When a cheque received is endorsed, it must be entered on _____________.

Credit side of the cash book only

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Debit side of the cash book only

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Both sides of the cash book

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No where

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Solution

The correct option is B Both sides of the cash book
A bearer cheque received from a party and not deposited in the bank, can be given to any third party for making the similar payment to the latter. This is known as endorsement. On endorsement of cheque to the third party the cash column must be reduced so that it gets recorded in the cash column on the credit side of the cash book. It should be noted that when the cheque was received, it must have been recorded in the cash column on the debit (receipt) side of the cash book.

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2. Purchase of asset or stationery on credit is recorded in purchase book.
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4. Cheque received and deposited into bank on the same day is a contra entry.
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7. It is not necessary to record dishonor of cheques in the cash book.
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15. A person who endorses the cheque is known as endorser.

Q. Following facts relate to the business of Roshan who requires you to reconcile his Cash Book with the Pass Book balance:
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Unpresented cheques - Rs. 3,440
Uncredited cheques - Rs. 2,260
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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 _____________.

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