Double Column Cash Book with Contra

  

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When cash deposit into bank or cash withdrawn from bank for office use, it will affect opposite accounts.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Cash deposited into bank	Cash withdrawn from bank for office use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cash deposited into bank)	Cash account                                    Dr         To Bank account (Being- cash withdrawn from bank for office use)

 

 PROBLEM: 6

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April 29: Cash withdrawn from bank for office use Rs 20,000.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Cash deposited into bank Bank account     Dr 50,000           To Cash                         50,000	Cash withdrawn from bank for office use Cash account      Dr      20,000           To Bank account                   20,000
Bank is in debit side Rs 50,000 Cash is in credit side Rs 50,000	Cash is in debit side Rs 20,000 Bank is in credit side Rs 20,000
Step 1: Do journal entry as working note 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 1: Do journal entry as working note 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 1 Apr 2 Apr 10 Apr 22 Apr 29	To Balance b/d To Cash account4 To Sales account To Rita’s account To Bank account4	− C3 − − C3	85,000 − 25,000 − 20,0002	5,000 50,0002 − 18,700 −	Apr 2 Apr 5 Apr 15 Apr 18 Apr 29 Apr 31	By Bank account7 By Purchase account By Furniture account By Binesh’s account By Cash account7   By Balance c/d	C6 − − − C6	50,0005 15,000 7,000 14,500 − 43,500	− 25,000 − − 20,0005 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 = 

Basic Problem: 6

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]

Basic Problem: 7

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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