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Contra Entry in Cash Book with Example

Arjun EP

Published on: October 14, 2020

What is contra entry?

Contra is Latin word that means opposite.

When cash deposit into bank or cash withdrawn from bank for office use, it will affect opposite accounts.

To be contra entry, there must be one debit and other credit entry of cash and bank in one journal entries.

Contra transaction increases cash in hand and decreases bank balance or vice-versa.

‘C’ is written for contra on both debit and credit side in LF columns.

These are common sentences for contra entry:

Cash paid into bank	Drew cash from bank for office use
Deposited in bank	Withdrew from bank for office use
Deposit money into bank	Withdrawing money for office use from bank
Bank account open	Drawn for office use

There are two types of contra entries:

Contra Entry

Cash deposited into bank		Cash withdrawn from bank for office use
Bank account	Dr	Cash account	Dr
To Cash account		To Bank account
(Being- cash deposited into bank)		(Being- cash withdrawn from bank for office use)

Keep in Mind (KIM)

Cash withdrawn from bank for personal or private use is not contra entry.
Drawings account	Dr
To Bank account
(Being- cash withdrawn from bank for personal use)

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Click on link for YouTube videos topic wise :
Accounting Equation	http://tiny.cc/c89jkz
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger Account	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance and Adjusted Trial Balance	http://tiny.cc/c59jkz
Bank Reconciliation Statement (BRS)	http://tiny.cc/q59jkz
Depreciation	http://tiny.cc/ugakkz
Click on link for YouTube videos chapter wise:
Financial Accounting and Analysis (All videos)	http://tiny.cc/jlersz
Accounting Process	http://tiny.cc/mlersz
Accounting for Long Lived Assets	http://tiny.cc/plersz
Analysis of Financial Statement	http://tiny.cc/slersz

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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

Example: 2

The following extracted balances are given by JK Traders:

April 2: Cash deposited into bank Rs 35,000.

April 15: Cash withdrew from bank for office use Rs 17,000.

Required: Show in double column cash book.

SOLUTION:

Given and working note:

Step 1: Do journal entry as working note				Step 1: Do journal entry as working note
Cash deposited into bank				Cash withdrawn from bank for office use
Bank account	Dr	35,000		Cash account	Dr	17,000
To Cash			35,000	To Bank account			17,000
Bank is in debit side Rs 35,000				Cash is in debit side Rs 17,000
Cash is in credit side Rs 35,000				Bank is in credit side Rs 17,000
Step 2: Write bank amount in debit column				Step 2: Write cash amount in debit column
Step 3: Write ‘C’ in LF column				Step 3: Write ‘C’ in LF column
Step 4: Write ‘To Cash account’ in particulars column.				Step 4: Write ‘To Bank account’ in particulars column.
Step 5: Write cash amount in credit column				Step 5: Write bank amount in credit column
Step 6: Write ‘C’ in LF column				Step 6: Write ‘C’ in LF column
Step 7: Write ‘By Bank account’ in particulars column.				Step 7: Write ‘By Cash account’ in particulars column.

Double Column Cash Book (Cash and Bank)

Date	Receipt	LF	Cash	Bank	Date	Payment	LF	Cash	Bank
Apr 2	To Cash account⁴	C³	–	35,000²	Apr 2	By Bank account⁷	C⁶	35,000⁵	–

Double Column Cash Book (Cash and Bank)

Date	Receipt	LF	Cash	Bank	Date	Payment	LF	Cash	Bank
Apr 15	To Bank account⁴	C³	17,000²		Apr 15	By Cash account⁷	C⁶	–	17,000⁵

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