Double Column Cash Book | Cash & Discount | Bank & Discount

 

 

 

Meaning of Cash Transactions

A cash transaction is a transaction where payment is settled immediately.

A cash transaction is the opposite of a credit transaction.

Cash transactions are classified into cash receipts and cash payments.

Cash transactions also include:

Transactions made through cash,

Transactions made through cheque,

Transactions made through plastic money like debit card, credit card, smart card etc.

Transactions made through Bank App

Transactions made through online payment in Nepal are eSewa, Khatli, Connect IPS, iPay etc.

Transactions made through online payment in Pakistan are EasyPaisa, JazzCash, Upaisa, GoLootLO, PayPak etc.

Transactions made through online payment in India are Paytm, BHIM, InstaMojo, PayU India, Citrus Pay, CCAvenue, EBS Payment Gateway etc.

Transactions made through online payment in international like Western Union, PayPal, MasterCard etc.

Virtual money Bitcoin, Litecoin, Ethereum, Zcash, Dash, Ripple, Monero etc.

 

 

Keep in mind (KIM)

Credit transaction is settled in future date viz No entry for credit.

‘On credit’ or ‘on account’ is mentioned on the credit transaction.

 

 

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Double Column Cash Book without Contra

Double column is also known as two column cash book.

Under this method, two amount columns are prepared in one side.

Receipt amount is recorded in debit side.

Payment amount is recorded in credit side.

From this account cash balance or bank balance is found out.

Under double column cash book, following cash books are prepared:

Cash and discount

Bank and discount   

Cash and bank

 

Double Column Cash Book (Cash and Discount)

Date	Receipt	LF	Cash	Dis	Date	Payment	LF	Cash	Dis
	To Balance b/d		××××
						By Balance c/d		××××
	To Balance b/d		××××

Or

Double Column Cash Book (Bank and Discount)

Date	Receipt	LF	Bank	Dis	Date	Payment	LF	Bank	Dis
	To Balance b/d		××××
						By Balance c/d		××××
	To Balance b/d		××××

 

 

Keep in mind (KIM)

Bank balance may be in debit balance (bank balance) or credit balance (bank overdraft)

Opening balance = beginning balance = balance b/d

Closing balance = ending balance = balance c/d

 

 

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

PROBLEM: 1A

The following extracted balances are given by KK Traders:

          Jan 1:        Opening cash balance $55,000.

          Jan 2:        Goods purchased from Binesh worth $45,000 and paid partially $30,000.

          Jan 5:        Goods sold to Rita for $25,000 and cash received $20,000 in partial.

          Jan 10:     Electricity bill paid $1,000.

          Jan 15:     Equipment purchased for $5,000.

          Jan 18:     Cash paid to Binesh $14,700 in full settlement.

          Jan 22:     Cash received from Rita and discount allowed $200.

          Jan 28:     Rent paid in $10,000.

          Jan 29:     Cash withdrawn for personal use $3,000.

Required: Double column cash book for the month of Jan                                     

[Answer: Cash balance = $16,100]

SOLUTION:

Double Column Cash Book (Cash and Discount)

Date	Receipt	LF	Cash	Dis	Date	Payment	LF	Cash	Dis
Jan 1	To Balance b/d		55,000	−	Jan 2	By Purchase A/c		30,000	−
Jan 5	To Sales A/c		20,000	−	Jan 10	By Electricity expenses		1,000	−
Jan 22	To Rita’s A/c		4,800	200	Jan 15	By Equipment A/c		5,000	−
					Jan 18	By Binesh’s A/c		14,700	300
					Jan 28	By Rent A/c		10,000	−
					Jan 29	By Drawings A/c		3,000
					Jan 31	By Balance c/d		16,100
			79,800	200				79,800	300
Feb 1	To Balance b/d		16,100

 

 

Keep in Mind (KIM)

$200 is discount allowed coz debit side.

$300 is discount received coz credit side.

$16,100 is cash balance, it difference of Dr and Cr viz 79,800 – 63,700 = $16,100.

 

 

 

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

PROBLEM: 1B

The following extracted balances are given by KM Traders:

     Oct 1:        Balance as per cash book $13,200

     Oct 3:            Paid $7,500 for goods purchased after deducting $50 as discount.

     Oct 5:        Cash received $5,000 from HP Traders after deducting $75 as discount.

     Oct 8:        Goods sold of $5,400 and cheque received for the same.

     Oct 11:     Cash paid $1,150 to RR Traders in full settlement of $1,200.

     Oct 15:     Received from GN Enterprises $3,400 and discount allowed $100.

     Oct 18:     Goods sold to NB Concern $3,700

     Oct 19:     Salary paid $4,500

     Oct 25:     Cash paid to KK Store $4,800 after receiving 4% discount

Required: Double column cash book (cash and discount) for the month of October           

[Answer: Bank balance = $3,650]

SOLUTION:

Double Column Cash Book (Bank and Discount)

Date	Receipt	LF	Cash	Dis	Date	Payment	LF	Cash	Dis
Oct 1	To Balance b/d		13,200	−	Oct 3	By Purchase account		7,500	50
Oct 5	To HP Traders		5,000	75	Oct 11	By RR Traders		1,150	50
Oct 15	To GN Enterprises		3,400	100	Oct 19	By Salary paid		4,500
					Oct 25	By KK Store		4,800	200
					Oct 31	By Balance c/d		3,650
			21,600	175				21,600	300
Nov 1	To Balance b/d		3,650

 

Explanation

 

Oct 8, it is bank transaction; so, NO entry in cash and discount
Oct 18, it is credit sales; so, NO entry in cash book
Oct 25, % = 100, 4% discount means 100 – 4 = 96%
Here, 96%	= 4,800
100%	= 4,800 × 100% ÷ 96%
	= $5,000
Discount = $5,000 – $4,800 = $200

 

 

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

PROBLEM: 1C

The following extracted balances are given by KL Traders:

     Jan 1:        Opening balance of bank $70,000.

