Double Column Cash Book with Contra Entry

 

What is double column cash book with contra?

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When cash deposit into bank or cash withdrawn from bank for office use, it will affect opposite accounts.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Cash deposited into bank		Cash withdrawn from bank for office use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(Being- cash deposited into bank)		(Being- cash withdrawn from bank for office use)

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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April 29: Cash withdrawn from bank for office use Rs 20,000.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Cash deposited into bank				Cash withdrawn from bank for office use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.

#####

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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