questions Class 11 Accountancy Chapter 4 as this chapter covers the subdivisions of the journal into which transactions of similar nature are recorded. It also sheds light on preparing cash books, petty cash books, and special purpose books and posting them into the ledger accounts. 

Important Questions of Cash Book Class 11 will help them to learn with a proper understanding of various transactions, and the special purposes of books such as cash books, purchases books, return books, etc, putting them in the ledger will give them more clarity about the purposes with concrete examples. Complete knowledge and their applications will give students added confidence to answer any question without ambiguity. Furthermore, they will know how to answer similar questions in the subsequent chapters while preparing for their examinations to score 100% and set the benchmark. st. 

Creating a solid foundation in concepts and solving numerical where Accountancy is considered necessary.  At Extramarks, we completely understand the importance of practicing such questions. For this purpose, Extramarks picks crucial questions from various sources such as NCERT books, NCERT Exemplar, other reference books, past years’ question papers, and so on to prepare a repository based on NCERT books that is aligned with CBSE guidelines. The accountancy subject experts have created step-by-step solutions so that students can learn important points easily and make them revise quickly with the help of Important Questions Class 11 Accountancy Chapter 4 and to give 100% performance in their examinations and create their first milestone.

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Important Questions of Cash Book Class 11 Accountancy Chapter 4 with Solutions

To help the students maximize their potential, Extramarks has curated a list of Chapter 4 Class 11 Accountancy Important Questions that covers questions from various crucial topics that are in the chapter. The step-by-step solutions are conveyed in a straightforward manner so that students can understand, recall and apply their knowledge without much difficulty.

 A list of   Important questionnaires with answers from Class 11 Accountancy Chapter 4 is given below:  .

Question 1. Cash purchase of goods is recorded in-

• Purchase Book
• Sales Book
• Cash Book
• None of these

Answer 1: (c) Cash Book

Explanation: Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.

Question 2. What is the subdivision  of a journal?

Answer 2: As the business expands, it might get a little challenging to record all the entries in a single book, i.e. journal. And as many transactions become repetitive, It becomes more accessible to then record transactions of similar nature in separate special books. For example, all cash transactions can be recorded in one book; all credit transactions can go in one book, all purchase transactions in one book, and so on. These special books are called day books or subsidiary books. 

Question 3. State the following questions as  true or  false:

• More than one credit account and a single debit account in an entry is known as a compound entry.
• Subsidiary book is also known as a ledger.
• Credit purchase of machinery is entered in purchase book

Answer 3: 

1. True. This entry is  regarded  as a compound entry as it involves  more than 2 accounts.
2. False. Subsidiary books are a set of intermediary accounts linked to the ledger.
3. False. Purchase of machinery should be recorded in a journal with a proper account.

Question 4. Write the process of preparing a ledger from a journal.

Answer 4: The process of preparing a ledger account can be understood with the help of an example. Let us suppose a Machinery is purchased from Mr X, so the journal entry for the same would be;

           Machinery A/c …Dr.

                   To Mr X A/c

In the above journal entry, Machinery A/c is debited, and Mr X A/c is credited. The steps for preparing a ledger account would then be as follows

For the account which is debited

• Identify the account that is debited in the journal entry. In our example, it is the machinery account.
• In the ‘Machinery A/c’, enter the date in the ‘Date’ column on the account’s debit side.
• On the debit side of the account, in the ‘Particulars’ column, enter ‘Mr. X’ (which was credited)
• In the Journal Folio or ‘J.F’ column, add the page number where the entry is mentioned in the journal
• In the ‘Amount’ column, add the corresponding amount of the journal entry.

For the account which is credited

• Identify the account that is credited in the journal entry. In our example, it is the ‘Mr X.’ account.
• In the ‘Mr. X.’ enter the date in the ‘Date’ column on the credit side of the account.
• In the debit side of the account, in the ‘Particulars’ column, enter ‘Machinery A/c’ (which was credited)
• In the Journal Folio or ‘J.F’ column, add the page number where the entry is mentioned in the journal.
• In the ‘Amount’ column, add the corresponding amount of the journal entry.

Question 5. Give the meaning of the following terms

• Sales journal
• Purchase journal
• Journal
• Petty cash book

Answer 5: 

1. Sales Journal: Sales journal exclusively records all credit sales transactions.
2. Purchase Journal: Purchase journal records all the transactions of credit purchases.
3. Journal: Journal is referred to as books of original entry where all initial transactions are recorded.
4. Petty Cash Book: Petty cash book is used to record all the small cash transactions that occur in a business for a particular period.

Question 6. What is the difference between a trade discount and a cash discount?

Answer 6: The following are the differences between trade discount and cash discount;

Question 7.  Explain the Debit and Credit note in five sentences.

Answer 7: 

Debit Note: A debit note is prepared when the buyer returns goods to the supplier. It contains the name of the party to whom the goods are returned and the details for which the goods were returned. Every debit note will have a serial number and a date.

Credit Note: A credit note is prepared by the supplier when goods are returned to them by the buyer. The credit note contains the customer’s name and other details such as the goods received and the amount. Every credit note will have a date and a serial number.

Question 8.  Write the difference between return inwards and return outwards.

Answer 8: The difference between return inwards and return outward is mentioned below:

Question 9. Record the following transactions during the week ending Dec.30, 2014,

with a weekly, imprest Rs. 500.

2017 `

January

24           Stationery                                         100

25           Bus fare                                               12

25           Cartage                                                40

26           Taxi fare                                               80

27           Wages to casual labour                    90

29           Postage                                                80

Answer 9:                                                                        Petty Cash Book

Question 10. Enter the following transactions into cash book for the month of Jan 2018

• Cash received from Ravi 4,000 
• Rent Paid in cash 2,000 
• Purchased goods from Mahesh for cash 6,000
• Sold goods for cash 9,000

Answer 10:   Cash book for the month of Jan 2018

Dr.         Cr.

