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Poa T - 2

1. The cash book is a book of prime entry that records all cash and bank transactions of a business. It is prepared in a three column format with separate columns for cash, bank, and discounts. 2. Cash discounts are deductions given for early or prompt payment, while trade discounts are deductions from the listed price of goods. 3. The transactions are entered in the cash book and posted to the relevant ledger accounts. The cash and bank balances are brought down at the end of the period.

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SHEVENA A/P VIJIAN
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70 views3 pages

Poa T - 2

1. The cash book is a book of prime entry that records all cash and bank transactions of a business. It is prepared in a three column format with separate columns for cash, bank, and discounts. 2. Cash discounts are deductions given for early or prompt payment, while trade discounts are deductions from the listed price of goods. 3. The transactions are entered in the cash book and posted to the relevant ledger accounts. The cash and bank balances are brought down at the end of the period.

Uploaded by

SHEVENA A/P VIJIAN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tutorial 2 Cash Cycle 1 LTJ 2022

Tutorial 2 – The Cash Cycle 5


1 Todds paid for the amount owing by cheque, less 5% discount (calculate
Section A: 6 the amount)
2 Withdrew cash for own use RM120
1. (a) What is the difference between cash and credit transactions? 0
2 Purchased goods with office cash RM28
(b) What is the difference between trade discounts and cash discounts? 4
2 Paid Zen & Co a cheque in full settlement of the amount owing, less 5%
(c) What are the different types of cash in a business? Briefly explain. 5 discount (calculate the amount)
2 Sold goods on credit to Tali RM450
2. (a) What is the purpose of preparing a three column cash book? Briefly 6
explain its format. 2 Paid transport by cash RM10
8
(b) Why is the cash book both a book of prime entry and ledger account? 3 Transferred cash from office to bank RM400
Explain. 0
3 Credit purchase from Zen & Co RM300
(c) What is an overdraft? How does it work? 0
3 Refund cash to Todds for returning empty containers for recycling RM5
3. Explain what is an imprest system? How does it work? 1
3 Bought office furniture, paid by cheque RM200
4. The following are the transactions of Axis Trading in May: 1
3 Paid Samuel a cheque in settlement of outstanding invoice of RM700 and
May 1 deducting RM35 cash discount
1 Start a business with Cash in hand RM800 and Cash at bank RM1,000 3 Receive a cheque from Kenneth RM475 after deducting RM25 cash
2 Purchased goods by cheque RM400 1 discount
2 Paid rates to Dewan Bandaraya Kuala Lumpur by cheque RM40
Required:
4 Bought goods on credit from Zen & Co RM200
(a) Enter the above transactions in a three-column Cash Book and close the
8 Sold goods to Todds on credit RM300 Cash Book at the end of May (ignore those transactions that do not
9 Cash sales RM80 involve the Cash Book).
1 Paid transport by cash RM12
0 (b) Post those items involving the Cash Book to the appropriate ledgers .
1 Credit sales to Todds RM300
3
1 Paid for stationery in cash RM16
4
1 Introduced further capital RM1,000 by cheque
Tutorial 2 Cash Cycle 2 LTJ 2022

Section B: Extra exercise questions (for students’ own practice) 2 Withdrew cash of RM330 from bank for office use
9
Question 1 3 Received cheque from Kenny RM475 after deducting RM25 cash
0 discount
Maxwell buys and sells machinery. During the month of March, the 3 Received cheque from Donny RM722 after deducting RM38 cash
following receipts and payments occurred. 0 discount
3 Paid Sammy a cheque in settlement of outstanding invoice of RM700, and
March 1 deducting RM35 cash discount
1 Balances as per Cash Book: Bank RM2,100; Cash RM1,010 3 Paid Gracey a cheque in settlement of outstanding invoice of RM360, and
3 Cash sales paid into bank RM620 1 deducting RM18 cash discount
4 Cash purchases RM380
6 Paid an electricity bill of RM660 by cheque
3 Received a cheque from Joy for RM1,254 after deducting cash discount of
9 Sales by cheque RM530 1 RM66. However, the cash discount was wrongly deducted (not allowed).
1 Drew a cheque for RM400 in respect of wages Joy needs to pay up for the shortfall of RM66 very soon.
0
1 Cash sales RM440 Required:
2 (a) Enter the above transactions in a three-column Cash Book and close the
1 Paid RM190 in cash for travelling expenses Cash Book at the end of March (ignore those transactions that do not
5 involve the Cash Book).
1 Paid water bill by cheque RM560
6 (b) Post those items involving the Cash Book to the appropriate ledgers.
1 Drawings by cheque RM300
9
2 Purchases by cheque RM470
0
2 Paid postage of RM30 in cash
1
2 Paid cash of RM450 into the bank
2
2 Introduced further capital of RM650 by cheque
4
2 Purchased a delivery vehicle for RM4,000 and paid by cheque
5
2 Received a cheque for RM3,500 from Morris as a three year loan
6
2 Paid road tax and insurance on delivery vehicle of RM430 in cash
8
Tutorial 2 Cash Cycle 3 LTJ 2022

Question 2
Required:
Vincent K is a sole trader who records all his cash and bank transactions in a (a) State three (3) purposes for preparing a Cash Book.
three-column Cash Book. On 1 August, his cash in hand was RM68 but he
had a bank overdraft of RM1,692. (b) Define the two (2) types of cash discounts in the 3-column Cash Book
and the purpose of a cash discount.
The following are her transactions for the month of August:
(c) Draw up the 3-column Cash Book of Vincent K for the month of
August August. Balance up the cash and bank columns, bringing down the
2 Received a cheque of RM160 from Patrick in full settlement of a debt of balances at 1 September.
RM168
1 Cash sales paid directly to bank RM2,086 (d) Total up the two discount columns and post the amounts to the relevant
0 accounts in the General Ledger.
1 Drew a cheque RM75 in favour of Winifred Engineering, in settlement of
2 an outstanding debt
1 Paid RM35 cash for stationery
4
1 Paid Frederick Sung the sum of RM86 by cheque in settlement of an
6 amount owed to him of RM90
1 Drew a cheque for office cash RM150
8
2 Cash sales RM1,120; cash kept in the office safe
0
2 Received interest of RM60 and paid this into the bank
1 The sales of the previous day were also banked in
2 Paid telephone charges by cheque RM147
4
2 Received a cheque of RM704 from Benny Chan in settlement of his
6 account amounting to RM720
2 Paid RM40 out of cash for office expenses
8
3 Paid RM254 to Larry Heng by cheque in full settlement of the RM270
0 balance on his account
3 The bank notified Vincent K that it had charged RM20 bank charges to his
0 account

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