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When cash deposit into bank or cash withdrawn from bank for office use, it will affect opposite accounts.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 Deposited in bank Deposit money into bank Bank account open |
Drew cash from bank for office use Withdrew from bank for office use Withdrawing money for office use from bank Drawn for office use |
There are two entries are contra:
Contra Entry
Cash deposited into bank |
Cash withdrawn from bank for office use |
Bank account Dr To Cash account (Being- cash deposited into bank) |
Cash account Dr To Bank account (Being- cash withdrawn from bank for office use) |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Cash withdrawn from bank for personal or private use is not contra entry. Drawings account Dr To Bank account (Being- cash withdrawn from bank for personal use) |
Double Column Cash Book with Contra
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු =
ILLUSTRATION: 5
The following extracted balances are given by JK Traders:
April 2: Cash deposited into bank Rs 35,000.
April 15: Cash withdrawn from bank for office use Rs 17,000.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 Bank account Dr 35,000 To Cash 35,000 |
Cash withdrawn from bank for office use Cash account Dr 17,000 To Bank account 17,000 |
Bank is in debit side Rs 35,000 Cash is in credit side Rs 35,000 |
Cash is in debit side Rs 17,000 Bank is in credit side Rs 17,000 |
Step 2: Write bank amount in debit column Step 3: Write ‘C’ in LF column Step 4: Write ‘To Cash account’ in particulars column. Step 5: Write cash amount in credit column Step 6: Write ‘C’ in LF column Step 7: Write ‘By Bank account’ in particulars column. |
Step 2: Write cash amount in debit column Step 3: Write ‘C’ in LF column Step 4: Write ‘To Bank account’ in particulars column. Step 5: Write bank amount in credit column Step 6: Write ‘C’ in LF 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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