Working Notes:

Journal

Question 11. What is a petty cash book? Write the advantages of petty cash books?

Answer 11: Recording repetitive transactions in smaller denominations can be burdensome on the cash book; hence a separate book known as the ‘Petty Cash Book’ is created for the purpose of recording transactions of this nature. Examples of petty cash expenses include stationery, postage, conveyance, refreshments, etc. A petty cashier maintains a petty cash book.

The system of preparation for the petty cash book is the Imprest system. Under this system, the petty cashier receives a certain sum of money for a period; post the exhaustion of the funds, they are reimbursed so that they may have the same amount as in the starting period.

Advantages of Petty Cash Book:

1. Avoid bulky cash books: By maintaining a petty cash book, the cash book is not burdened with transactions of repetitive nature, and small denominations make the cash book less bulky.
2. Division of labour: The handling of petty cash expenses is delegated to the Petty Cashier; hence there is a division of labour, and the main cashier can work efficiently in the more essential areas.
3. Prone to less error: The petty cash goes through regular audits so that it is prone to fewer errors and inefficiencies.
4. Simple method: The method of recording transactions is pretty simple in a petty cash book. There are separate heads under which each petty expense can be placed. Also recording transactions in a petty cash book does not require formal knowledge of all accounting principles and techniques.

Question 12. What is a cash book? Explain the types of cash books.

Answer 12: A cash book is a book of original entries where all cash-related transactions are recorded, i.e. cash receipts and cash payments. Cash deposits and withdrawals are all recorded in sequential order. There are two columns on either side of the cash account of cash and bank, so all cash-related transactions are recorded in the cash column, whereas all bank-related entries go in the bank column. For example, cash sales by the business will be recorded in the cash column on the debit side, but payments made to creditors via cheque will be recorded in the bank column on the credit side of the cash account.

Cash Book

Dr.         Cr.

Types of cash books:

Types of cash books:

• Single Column Cash Book:

In a Single Column Cash Book, only cash-related transactions are recorded. It is helpful for enterprises that only maintain cash transactions. It has records of cash receipts and cash payments. 

• Double Column Cash Book:

The Two Column Cash Book is more commonly referred to as the Double Column Cash Book. It contains two columns of cash on either side, i.e. debit and credit. One side is used to record cash transactions, and one side is used to record bank transactions. 

Cash transactions are recorded in the cash column, and bank transactions relating to cheque  deposits and payments made by cheques are recorded in the bank columns. Some organisations prefer the double column cash book as it contains both the cash and the bank account, thus eliminating the need for two separate ledgers.

• Triple Column Cash Book:

As the name suggests, a Triple Column Cash Book consists of three columns: cash, bank and discount. It is mostly used by those organisations that have large operations and conduct transactions in both cash and through banks while also giving discounts. The process of recording transactions is similar to a double-column cash book; the cash and bank columns are totalled periodically while the bank column is just totalled. The discount given to creditors is recorded on the debit side, while the discount received from creditors is recorded on the credit side.

• Petty Cash Book:

A Petty Cash book is used to record transactions that are not of very high value to the business. There is an opening credit balance, which is the amount put aside for petty cash expenses. Transactions relating to stationery, postage and stamps, daily wages, etc., are recorded in the petty cash book. 

Question 13. Prepare double column cash book from the following transactions for the year August 2017:

01 Cash in hand 17,500

      Cash at bank 5,000

03 Purchased goods for cash 3,000

05 Received cheque from Jasmeet 10,000

08 Sold goods for cash 7,000

10 Jasmeet’s cheque deposited into bank

12 Purchased goods and paid by cheque 20,000

15 Paid establishment expenses through bank 1,000

18 Cash sales 7,000

20 Deposited into bank 10,000

24 Paid trade expenses 500

27 Received commission by cheque 6,000

29 Paid Rent 2,000

30 Withdrew cash for personal use 1,200

31 Salary paid 6,000

Answer 13:                                                                    Cash Book                                                              

Dr.                                                                                                                                                                                  Cr.

Benefits of Solving Cash Book Class 11 Extra Questions

Accountancy can appear to be difficult at first, but with the proper understanding and practice, students can find this subject quite interesting when it comes to solving numerical questions. When students have a good hold over passing journal entries and posting them into ledger accounts, then subsequent  chapters would not feel difficult at all. Solving important questions Class 11 Accountancy Chapter 4 will help students get that confidence in passing journal entries, recording them in special purpose books and then finally posting them into ledgers.

 Following are the benefits of solving Important Questions Class 11 Accountancy Chapter 4:

1. Practising important questions from chapter 4 in Accountancy will help students ace their examinations and get better results.
2. The step-by-step solutions are prepared by subject matter experts with years of experience to provide  credible study material based on the NCERT books which is complete in every way and students need not look elsewhere for any other resources.  Hence, students can rely upon and trust these solutions completely.
3. The important questions are prepared  keeping  in mind the CBSE syllabus and guidelines, which can give a  thorough  revision of the entire chapter. These resources  are reliable and accurate. In fact these resources are the best study material for getting a 100% score and creating your first milestone in  high school. 
4. That’s not enough, many questions in the competitive exams are taken from NCERT books so these resources are definitely going to pay you in the long run. Practice, practice and practice. Practicing from the Important Questions Class 11 Accountancy Chapter 4 will speed up your learning and revision from various sample papers will boost their performance naturally and effortlessly. 

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