Cash Book

₹2,650

Step 1: Under the Imprest System, the petty cashier is given a fixed amount (Imprest Amount) at the beginning of each period, here ₹3,000. Step 2: During the month, ₹2,650 is spent. The remaining balance is ₹3,000 - ₹2,650 = ₹350. Step 3: At the end of the month, the petty cashier presents his accounts to the Head Cashier. Step 4: The Head Cashier reimburses exactly the amount SPENT, i.e., ₹2,650. This brings the balance back to the full imprest amount of ₹3,000. Step 5: Option A (₹3,000) would give him more than the imprest amount. Option B (₹350) is the balance remaining, not the amount reim

Credit side of the respective accounts in the ledger

Step 1: The Cash Book itself acts as a Cash Account and Bank Account. No separate Cash or Bank Account is opened in the ledger. Step 2: When an entry appears on the Debit side of the Cash Book, it means cash/bank has been received FROM that account. Step 3: In double-entry bookkeeping, if cash (asset) is debited, the corresponding account must be credited. Step 4: Therefore, accounts appearing on the Debit side of the Cash Book are posted to the Credit side of their respective ledger accounts. Step 5: For example, Sales on the debit side of Cash Book → Credit side of Sales Account in ledger. O

Cash ₹12,000 (Dr); Bank ₹3,000 (Dr)

Step 1: Starting position — Cash ₹20,000 (Debit = favourable), Bank ₹5,000 (Credit = Overdraft). Step 2: ₹8,000 cash is deposited into the bank. This is a Contra Entry. Step 3: Cash decreases: ₹20,000 - ₹8,000 = ₹12,000 (still Debit/favourable balance). Step 4: Bank had an overdraft of ₹5,000 (Credit). Depositing ₹8,000 reduces the overdraft: ₹8,000 - ₹5,000 = ₹3,000. Since the deposit exceeds the overdraft, the bank now has a DEBIT (favourable) balance of ₹3,000. Step 5: Option C and D are wrong — they show bank still as credit/overdraft. Option B incorrectly adds cash instead of subtracting.

The entry affects both Cash and Bank columns and does NOT require posting to the ledger

Step 1: Contra Entries are transactions that affect both the Cash column and the Bank column of the same Cash Book. Step 2: Examples: Cash deposited into bank, Cash withdrawn from bank for office use. Step 3: Since the Cash Book itself serves as both Cash Account and Bank Account, posting a Contra Entry to the ledger would amount to double counting. Step 4: To mark that no ledger posting is needed, the letter 'C' (standing for 'Contra') is written in the L.F. (Ledger Folio) column on both sides of the entry. Step 5: Options A and D suggest incorrect posting requirements. Option B incorrectly d