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Books of Prime Entry and Ledgers
Quick questions on The cash book explained: O-Level Principles of Accounts
6short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the cash book is two things at once?Show answer
The cash book records all receipts and payments of cash and through the bank. It is:
What are posting the discount columns?Show answer
The discount columns are not part of the cash book's double entry; they are memoranda. Their totals are posted:
What are contra entries?Show answer
When cash is paid into the bank or drawn from it, both halves are in the cash book, so each is a contra, marked C (credit Cash, debit Bank, or the reverse).
What is q1?Show answer
State on which side of the cash book receipts are entered, and on which side payments are entered. [2 marks]
What is q2?Show answer
A customer settles a \500\ for prompt payment. State the discount and how it is classified. [2 marks]
What is q3?Show answer
Explain why a trade discount does not appear in the cash book. [2 marks]
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