No verified paper has been uploaded for AJKPSC-PMS Paper Accountancy & Auditing 2008 MCQs yet.
The MCQs below are drawn from the Accountancy & Auditing subject category.
Showing 4251–4260
of 4621 MCQs
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4251
What is the significance of the 'NSF' notation on a check returned by a bank?
NSF stands for 'Non-Sufficient Funds'. This notation indicates that the drawer of the check does not have enough money in their bank account to cover the amount specified on the check at the time it was presented for payment. Consequently, the bank refuses to process the payment, and the check is returned to the payee as dishonored.
4252
What is the implication of a bank returning a check marked with the notation 'NSF'?
The acronym 'NSF' stands for 'Non-Sufficient Funds'. When a bank marks a check as NSF, it indicates that the account holder's current available balance is lower than the amount specified on the check. Consequently, the bank refuses to process the payment, and the check is dishonored, often resulting in fees for the account holder.
4253
What is the implication when a bank returns a cheque marked as 'NSF'?
The acronym 'NSF' stands for Non-Sufficient Funds. When a bank marks a cheque with this status, it indicates that the account holder's available balance is lower than the amount specified on the cheque. Consequently, the bank refuses to process the payment, and the cheque is dishonored. This often results in penalty fees for the account holder.
4254
Where should a business record a customer's cheque that has been returned by the bank as dishonoured?
When a cheque previously deposited is dishonoured, the entry must be reversed. Since the original receipt was recorded in the bank column of the cash book, the reversal of the dishonoured cheque is also recorded in the credit side of the bank column of the cash book to reflect the reduction in the bank balance.
4255
Which type of entry is recorded in the cash book but does not require a separate posting to the ledger?
A contra entry involves transactions between cash and bank accounts within the same book. Because both accounts are maintained within the cash book itself, these entries do not require further posting to the general ledger, as the ledger accounts are effectively updated via the cash book.
4256
Where is a contra entry recorded within the accounting books?
A contra entry occurs when a transaction affects both the cash and bank columns of the Cash Book simultaneously, such as depositing cash into the bank or withdrawing cash for office use. Because these entries involve both sides of the same book, they are recorded only in the Cash Book and do not require a separate ledger posting.
4257
When an identical amount is recorded on both the debit and credit sides of the same account, what is this transaction type called?
A contra entry occurs when a transaction affects both the cash and bank accounts simultaneously within the books of account. By recording the amount on both sides of the ledger or cash book, the net effect on the total cash and bank balance is adjusted without changing the overall liquidity position of the business.
4258
What is the term for an accounting entry recorded on both the debit and credit sides of a cash book?
A contra entry occurs when a transaction affects both the cash and bank columns of a double-column or triple-column cash book. Because the transaction involves moving funds between these two accounts, it is recorded on both sides, effectively canceling out the net impact on the total cash position.
4259
In which accounting record does a contra entry appear on both the debit and credit sides simultaneously?
A contra entry occurs in a double-column or triple-column cash book when a transaction affects both cash and bank accounts simultaneously, such as depositing cash into the bank or withdrawing cash from the bank for office use. This entry is recorded on both sides to maintain the integrity of the cash and bank balances.
4260
In which type of cash book are contra entries recorded to reflect the transfer of funds between cash and bank accounts?
Contra entries occur when a transaction affects both the cash and bank columns simultaneously, such as depositing cash into a bank or withdrawing cash for office use. This requires a double-column cash book (containing both cash and bank columns) to record the dual effect in a single ledger.
