Project II: Cash Book of pocket money MCQs Quiz | Class 9
This is a multiple-choice quiz for Class IX students studying Elements of Book-Keeping & Accountancy (Code 254), focusing on the Unit: Project Work. This quiz covers the topic of Project II: Cash Book of pocket money, including concepts like recording personal cash receipts/payments, calculating balances, and preparing reports for a specific period. Answer all questions, submit your quiz, and download the PDF answer sheet for your records.
Understanding the Cash Book for Pocket Money
A simple cash book is one of the most basic but important books of accounts. For a student, maintaining a cash book for pocket money is an excellent practical exercise to understand the fundamentals of accounting. It helps in tracking where the money comes from (receipts) and where it goes (payments), promoting financial discipline from a young age.
Key Concepts in a Simple Cash Book
- Receipts: All inflows of cash are recorded as receipts. For a student, this includes pocket money received from parents, cash gifts from relatives, or any money earned from a small task. In a formal cash book, receipts are recorded on the Debit (Dr.) side, which is the left-hand side.
- Payments: All outflows of cash are recorded as payments. This includes money spent on items like stationery, snacks, movie tickets, or transportation. Payments are recorded on the Credit (Cr.) side, which is the right-hand side of the cash book.
- Balancing: At the end of a specific period (like a week or a month), the cash book is balanced to find out how much cash is left. This is done by subtracting the total payments from the total receipts.
- Opening Balance (Balance b/d): This is the amount of cash you have at the beginning of a new period. It is the same as the closing balance of the previous period. It’s written on the receipts (Debit) side as ‘To Balance b/d’ (brought down).
- Closing Balance (Balance c/d): This is the amount of cash remaining at the end of the period after all receipts and payments have been accounted for. It is calculated as (Total Receipts – Total Payments). It is written on the payments (Credit) side as ‘By Balance c/d’ (carried down) to make the totals of both sides equal.
How to Prepare a Simple Cash Book
A simple cash book has a ‘T’ shape format, with the left side for receipts and the right side for payments.
- Start with the opening balance (if any) on the Debit side.
- Record all money received (receipts) on the Debit side with the date and particulars (details of the transaction).
- Record all money spent (payments) on the Credit side with the date and particulars.
- At the end of the period, total the amount columns on both sides.
- The total of the Debit side (Receipts) will usually be higher than the Credit side (Payments).
- Find the difference (Total Receipts – Total Payments). This difference is the closing balance.
- Write this closing balance amount on the Credit side as ‘By Balance c/d’ so that the totals of both sides match.
- This closing balance becomes the opening balance for the next period.
Example: A Student’s Weekly Cash Book
Here is a simple example:
| Dr. (Receipts) | Cr. (Payments) | ||||
|---|---|---|---|---|---|
| Date | Particulars | Amount (Rs.) | Date | Particulars | Amount (Rs.) |
| Jan 1 | To Pocket Money | 500 | Jan 2 | By Pen | 20 |
| Jan 5 | To Gift from Uncle | 200 | Jan 4 | By Snacks | 50 |
| Jan 6 | By Movie Ticket | 150 | |||
| Jan 7 | By Balance c/d | 480 | |||
| Total | 700 | Total | 700 | ||
| Jan 8 | To Balance b/d | 480 | |||
Quick Revision Points
- A cash book records only cash transactions.
- The left side is for receipts (Debit) and the right side is for payments (Credit).
- Always start a new period with the opening balance from the previous period.
- The closing balance represents the cash in hand at the end of the period.
- Balancing is done to equalize the totals of both sides.
Practice Questions
- If your opening balance is Rs. 100, you receive Rs. 400 as pocket money, and you spend Rs. 250 during the month, what is your closing balance?
- On which side of the cash book would you record money spent on a birthday gift for a friend?
- What does the term ‘Balance b/d’ signify?
- Why is it important for even a student to maintain a record of their cash transactions?
- If your total receipts are Rs. 800 and your closing balance is Rs. 150, what was the total amount of your payments for the period?
