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When cash deposit into bank or cash withdrawn from bank for office use, it will affect opposite accounts.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 entries are contra:
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Cash withdrawn from bank for office use |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(Being- cash withdrawn from bank for office use) |
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Click on link for YouTube videos topic wise : |
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Accounting Equation |
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Basic Journal Entries in Nepali |
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Basic Journal Entries |
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Journal Entry and Ledger |
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Ledger Account |
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Subsidiary Book |
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Cash Book |
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Trial Balance and Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Click on link for YouTube videos chapter wise: |
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Financial Accounting and Analysis (All videos) |
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Accounting Process |
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Accounting for Long Lived Assets |
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Analysis of Financial Statement |
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 3
The following extracted balances are given by KK Traders:
April 1: Opening balance of cash Rs 85,000 and bank Rs 5,000.
April 2: Cash deposited into bank Rs 50,000.
April 5: Goods purchased from Bina worth Rs 40,000; cash paid Rs 15,000 and cheque issued for the balance.
April 10: Goods sold to Rojina for Rs 25,000 in cash.
April 15: Furniture purchased for cash Rs 7,000.
April 18: Cash paid to Binesh Rs 14,500 in full settlement of Rs 15,000.
April 22: Cheque received from Rita Rs 18,700 discount allowed Rs 300.
April 29: Cash withdrawn from bank for office use Rs 20,000.
Required: Double column cash book.
[Answer: Cash balance = 43,500; bank balance = 28,700]
SOLUTION:
Given and working note:
Cash deposited into bank |
Cash withdrawn from bank for office use |
||||||
Bank account |
Dr |
50,000 |
|
Cash account |
Dr |
20,000 |
|
To Cash |
|
|
50,000 |
To Bank account |
|
|
20,000 |
Bank is in debit side Rs 50,000 |
Cash is in debit side Rs 20,000 |
||||||
Cash is in credit side Rs 50,000 |
Bank is in credit side Rs 20,000 |
||||||
Step 1: Do journal entry as working note |
Step 1: Do journal entry as working note |
||||||
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 1 |
To Balance b/d |
− |
85,000 |
5,000 |
Apr 2 |
By Bank account7 |
C6 |
50,0005 |
− |
Apr 2 |
To Cash account4 |
C3 |
− |
50,0002 |
Apr 5 |
By Purchase account |
− |
15,000 |
25,000 |
Apr 10 |
To Sales account |
− |
25,000 |
− |
Apr 15 |
By Furniture account |
− |
7,000 |
− |
Apr 22 |
To Rita’s account |
− |
− |
18,700 |
Apr 18 |
By Binesh’s account |
− |
14,500 |
− |
Apr 29 |
To Bank account4 |
C3 |
20,0002 |
− |
Apr 29 |
By Cash account7 |
C6 |
− |
20,0005 |
|
|
|
|
|
Apr 31 |
By Balance c/d |
|
43,500 |
28,700 |
|
|
|
130,000 |
73,700 |
|
|
|
130,000 |
73,700 |
Keep in Mind (KIM)
When amount is written in bank column, we must write cash account in particulars. |
When amount is written in cash column, we must write bank account in particulars. |
Discount is recorded in double column (cash and bank) column. |
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PROBLEMS AND ANSWERS |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 3A
The following extracted balances are given by KK Traders:
April 1: Opening balance of cash Rs 55,000 and bank Rs 10,000.
April 2: Cash deposited into bank Rs 30,000.
April 3: Goods purchased for cash Rs 15,000 and by cheque Rs 25,000.
April 4: Goods sold to Rojina for Rs 25,000 in cash.
April 5: Air condition purchased for cash Rs 47,000.
April 6: Cheque issued to Binesh Rs 14,500 in full settlement of Rs 15,000.
April 7: Cash received from Rita Rs 19,700 discount allowed Rs 300.
April 9: Cash withdrawn from bank for office use Rs 20,000.
Required: Double column cash book.
[Answer: Cash balance = 27,700 Dr; bank balance = 19,500 Cr]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 3B
UP Traders has following extracted balances:
May 1: Debit cash balance Rs 75,000 but credit bank balance Rs 40,000.
May 2: Cash deposited into bank Rs 70,000.
May 3: Cash Rs 25,000 and cheque of Rs 15,000 received from debtor.
May 5: Interest on overdraft charged by bank Rs 600.
May 6: Cash withdrawn from bank for private use Rs 10,000.
May 7: Cash withdrew from bank for office use Rs 15,000
Required: Double columns cash book
[Answer: Balance: Cash = 45,000; Bank = 19,400]
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