Competitive MCQs (Commerce): Petty Cash Book-I

 

A. Tick the correct answer:

Q. 1. A cash book that is used to record the small payments of cash is generally referred as

(a)	Simple Column Cash Book		(c)	Tree Column Cash Book
(b)	Two Column Cash Book		(d)	Petty Cash Book

 
Q. 2. Which of the following is both a book of prime entry and a part of the double entry system?

(a)	Ledger		(c)	Journal
(b)	Day Books		(d)	Petty Cash Book

 
Q. 3. Petty cash book is actually a

(a)	Ledger		(c)	Journal
(b)	Trial Balance		(d)	Balance Sheet

 
Q. 4. Petty cash A/c is actually a

(a)	Personal A/c		(c)	Real A/c
(b)	Nominal A/c		(d)	None of these

 
Q. 5. The scientific system of petty cash is

(a)	Double entry system		(c)	Single entry system
(b)	Imprest system		(d)	Budgetary control system

 
Q. 6. Petty cash book records

(a)	Prepaid expenses		(c)	Petty expenses
(b)	Outstanding expenses		(d)	All type of expenses

 
Q. 7. Petty cash book is

(a)	A complementary to main cash book		(c)	A substitute to main cash book
(b)	An alternative to main cash book		(d)	An opposite to main cash book

 
Q. 8. Petty cashier receives money from

(a)	Owner		(c)	General cashier
(b)	Different sources		(d)	Bank

 
Q. 9. All petty cash receipts are primarily recorded in

(a)	Main Cash Book		(c)	Ledger
(b)	Journal Proper		(d)	Petty Cash Book

 
Q. 10. If petty cash book is maintained, the account not to be prepared in the ledger is

(a)	Main Cash A/c		(c)	Total Cash A/c
(b)	Petty Cash A/c		(d)	Cash and Bank A/c

 
Q. 11. The balance of petty cash book is

(a)	Liability		(c)	Profit
(b)	Surplus		(d)	Asset

 
Q. 12. From where the receipts in petty cash book comes

(a)	General cashier		(c)	Outside cash
(b)	Main fund		(d)	None of these

Q. 13. Petty cash fund supposed to be replenished

(a)	Every day		(c)	Every year
(b)	Every half day		(d)	At the end of every accounting period

 
Q. 14. In which book the small payments in respect of postage, carriage, stationery etc. are recorded on daily basis?

(a)	Petty cash book		(c)	Sales day book
(b)	Cash book		(d)	Purchases day book

 
Q. 15. Balance of petty cash book shall always be

(a)	Debit		(c)	Zero
(b)	Credit		(d)	Debit or zero

 
Q. 16. Petty Cash Book records

(a)	Petty cash receipts		(c)	Both petty cash receipts and payments
(b)	Petty cash payments		(d)	All cash receipts and payments

 
Q. 17. Petty Cashier receives cash from

(a)	Sale		(c)	Own fund
(b)	Budget		(d)	Main cashier

 
Q. 18. Which of the following statements is not a benefit of an imprest system?

(a)	It provides a control system which ensures that the transactions in the cash book are corrected to match those in the bank statements		(c)	It deters theft of cash by the petty cashier
(b)	It facilitates control of the total petty cash expenditure in each period		(d)	It ensures that the petty cash book is kept written up to date

 
Q. 19. Where the petty cashier is reimbursed the same amount as he disburses in the previous period, the system is called

(a)	Cash system		(c)	Analytical system
(b)	Imprest system		(d)	General system

 
Q. 20. Debiting the petty cash book with the exact amount spent in the previous period is an example of

(a)	Prudence		(c)	Imprest system
(b)	Going concern		(d)	Contra entry

 
Q. 21. Under which system, columnar form for various expenses are maintained in the petty cash book?

(a)	Imprest system		(c)	Cash system
(b)	Analytical system		(d)	Bank system

 
Q. 22. The fixed amount of petty cash to be maintained at the beginning of each imprest period under imprest petty cash system is

(a)	Imprest cash		(c)	Rs. 1,500
(b)	Main cash		(d)	Rs. 2,000

 
Q. 23. What is the nature of petty cash?

(a)	Income		(c)	Capital
(b)	Expenses		(d)	Liability

Q. 24. The closing balance of petty cash book is considered as

(a)	Asset		(c)	Income
(b)	Expenses		(d)	Liability

 
Q. 25. The Petty Cash Book should always indicate

(a)	Debit balance		(c)	Any one of both balance
(b)	Credit balance		(d)	No balance

 
Q. 26. In which type of cash book, imprest system belongs?

(a)	Single column cash book		(c)	Treble column cash book
(b)	Double column cash book		(d)	Petty cash book

 
Q. 27. The imprest system float is Rs. 100. During the month the petty cashier purchases tea for Rs. 8, pays travel expenses of Rs. 35, purchases sundry stationery worth Rs. 18 and purchases postage for Rs. 28.
How much reimbursement will be required at the end of the month?

(a)	Rs. 100		(c)	Rs. 11
(b)	Rs. 89		(d)	None of the above

 
Q. 28. A firm does not operate an imprest system. The petty cashier tells you that at the start of the month there was Rs. 15 cash in the cash box. He also tells you that on the 5^th he took Rs. 50, on the 11^th he took Rs. 60 and on the 22^nd he took Rs. 100 cash from the shop till. During the month the cashier purchases tea for Rs. 8, pays travel expenses of Rs. 35, purchases sundry stationery worth Rs. 18, purchases milk for Rs. 28, purchases stamps for Rs. 36, pays for the laundry of the kitchen tea towels of Rs. 58 and pays for biscuits Rs. 12. How much is in petty cash at the end of the month?

(a)	Rs. 5		(c)	Rs. 30
(b)	Rs. 15		(d)	None of these

 
B. Fill in the blanks:

Q. 29. The most common imprest system is the ____________________ system.
Q. 30. Only __________________________ are recorded in the Petty Cash Book.
Q. 31. The scientific system of maintaining Petty Cash Book is _______________
Q. 32. The balance in Petty Cash Book is always ______________________
Q. 33. The term imprest system is used in relation to _______________
 
C. Indicate whether the following statements are TRUE AND FALSE:

Q. 34. Petty cashier receives cash from sales.
Q. 35. The petty cashier generally works on imprest system.
Q. 36. An imprest system is a system whereby cash expenditure within a set period is replenished from the bank once in each period to a float target.
Q. 37. Balance in Petty Cash Book indicates an asset.
 
 
Answer:

A.
1.	d	7.	a	13.	d	19.	b	25.	a
2.	d	8.	c	14.	a	20.	c	26.	d
3.	c	9.	a	15.	d	21.	b	27.	b
4.	c	10.	b	16.	b	22.	a	28.	c
5.	b	11.	d	17.	c	23.	b
6.	c	12.	a	18.	a	24.	a

 

B.
29.	petty cash
30.	cash payments of smaller amount
31.	imprest system
32.	debit
33.	petty cash book

 

C.
34.	F
35.	T
36.	T
37.	T