Introducing Cash book - JSS2 Business studies Past Questions and Answers - page 3
How is the closing balance of a cash book calculated?
The closing balance of a cash book is calculated by subtracting the total payments from the total receipts, resulting in the net cash position at the end of the accounting period.
What is the purpose of reconciling the cash book with bank statements?
The purpose of reconciling the cash book with bank statements is to identify any discrepancies between the recorded transactions in the cash book and the actual transactions processed by the bank.
Why is it important to record an opening balance in a cash book?
Recording an opening balance in a cash book is important to ensure the accuracy of subsequent transactions and to provide a starting point for tracking cash flows for the accounting period.
How are entries from the cash book posted to other accounts?
Entries from the cash book are posted to other accounts in the general ledger, ensuring that the financial records are accurately maintained and updated.