The first step in preparation of Receipt and Payment Account is taking the opening balances of cash on hand and cash at bank and entering them on the _ side; bank overdraft at the beginning of the year by entering the same on the side of this account.

credit, debit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

debit, credit

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

debit, debit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

credit, credit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B debit, credit
Receipt and Payment account is a summary of cash receipts and payments during the accounting period. The first step in preparation of Receipt and Payment account is taking the opening balances of cash in hand and cash at bank and entering them on the debit side. In case, there is bank overdraft the same is entered on credit side of this account.

Suggest Corrections

Similar questions

Q. If a transaction involves both cash and bank account, it is entered on both sides of the cash book, one in the cash column and second in the bank column, though on opposite sides. This is called a _____________.

Q. Prepare Bank Reconciliation Statement from the following particulars on June 30, 2016:
Bank Statement showed a favourable balance of ₹ 9,214.
(a) On 29th June, the bank credited the sum of ₹ 1,650 in error.
(b) Certain cheques, valued at ₹ 4,500 issued before June 30, were not cleared.
(c) A hire purchase payment of ₹ 950, made by a standing order was not entered in the cash book.
(d) A cheque of ₹ 600 received, deposited and credited by bank, was accounted as a receipt in the cash column of the cash book.
(e) Other cheques for ₹ 8,500 were deposited in June but cheques for ₹ 6,000 only were cleared by the bankers.

On checking Ram’s Cash Book with the Bank statement of his overdraft current account for the month of November, 2012, you find the following:

(i) Cash Book showed an overdraft of Rs 45,000.
(ii) The payment side of the Cash Book had been under cast by Rs 1,500.
(iii) A cheque for Rs 7,500 drawn on his saving account has been shown as drawn on his current account.
(iv) Cheques amounting to Rs 70,000 drawn and entered in the Cash Book had not yet been presented.
(v) Cheques amounting to Rs 60,000 sent to the bank for collection,though entered in the Cash Book,had not been credited by the bank.
(vi) Bank charges of Rs 750 as per Bank Statement had not been taken into the Cash Book.
(vii) Dividends of Rs 25,000 had been paid direct into the bank and not entered in the Cash Book. You are required to prepare a Bank Reconciliation Statement on 30th November, 2012.

Enter the following transactions in cash book.

$\begin{matrix} 2013 & Rs Jan.01 & Cash in hand & 1, 500 Jan.05 & Paid to Ram & 300 Jan.05 & Discount allowed by him & 10 Jan.08 & Purchased goods & 400 Jan.10 & Received from R. Gupta & 980 Jan.10 & Discount allowed & 20 Jan.16 & Sold goods & 400 Jan.21 & Paid to S. Sharma & 295 Jan.21 & Discount received & 5 Jan.25 & Paid wages & 50 Jan.31 & Paid to Narayan in full settlement of his account which shows a credit balance Rs 400 & 390 \end{matrix}$

Jagdeep Singh's Cash book on 31st March, 2012 showed an over draft balance of Rs 12,100 on his No. 1 Account at the bank. On investigation it is found that:

(a) Cheque drawn amounting to Rs 4,200 had not been presented to the bank for payment.

(b) Cheque Rs 3,600 entered in the Cash Book and paid into the bank had not been credited by the bank.

(d) Bank charges on' 50 entered on the bank statement had not been entered in the Cash Book.

(e) A cheque for Rs 5,200 drawn on the Account No.1 had been charged by the bank in error to the Account No.2.

(f) A dividend of Rs 300 paid direct to the bank had not been entered in the Cash Book.

(g) A cheque for Rs 700 received from a debtor paid into the bank dishonoured and shown as such by the Bank but no entry of dis honour had been made in the Cash Book.

(h) A cheque of Rs 420, drawn by Bank’s another customer of the same name, had been charged to Jagdeep bank account by error.

You are required:

(i) To show the necessary adjustments to be made in the Cash Book; and

(ii) To prepare a Bank Reconciliation Statement for No.1 Account as at 31st March, 2012.

$\begin{matrix} Jan. 1 & Cash in Hand & 4, 000 Cash at Bank & 12, 000 Jan. 4 & Sold goods for cash & 13, 200 Jan. 5 & Received from Suresh & 2, 500 Jan. 6 & Received a Cheque from Ravi and deposited it into Bank. & 6, 400 Jan. 7 & Salary paid to office staff by Cheque & 7, 600 Jan. 10 & Paid Sudhir by Cheque & 5, 000 Jan. 12 & Cash Purchases & 8, 000 Jan. 16 & Cash deposited into Bank & 10, 000 Jan. 20 & Cash Sales & 15, 100 Purchased Machinery and payment made by Cash & 6, 800 Jan. 21 & Paid wages for erection of above Machinery & 400 Jan. 22 & Withdrew from Bank for office use & 7, 500 Jan. 23 & Received a Cheque from Anil and deposited it into Bank & 4, 600 Jan. 27 & Anil's Cheque returned by bank dishonoured & 4, 600 Jan. 31 & Paid into Bank & 12, 000 \end{matrix}$

Q. On Checking Ram's Cash Book with the bank statement of his overdraft current account for the month of November 2014, you find the following:
(a) Cash Book showed an overdraft of ₹ 16,200.
(b) The payment side of the Cash Book had been undercast by ₹ 500.
(c) A cheque for ₹ 13,600 drawn on his saving deposit account has been wrongly recorded as drawn on current account in the Cash Book.
(d) Cheques amounting to ₹ 18,800 drawn and entered in the Cash Book had not been presented.
(e) Cheques amounting to ₹ 7,500 sent to the bank for collection though entered in the Cash Book, had not been credited by the bank.
(f) Bank charge of ₹ 150 as per bank statement of account had not been taken in the Cash Book.
(g) Dividend of the amount of ₹ 420 had been paid direct to the bank and not entered in the Cash Book.
You are requested to arrive at the balance as it would appear in the bank statement as on 30th November 2014.

Join BYJU'S Learning Program

The first step in preparation of Receipt and Payment Account is taking the opening balances of cash on hand and cash at bank and entering them on the _______ side; bank overdraft at the beginning of the year by entering the same on the ______ side of this account.

The first step in preparation of Receipt and Payment Account is taking the opening balances of cash on hand and cash at bank and entering them on the _ side; bank overdraft at the beginning of the year by entering the same on the side of this account.