3
Question
Purchase of machinery for business on cash is recorded in ____________.
Purchase of machinery for business on cash is recorded in ____________.
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Solution
The correct option is C Cash book
Cash book is a book in which all cash receipts and cash payments are recorded. It is also one of the books of original entry. It starts with the cash or bank balance at the beginning of the period. In case of new business, there is no cash balance to start with. It is prepared by all organisations. When a cash book is maintained, cash transactions are not recorded in the journal, and no cash or bank account is required to be maintained in the ledger as cash book serves the purpose of cash account.Hence, purchase of machinery for business on cash is recorded in cash book.
Cash book is a book in which all cash receipts and cash payments are recorded. It is also one of the books of original entry. It starts with the cash or bank balance at the beginning of the period. In case of new business, there is no cash balance to start with. It is prepared by all organisations. When a cash book is maintained, cash transactions are not recorded in the journal, and no cash or bank account is required to be maintained in the ledger as cash book serves the purpose of cash account.
Hence, purchase of machinery for business on cash is recorded in cash book.
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