Which type of transaction is excluded from the cash book?
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Answer: C. Salary remained outstanding
Explanation
Outstanding salaries represent unpaid accrued expenses involving no immediate physical cash movement. The cash book records exclusively actual cash inflows and outflows during the operational period. Non-cash accruals are entered through journal vouchers instead of the primary cash book. A cash book is a financial ledger containing all cash receipts and cash disbursements. Accrued expenses are liabilities recognized when incurred regardless of when cash changes hands. Maintaining strict cash records ensures accurate daily liquidity monitoring for business managers.
Businesses reconcile their cash books regularly against bank statements to detect discrepancies. Failure to exclude non-cash items would severely distort actual operational liquidity figures. Financial controllers rely on accurate cash books to manage short-term working capital needs. Cash received from debtors represents an actual cash inflow recorded in the cash book. Cash paid to creditors constitutes a physical cash disbursement logged in the cash book. Cash deposited with the bank involves direct cash movement handled within cash books.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
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