Posting from Cash Book to Ledger MCQs Quiz | Class 9
Test your knowledge of Accountancy with this quiz for Class 9 students. This quiz covers Unit 6: Recording and Posting of Cash Transactions, focusing on key concepts like Cash a/c balance, personal accounts posting, and discount accounts posting basics from the subject Elements of Book-Keeping & Accountancy (Code 254). Attempt all questions and submit to see your score, then download the PDF of your answers for revision.
Understanding Posting from Cash Book to Ledger
After recording transactions in the Cash Book, the next crucial step in the accounting cycle is posting these entries to the respective accounts in the Ledger. The Cash Book acts as both a book of original entry (journal) and a book of final entry (ledger) for cash and bank transactions. This section will help you understand the fundamental principles of posting from the Cash Book.
Key Principles of Posting
The core rule of posting from the Cash Book is based on the principles of double-entry bookkeeping. Since the Cash Book already handles the cash aspect of transactions, posting is done to complete the second aspect in the ledger.
- Posting from the Debit (Receipts) Side: All entries on the debit side of the Cash Book represent receipts of cash. When posting to the ledger, the corresponding accounts are credited. For example, if cash is received from a customer named ‘Arun’, ‘Arun’s Account’ in the ledger will be credited.
- Posting from the Credit (Payments) Side: All entries on the credit side of the Cash Book represent payments of cash. When posting to the ledger, the corresponding accounts are debited. For example, if rent is paid in cash, the ‘Rent Account’ in the ledger will be debited.
Posting Personal and Nominal Accounts
1. Posting from the Debit Side (Receipts)
When an amount is received, it is recorded on the debit side of the Cash Book. The posting is then made to the credit side of the account from whom the cash is received.
Example: “Received Rs. 5,000 from Rohan.”
- In Cash Book: It is recorded on the Debit side as “To Rohan’s A/c”.
- In Ledger: Go to ‘Rohan’s A/c’. On the credit side, write “By Cash A/c” and enter the amount Rs. 5,000.
2. Posting from the Credit Side (Payments)
When a payment is made, it is recorded on the credit side of the Cash Book. The posting is then made to the debit side of the account to whom the payment is made or for what expense it is incurred.
Example: “Paid Rs. 2,000 for Salaries.”
- In Cash Book: It is recorded on the Credit side as “By Salaries A/c”.
- In Ledger: Go to ‘Salaries A/c’. On the debit side, write “To Cash A/c” and enter the amount Rs. 2,000.
Posting Discount Columns
In a two-column or three-column Cash Book, there are columns for discounts. The posting of these columns is handled differently from individual entries.
- Discount Allowed Column (Debit side of Cash Book): This represents an expense for the business. The total of this column is posted periodically (e.g., monthly) to the debit side of the ‘Discount Allowed Account’ in the ledger.
- Discount Received Column (Credit side of Cash Book): This represents an income for the business. The total of this column is posted to the credit side of the ‘Discount Received Account’ in the ledger.
The Cash Account Balance
A crucial point to remember is that since the Cash Book itself maintains a running balance of cash, a separate ‘Cash Account’ is not opened in the general ledger. The cash column of the Cash Book functions as the Cash Account. The balance in the cash column will always be a debit balance or zero, as you cannot spend more cash than you have.
| Transaction in Cash Book | Ledger Account to be Posted | Side of Ledger Account | Particulars in Ledger |
|---|---|---|---|
| Receipt from a Debtor (Debit Side) | Debtor’s Personal Account | Credit | By Cash A/c / By Bank A/c |
| Payment to a Creditor (Credit Side) | Creditor’s Personal Account | Debit | To Cash A/c / To Bank A/c |
| Cash Sales (Debit Side) | Sales Account | Credit | By Cash A/c |
| Payment for an Expense (Credit Side) | Respective Expense Account | Debit | To Cash A/c |
Quick Revision Points
- Posting is transferring entries from the Cash Book to ledger accounts.
- Items on the debit side of the Cash Book are posted to the credit side of ledger accounts.
- Items on the credit side of the Cash Book are posted to the debit side of ledger accounts.
- The total of the ‘Discount Allowed’ column is debited to the ‘Discount Allowed A/c’.
- The total of the ‘Discount Received’ column is credited to the ‘Discount Received A/c’.
- No separate Cash Account is opened in the ledger.
Practice Questions
- If a business pays Rs. 1,500 for office stationery by cheque, which account will be debited in the ledger?
- When cash is withdrawn from the bank for office use, it’s a contra entry. What is the posting effect in the ledger?
- The balance of the ‘Discount Received’ account will typically be a _______ balance.
- A debit balance in a personal account (e.g., Sunil’s A/c) in the ledger signifies that Sunil is a _________.
- The narration written below a ledger entry provides a brief ________ of the transaction.