     Jan 2:            Goods purchased from Binisha worth $60,000 and cheque issued $40,000 partial.

     Jan 5:        Goods sold to Ritika for $25,000.

     Jan 10:      Cash deposited into bank for $10,000.

     Jan 15:      Cheque issued to Binisha for $19,500 in full settlement.

     Jan 20:      Cheque received from Ritika after $200 discount.

     Jan 25:      Commission paid by cheque $5,000.

     Jan 30:      Cash withdrawn from bank for office use $30,300.

Required: Double column cash book for the month of Jan                                     

[Answer: Bank balance = $10,000]

SOLUTION:

Double Column Cash Book (Bank and Discount)

Date	Receipt	LF	Bank	Dis	Date	Payment	LF	Bank	Dis
Jan 1	To Balance b/d		70,000	−	Jan 2	By Purchase account		40,000	−
Jan 10	To Cash account		10,000	−	Jan 15	By Binisha’s account		19,500	500
Jan 20	To Ritika’s account		24,800	200	Jan 25	By Commission A/c		5,000
					Jan 30	By Cash account		30,300
					Jan 30	By Balance c/d		10,000
			104,800	200				104,800	500
Feb 1	To Balance b/d		10,000

 

$200 is discount allowed

$500 is discount received

 

Explanation

Jan 2,

Goods purchased for $60,000 and paid $40,000 partially.

Here, credit transaction is $60,000 – $40,000 = $20,000; No entry in Jan 2

 

Jan 5,

Goods sold to Ritika for $25,000.

It is credit transaction; No entry in Jan 5

 

 

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

PROBLEM: 1D

The following extracted balances are given by KP Tool House:

Jul 1:	Debit balance of bank $40,000.
Jul 4:	Goods sold for $10,000 and received cash $4,000 and balance by cheque after $100 discount.
Jul 8:	Goods purchased for $4,000 and paid by cheque $3,900 in full settlement.
Jul 10:	Cheque received from AR Traders of $10,000.
Jul 13:	Sold old office equipment for $12,000 and received a cheque of $11,900 in full settlement.
Jul 14:	Cash deposited into bank $3,500.
Jul 19:	Cash withdrew from bank for office use $5,000.
Jul 20:	Deposited cheque of AR Traders into bank.
Jul 28:	Issued a cheque of $1,450 to MP Suppliers and received discount $50.
Jul 30:	Issued a cheque of $15,000 for the rent.

Required: Double column cash book for the month of July         

[Answer: Bank balance = $45,950]

SOLUTION:

Double Column Cash Book (Bank and Discount)

Date	Receipt	LF	Bank	Dis	Date	Payment	LF	Bank	Dis
Jul 1	To Balance b/d		40,000		Jul 8	By Purchase account		3,900	100
Jul 4	To Sales account		5,900	100	Jul 19	By Cash account		5,000
Jul 10	To AR Traders		10,000		Jul 28	By MP Suppliers		1,450	50
Jul 13	To Equipment account		11,900	100	Jul 30	By Rent account		15,000
Jul 14	To Cash account		3,500		Jul 31	By Balance c/d		45,950
			71,300	200				71,300	150
Aug 1	To Balance b/d		45,950

 

 

Explanation

Jul 4:

Goods sold for $10,000

Cash received $4,000; NO entry for cash in bank and discount

Remaining amount = $10,000 – $4,000 = $6,000

Out of $6,000; discount is $100 and cheque is $5,900

 

Jul 20:

NO entry for cheque deposited into bank coz we have already recorded this amount in Jul 10

 

 

 

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Problems and Answers of Cash Book

 

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

PROBLEM: 1A

The following extracted balances are given by KK Traders:

March 1:	Debit cash balance $55,000.
March 2:	Goods purchased from Geeta for $40,000 and partial cash paid $20,000.
March 5:	Cash received from Manisha $19,500 and discount allowed $500.
March 10:	Wages paid $1,000.
March 15:	Furniture purchased for $5,000.
March 18:	Cash paid to Geeta $19,500 in full settlement.
March 28:	Advertisement expenses paid in cash $4,000.
March 29:	Cash withdrawn for personal use $5,000.

Required: Double column cash book for the month of March

[Answer: Cash balance = $20,000]

 

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

PROBLEM: 1B 

The following extracted balances are given by KL Traders:

February 1:	Debit bank balance $95,000.
February 5:	Goods sold to Ritika for $25,000 on credit.
February 10:	Commission received by cheque $5,000.
February 15:	Cheque issued to Binisha for $54,000 in full settlement of $55,000.
February 20:	Cheque received from Ritika after $500 discount.
February 25:	Computer printer purchase by cheque $10,000.
February 27:	Salary paid by cheque $27,000.
February 28:	Cash withdrawn from bank for office use $20,000.

Required: Double column cash book for the month of February 

[Answer: Bank balance = $13,500

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