PRC-1 · Chapter 9 · Question 95 of 100
In the context of a multiple-column cash book, a 'contra entry' represents:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A transaction involving both the cash and bank accounts
Explanation
A contra entry occurs when cash is deposited into the bank or withdrawn from the bank for office use, affecting both the cash and bank columns of the same cash book simultaneously.
More Bank Reconciliations MCQs
- Q97If a cheque received from a customer is deposited into the bank on the same day, what is the initial double entry?
- Q98To adjust for a cheque that was returned marked 'NSF' (Not Sufficient Funds) by the bank, the accountant must:
- Q99What does the letter 'C' in the folio column of a cash book indicate?
- Q100Reconciling items like unpresented cheques and uncleared lodgements in a Bank Reconciliation Statement are naturally cleared when:
- Q1What is the primary purpose of preparing a Bank Reconciliation Statement (BRS)?