bool and brs

Cash book and bank reconciliation statement

Chapter # 3
Define Subsidiary book?
some transactions which are of repetitive nature which need to record separately, So journal is subdivided
into different journal known as subsidiary books
Important subsidiary books

Cash book: it is used to record all cash receipts and payments Receipts are recorded on Debit side and
Payment on Credit side.
Purchases book: It is used to record all credit purchases
Sales book: It is used to record all credit sales
Purchases return book: It is used to record all goods return by us to supplier
Sales return book: It is used to record all goods return to us by our supplier.
Bill receivable book: It is used to record all accepted bills received us
Bill payable book: It is used to record all bill accepted by us to our creditors
Journal proper: It is used to record all those transitions for which there is no separate book
Define vouchers?
Answer: Vouchers are documents containing evidences of payments and receipts.
How many kinds of cash book?
Answer:
There are three types of cash books
Single column cash book: which is used to record cash receipts and payments.

Double column cash book: which has two column on both sides of cash. One is to record cash
and other is to record banking transaction.

Triple column cash book which has three columns on both sides of cash. One is to record cash
Second is to record banking transaction and thirds is for discount
What is contra entry?
A transaction in which cash account and bank account are involved is recorded on both sides of cash
book.
Single column cash book
Dr
Cr

Date

Particula
r

V.n

L.F

Amoun
t
( cash )

Date

Particula
r

V.n

Date Particula
r

V.n

Double column cash book

Dr

Dat
e

Particular V.n

L.F

Amoun
t
( cash )

Cr

L.
F

Discount Cas
h

L.F Discun
t

Cash

Triple column cash book

Dr

Dat
e

Particula V.
r
n

L.
F

Cr

Discou
nt

Cas
h

Ban
k

Dat
e

Particula V.
r
n

L.
F

Discou
nt

Cas
h

What is a petty cash book?

Answer: The book in which small payments which are not convenient to record in the main cash book the
record is called petty cash book.
Imprest system
Under this system the total petty expenses for particular period are estimated and that amount is advance
by the cashier.

B.R.S
What is bank reconciliation statement?
Bank reconciliation statements a statement which contains a complete and satisfactory explanation of
differences in balance as per the cash book and bank statement
What is pass book?
Issued by a bank to record deposits, withdrawals and balance in Account holder account
Define bank statement?
A summary of customers account is sent by bank periodically or on the request to know about
transactions with bank
Unpresented Cheque
Cheques which have been issued for payment but may not be presented to bank by the creditor.
Uncredited cheque
Cheques which have been received from customer and deposited into bank but may not have been
credited by bank
Balance as per cash book (Dr)
Add (Dr)
Issued but not presented/ drawn but not cashed
Directly deposited by Customer into bank
Dividend received, interest received, commission received, Cash realized
Wrongly credited by Bank/ credited by bank
Interest on deposit/ interest on investment
Less (Cr)
Received but not credited/ UN collected/ omitted to sent to bank
Directly paid by bank
Bank charges, bank commission/ cheques dishonored.
Wrongly debited by bank/ debited by bank
Interest on overdraft

Ban
k

capital and revenue

Chapter # 5
revenue

Define capital Transactions?

Transactions having long term effect are known as capital transactions. Like purchase of Building
What are revenue transactions?
Transactions having short term effect are known as revenue transactions. Like payment of Salaries
What do you mean by capital expenditures?
Expenditures incurred on acquiring fixed assets and having Long term effect are known as capital
Expenditure. Like expenditure on purchase of Building, Land and Furniture
Describe the revenues expenditure
All the expenditures which are incurred in the day to day conduct and administration of a business and
have short term effects Like, purchases of stationery, payment of salaries
Give any three examples of capital expenditures
Addition or extension of assets

Wages paid for the construction of building

Premium given for lease

Give the three examples of revenue expenditures

Wages paid to factory workers

Bad debt

Stationery

Capital and

Describe the deferred revenue expenditures?

Revenue expenditure benefits of which is likely to more than one year but it is non recurring by nature are
called deferred revenue expenditure
Give examples of deferred revenue expenditures?
Preliminary expenses
Heavy expenditures on advertisement for making the new product.
Define capitalized expenditures?
Some revenue expenditure are connected with fixed assets and are full added to cost of that assets
whatever is the amount. Like repairs of newly purchased machinery
What are capital receipts?
Receipts which are non recurring by nature, received from Sale of fixed assets are known as capital
Receipts. Like Receipts from sale of of Building, Land and Furniture
What are revenue receipts?
Receipts which are recurring by nature receive from the day to day conduct and administration of a
business and have short term effects Like inertest received, Discount Received
What is capital payment?
Payments which are non recurring by nature, incurred on acquiring fixed assets and having Long term
effect are known as capital Payment. Like Payment for purchases of Building, Land and Furniture
What is revenue payment?

Payments which are recurring by nature which are incurred in the day to day conduct and administration
of a business and have short term effects
What do you mean by capital profit?
Capital profit is a profit which is earned on the sale of a fixed asset for example a machinery worth of Rs.
10000 is sold for Rs. 15000. the profit is 5000/- is capital profit.
What do you mean by Revenue profit?
Revenue profit is a profit which is earned during the day to day course of business is called revenue profit
is a regular Profit.
What is capital loss?
The loss suffered by a business on the sale of a fixed asset or it incurred or raising capital or a joint stock
company. for example a machinery worth of Rs. 10000 is sold for Rs. 8000. the Loss is 2000/- is capital
Loss.
What is revenue loss?
Revenue Loss is a Loss which is earned during the day to day course of business is called revenue loss