11th NCERT Accountancy Chapter 4

Petty cash book is used to record small cash payments. Its advantages include facilitating control over small cash expenses, simplifying the accounting process, and reducing the number of entries in the main cash book.

The cash book acts as a journal by recording all cash transactions systematically. Simultaneously, it also functions as a ledger as it provides information about the cash balance at any given time, similar to how a ledger operates.

A contra entry represents transactions where both cash and bank accounts are involved, such as cash deposited into a bank or cash withdrawn from a bank. In a double-column cash book, contra entries are recorded separately in the cash column and the bank column to maintain accurate records.

The process of preparing a ledger from a journal involves transferring journal entries related to individual accounts into the respective ledger accounts. Each transaction is posted to the appropriate ledger account based on the account title and amount stated in the journal.

Return inwards refer to goods returned by customers, resulting in a reduction of sales revenue, while return outwards represent goods returned to suppliers, leading to a decrease in purchases and an increase in accounts payable.