NCERT Solutions for Class 7th Social Science Chapter 20 After the compounding example and the story of the king and the sage — THINK ABOUT IT

Book page 198 Updated on2026-09-19

Q1.
How does one track so many transactions of deposits and withdrawals? The bank provides a diary-like document called a passbook that keeps a record of all the receipts and payment transactions. This can be updated regularly at the bank.
Answer

Through the passbook — the bank’s written diary of your account. The chapter supplies the answer inside the question, so the work here is to understand what the passbook actually records and why that is enough to track everything.

A passbook has one line for every transaction, and each line carries the same six particulars. These are the column headings printed in Fig. 8.7:

ColumnWhat it tells you
DateWhen the transaction happened
ParticularsWhat it was — salary transfer, rent, a UPI payment, SMS charges, interest
Cheque no.Filled only when a cheque was used
DebitMoney going out of the account
CreditMoney coming in
End balanceWhat is left after that line

Because each line ends with a fresh balance, you never have to add up the whole year to know where you stand — the last line always tells you. The chapter’s margin notes give the two key words: debit is “taking money out of an account” and credit is “receiving money in an account”.

Today the same record is available in other forms too, which the chapter mentions on page 205: netbanking shows “balances and transaction history”, and a UPI app “reduces the need for physical passbook updates” because it “allows users to check balances and track transactions anytime on their phone”.

Check it yourself: the passbook is worth updating at the bank even if you use an app — it is the only version that carries the bank’s own printing, and it is what you produce as proof.
Q2.
Look at the passbook in Fig. 8.7. Observe all the particulars under outflow of cash (debit) for the expenses and inflow of cash for (credit) income. Why is keeping records of financial transactions important? Discuss in the class.
Answer

First, what Fig. 8.7 actually shows. Here are the seven entries exactly as printed in the book, with the debits and credits placed in their own columns.

DateParticularsCheque no.Debit (out)Credit (in)End balance
13.01.25TRF/company salary account10500.0015000.00
17.01.25TRF/1252/payment of rent105236000.009000.00
28.01.25UPI/DR/Regal cinema1500.007500.00
29.01.25UPI/DR/Coffee house400.007100.00
03.02.25Cash deposit self500.007600.00
15.02.25SMS Charges12.007588.00
31.03.25Interest credit1327.008915.00

Check the balances yourself — every line follows from the one above it:

Before the salary: ₹15,000 − ₹10,500 = ₹4,500
₹15,000 − ₹6,000 (rent) = ₹9,000
₹9,000 − ₹1,500 (cinema) = ₹7,500
₹7,500 − ₹400 (coffee house) = ₹7,100
₹7,100 + ₹500 (cash deposit) = ₹7,600
₹7,600 − ₹12 (SMS charges) = ₹7,588
₹7,588 + ₹1,327 (interest) = ₹8,915
Total debits ₹7,912 · total credits ₹12,327

Read across the page and the account tells a small life story: one salary in, rent out by cheque, two UPI spends on outings, a little cash added back, a ₹12 service charge — and, on 31 March, the bank’s own interest credit of ₹1,327.

Why keeping records matters

  • You can see where the money went. ₹1,900 went on the cinema and coffee house in two days. Nobody notices that without a record.
  • It is proof. A rent paid, a fee paid, a scholarship received — the passbook proves it with the bank’s own entry, cheque number and date.
  • It catches mistakes and fraud. An entry you do not recognise is the first sign that something is wrong. The chapter’s warning about frauds on page 210 depends on people noticing exactly this.
  • Small charges become visible. ₹12 of SMS charges looks like nothing; twelve months of it is ₹144.
  • It lets you plan and borrow. A bank looks at how regularly money comes in and goes out before giving a loan; a business must keep such records to know whether it is making a profit.
Why it happens: memory is a poor accountant. We remember the salary and forget the ₹400. A record removes the argument entirely, because the balance after every line is arithmetic, not opinion — which is why every business, every temple that lent money in ancient India, and every bank today has kept written accounts.
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