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 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 |
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To Balance b/d |
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×××× |
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By Balance c/d |
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×××× |
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To Balance b/d |
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×××× |
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Or
Double Column Cash Book (Bank and Discount)
Date |
Receipt |
LF |
Bank |
Dis |
Date |
Payment |
LF |
Bank |
Dis |
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To Balance b/d |
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×××× |
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By Balance c/d |
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×××× |
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To Balance b/d |
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×××× |
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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 |
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55,000 |
− |
Jan 2 |
By Purchase A/c |
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30,000 |
− |
Jan 5 |
To Sales A/c |
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20,000 |
− |
Jan 10 |
By Electricity expenses |
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1,000 |
− |
Jan 22 |
To Rita’s A/c |
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4,800 |
200 |
Jan 15 |
By Equipment A/c |
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5,000 |
− |
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Jan 18 |
By Binesh’s A/c |
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14,700 |
300 |
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Jan 28 |
By Rent A/c |
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10,000 |
− |
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Jan 29 |
By Drawings A/c |
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3,000 |
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Jan 31 |
By Balance c/d |
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16,100 |
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79,800 |
200 |
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79,800 |
300 |
Feb 1 |
To Balance b/d |
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16,100 |
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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 |
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13,200 |
− |
Oct 3 |
By Purchase account |
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7,500 |
50 |
Oct 5 |
To HP Traders |
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5,000 |
75 |
Oct 11 |
By RR Traders |
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1,150 |
50 |
Oct 15 |
To GN Enterprises |
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3,400 |
100 |
Oct 19 |
By Salary paid |
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4,500 |
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Oct 25 |
By KK Store |
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4,800 |
200 |
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Oct 31 |
By Balance c/d |
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3,650 |
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21,600 |
175 |
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21,600 |
300 |
Nov 1 |
To Balance b/d |
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3,650 |
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Explanation
Oct 8, it is bank transaction; so, NO entry in cash and discount |
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Oct 18, it is credit sales; so, NO entry in cash book |
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Oct 25, % = 100, 4% discount means 100 – 4 = 96% |
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Here, 96% |
= 4,800 |
100% |
= 4,800 × 100% ÷ 96% |
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= $5,000 |
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Discount = $5,000 – $4,800 = $200 |
#####
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Accounting Equation |
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Journal Entries in Nepali |
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Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cashbook |
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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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Accounting for Long Lived Assets |
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Analysis of Financial Statement |
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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 |
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70,000 |
− |
Jan 2 |
By Purchase account |
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40,000 |
− |
Jan 10 |
To Cash account |
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10,000 |
− |
Jan 15 |
By Binisha’s account |
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19,500 |
500 |
Jan 20 |
To Ritika’s account |
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24,800 |
200 |
Jan 25 |
By Commission A/c |
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5,000 |
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Jan 30 |
By Cash account |
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30,300 |
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Jan 30 |
By Balance c/d |
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10,000 |
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104,800 |
200 |
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104,800 |
500 |
Feb 1 |
To Balance b/d |
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10,000 |
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$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 |
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40,000 |
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Jul 8 |
By Purchase account |
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3,900 |
100 |
Jul 4 |
To Sales account |
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5,900 |
100 |
Jul 19 |
By Cash account |
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5,000 |
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Jul 10 |
To AR Traders |
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10,000 |
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Jul 28 |
By MP Suppliers |
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1,450 |
50 |
Jul 13 |
To Equipment account |
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11,900 |
100 |
Jul 30 |
By Rent account |
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15,000 |
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Jul 14 |
To Cash account |
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3,500 |
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Jul 31 |
By Balance c/d |
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45,950 |
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71,300 |
200 |
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71,300 |
150 |
Aug 1 |
To Balance b/d |
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45,950 |
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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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