Types of Cash Book: Single, Double, Triple Column & Petty Cash Book MCQs
MCQs on cashbook are essential for students preparing for school exams, competitive tests, or looking to strengthen their basic accounting foundations. Understanding the cash book helps track all cash transactions in a business, making it a vital part of practical accounts, entries, and exam preparation.
| Type of Cash Book | Description | Example Entry |
|---|---|---|
| Single Column Cash Book | Records only cash transactions | Cash received from sales: ₹5,000 |
| Double Column Cash Book | Records cash and bank transactions separately | Cheque deposited to bank: ₹2,000 |
| Triple Column Cash Book | Records cash, bank, and discount columns | Discount allowed on payment: ₹100 |
| Petty Cash Book | Tracks minor, repetitive expenses | Stationery purchased: ₹50 |
What is a Cash Book?
A cash book is a key accounting record that documents all cash receipts and payments made by a business. It serves as both a journal (for initial entries) and a ledger (as the final posting for cash transactions). Students commonly face MCQs on cash book because it tests both theoretical understanding and practical knowledge.
Types of Cash Book
There are four main types of cash books in accounting. Each serves a unique purpose and is tested in exams. Understanding each type helps students answer related MCQs confidently.
- Single Column Cash Book
- Double Column Cash Book
- Triple Column Cash Book
- Petty Cash Book
Single, Double, and Triple Column Cash Books
A single column cash book has only one amount column for cash. A double column cash book has separate columns for cash and bank transactions. The triple column cash book adds another column for discounts. These formats often appear in school and competitive exam MCQs.
Petty Cash Book
A petty cash book is used for recording small, day-to-day expenses such as postage, stationery, or tea. This cash book helps in controlling minor cash outflows and is a frequent topic in commerce test papers and MCQs.
Cash Book vs Cash Account
| Cash Book | Cash Account |
|---|---|
| Journal and ledger combined | Ledger only |
| Records every cash/bank transaction directly | Contains only summary or posting from journal |
| Has columns for date, particulars, ledger folio, etc. | Has only debit and credit side |
| Balances checked daily | Balances checked periodically |
MCQs on Cashbook
-
Which of the following is NOT a type of cash book?
a) Single column
b) Double column
c) Sales column
d) Triple column
Answer: c (Sales column is not a type of cash book.) -
The petty cash book is used to record:
a) Large investments
b) Minor day-to-day expenses
c) Credit transactions only
d) Asset purchases
Answer: b -
Which cash book records cash, bank, and discount?
a) Single column cash book
b) Double column cash book
c) Petty cash book
d) Triple column cash book
Answer: d -
In a cash book, the debit side represents:
a) Cash payments
b) Cash receipts
c) Credit purchases
d) None of the above
Answer: b -
Which of the following is a feature of a cash book?
a) Only records non-cash transactions
b) Acts as both journal and ledger
c) Summarizes profits only
d) Used for fixed assets recording
Answer: b
Solved Examples of Cash Book Entries
Let's see a sample entry in a single column cash book: If a business receives ₹10,000 as sales, this amount is recorded on the debit side of the cash book. If ₹2,000 is paid for rent, it appears on the credit side. Regular practice of such examples ensures accuracy in exams.
Importance of Cash Book in Exams and Business
MCQs on cashbook test a student’s ability to distinguish between types, spot errors, and manage real-life business scenarios. Understanding cashbook fundamentals is key for performing well in school boards like CBSE, and in exams like CA Foundation, SSC, and other accounting competitions. In business, the cash book supports clear cash management and can help identify errors early.
Related Commerce Resources
For more on related topics, visit these Vedantu resources:
- Single Column Cash Book
- Double Column Cash Book Format
- Petty Cash Book
- Kinds of Cash Books
- Ledger Accounts
- Accounting Process
- Subsidiary Books
At Vedantu, we simplify topics like cash book with clear explanations and practical examples. Practicing MCQs on cashbook helps students not only qualify exams but also master daily accounting records, making them stronger in both academics and real-world business.
In summary, understanding MCQs on cashbook gives students strong accounting basics, clarifies differences in cash books, and builds confidence for exams and professional applications. With regular practice and the right resources, mastering this topic becomes easier and more effective.
FAQs on Cash Book MCQs: Practice Questions & Solved Examples
1. What is a cash book and why is it important?
A cash book is a crucial accounting record detailing all cash transactions (receipts and payments). It's essential because it provides a chronological summary of cash inflows and outflows, facilitating accurate financial reporting and monitoring of cash flow.
2. What are the main types of cash book?
There are four primary types of cash books: A single column cash book records only cash transactions. A double column cash book separately records cash receipts and payments. A triple column cash book further segregates bank transactions. Finally, a petty cash book handles small, miscellaneous expenses.
3. How is the cash book different from the cash account?
While both track cash, a cash book is a subsidiary book recording individual transactions, acting like both a journal and a ledger. A cash account, part of the general ledger, summarizes the cash book's balances, showing the net cash position.
4. Why is the cash book called both a journal and a ledger?
The cash book functions as both a journal (recording transactions chronologically) and a ledger (summarizing balances). It records transactions as they occur and immediately summarizes the cash balances, eliminating the need for separate journal entries and posting to a cash account in the general ledger.
5. Who prepares the cash book in an organization?
Typically, a bookkeeper or accounting clerk maintains the cash book. In smaller organizations, this responsibility might fall to the business owner or a designated employee.
6. What is a cash book used for?
A cash book is used to record and summarize all cash transactions of a business. This allows for easy tracking of cash inflows and outflows, helping businesses manage their finances effectively and prepare financial statements accurately. It's a crucial component of the accounting process.
7. How is a cash book different from a cash account?
The cash book is a subsidiary book providing detailed records of all cash transactions. The cash account, found in the general ledger, summarizes the cash book's data. Think of the cash account as a summary of all the information found in the detailed cash book.
8. What are the rules of posting in a cash book?
Cash receipts are recorded on the debit side (left), and cash payments are recorded on the credit side (right), adhering to the basic double-entry bookkeeping system. The cash book's balance shows the net cash position.
9. Types of cash book in accounting?
Accounting uses several cash book types: single-column (simplest, records only cash), double-column (separate columns for receipts and payments), triple-column (adds a bank column), and petty cash book (small expenses).
10. Difference between single and double column cash book?
A single-column cash book only records the total cash transactions in one column. A double-column cash book provides separate columns for recording cash receipts and cash payments, providing a clearer view of cash inflows and outflows.
11. How do cash book errors impact final account preparation?
Errors in the cash book directly affect the accuracy of the trial balance and ultimately the final accounts (profit & loss account and balance sheet), leading to misstated financial performance and position. Careful recording and reconciliation are crucial.
12. Can electronic accounting systems replace traditional cash books in small businesses?
Yes, electronic accounting software can effectively replace traditional cash books for small businesses, offering features like automated reconciliation, improved tracking, and enhanced reporting capabilities. This can streamline accounting tasks and reduce manual errors.
13. In which cases is a triple column cash book essential?
A triple-column cash book is crucial when a business regularly handles both cash and bank transactions, as it allows for separate recording of cash, bank, and discount transactions in one book, thus simplifying the reconciliation process.
14. Why do exam MCQs often test distinctions between petty and main cash book?
MCQs frequently highlight the differences between petty cash books (for small, frequent expenses) and main cash books (for significant transactions) because understanding their distinct roles and recording methods is vital for comprehending the complete cash flow of a business and mastering accounting fundamentals.
15. How do reconciliation statements relate to cash book MCQs?
Bank reconciliation statements are often examined in MCQs alongside cash books. This is because reconciling the bank statement with the cash book is a vital skill that identifies discrepancies and ensures the accuracy of financial records, testing students’ ability to understand cash book entries and bank transactions.
