The cash book is a chronological record of the receipts and payments transactions for a business. At the same time we credit bank account when withdrawing money from bank. Double entry bookkeeping, in accounting, is a system of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account. The discount columns on both receipt and payment sides are only totaled and not balanced. Accounting mcq is important for exams like ca, cs, cma, cpa, cfa, upsc, net, banking and other accounts department exam.
The three column cash book consists of 3 columns one with the first one being contra entry recording and the other 2 being the bank and the cash columns, when cash is deposited in to the bank or. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. The contra entry is an entry which involves a cash account and a bank account and which is recorded on both debit and credit sides of the double column cash book at the same time. Double column cash book explanation, format, example. Contra entry is one which is recorded in the both side of the three column cash book by indicating capital c in l. The discount column is not balanced but only totaled. The modern organizations, in which the cash transactions are. Cash book introduction simple, double and triple column cash book lecture 1 by rakesh sir duration. Name the entry which is made at both the debit and credit side of cash book. When a single transaction affects both cash and a bank column with the same amount then it is known as contra transaction. The double entry has two equal and corresponding sides known as debit and credit.
Three column cash book questions and answers readdownload prepare 3 column cash book 2005 dec 1started business with cash 120,000 in t. It means the cash and the discount are very much related to. The three column cash book is simply the traditional twocolumn cash book with the addition of an extra column at each side. For example we debit bank account when depositing cash. Contra entry c in lf column a contra entry, in case of doubletriple column cash book implies an entry relating to a transaction whose second affect is also present in the same book ledger. If an entry is made on the debit side and the same entry is recorded on the credit side of the cash book, it is called a contra entry. The lefthand side is debit and righthand side is credit. Writing single column cash book, double column cash book and.
If the payment is made in cash it will be recorded in usual manner in the cash column. Cash bok with discount and bank column or three column. When the cheque is deposited the entry for deposit will be passed on the day of depositing the cheque into bank. It is an indication that the two ledger accounts affected by the transaction are present in the same book. Accountancy 2 answers hi, in triple coloumn cash book, when it is. Three column cash book definition, format and examples. Cash book consists of cash account and bank account. Threecolumn cash books and discounts igcse accounts. The transaction that is entered in either sides of the double column or three column cash book, affecting both cash and the bank balances concomitantly is called contra entry. If an amount is entered on the debit side of the cash book, and the exact amount is again entered on the credit side of the same account, it is called contra entry.
Triple column cash book explained with example march 24, 2018 april 9, 2020 amanpreet kaur in triple column cash book here are three columns in the cash book because every businessman has a minimum of one current account in the bank. Test your learning about cash book chapter by answering 6 short questions given below. From the following transactions, write up the cash book with three columns and. When cash is drawn, cash comes in and is debited in the cash book in cash column as to bank and credit in cash book in bank column as to cash. These transactions should be indicated by the contra sign c in. Cash ac is removed from the ledger and instead of it the single column cash book is kept to record cash transactions. Discount allowed is recorded in the discount column on the debit side of the triple column cash book and posted.
A three column cash book or treble column cash book is one in which there are three columns on each side debit and credit side. In all such cases both entries occur in the cash book and no ledger entry is required. A two column cash book is one in which there are two columns on each side. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. Cash book short questions and answers play accounting. In such cases, the cash book with bank column in addition to the cash and discount columns is found convenient. Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book the cash book, though it serves the purpose of a cash book of original entry viz.
Which of the following is recorded as contra entry. The receipts are recorded in the dr side and the payments are recorded in the cr side of the cash book. Because of the enormously large amount of cash transactions in a typical business, this cash account is maintained as a separate book known as cash book. Cash ac and bank ac are two busiest accounts in ledger and they are removed from the ledger to reduce its volume and size. Triplethree column cash book explanation, format, example. Cash book having additional columns for discount is known as double column cash book. Ncert solutions for class 11 financial accounting recording. Prepare a two column cash book from the following entries. Threecolumn cash books and cash discounts springerlink.
Three column cash book problems and solutions accountancy. When double entry for both side of cash books appears that type of transaction is called contra entry as in double column cash book entry for receiving or paying cash in bank or from bank requires. Some transactions that lead to contra entry are given below. When cash is received it is entered on the debit or left hand side.
The specimen performa of a simple cash book is given as follows. A three column cash book includes three amount columns on both. Oct 11, 2018 test your learning about cash book chapter by answering 6 short questions given below. If we withdraw cash from od account, is it contra entry or. These transactions are recorded in a double column cash book as done below. The above amount is recorded in the bank column debit side of the double column cash book. Hints for recording in three triple column cash book. Accounting mcq questions and solutions with explanations. What is contra entry how can you deal this entry while. We suggest you try to answer each question yourself before clicking on the see answer button. A triple column cash book or three column cash book is one which consists of three separate columns on the debit side as well as on credit. Triple column cash book a cash book with discount and bank column is triple column cashbook.
Recording transaction in three columnar cash book with. A contra entry is transactions that happen between a cash account and a bank account. Here we detail about the twenty special business transactions which needs special treatment in double column cash book. Name three columns which are responsible for cash book to be called as three column cash book. In this cash book three amount columns are maintained on both the debit and credit sidesthe first column is for discount, the second for cash and the third for bank. Thus, a transaction in which cash ac and bank ac are involved, is recorded on both the sides of double column cash book, then it is known as thecontra entry. The doubleentry has two equal and corresponding sides known as debit and credit. Triple column cash book explained with example tutorstips. The three column cash book also known as triple column cash book. Aug, 2014 triple column cash book a cash book with discount and bank column is triple column cashbook. Cash book the cash book is a ledger in the sense that it is designed in the form of a cash account and records cash receipts on the debit side and cash payments on the credit side.
The issue with double entry accounting is that there is not rea. Accounting mcq questions and answers with easy and logical explanations. This video help you to solve all your practical problems of. Need for triple entry accounting modern financial accounting is based on a double entry system, wherein you do two entries in your books for each transaction so as to minimize errors. Contra entry c in lf column a contra entry, in case of double triple column cash book implies an entry relating to a transaction whose second affect is also present in the same book ledger. Notes on types of cash book grade 11 principles of. Cash book is the account which keeps track of all the cash transactions of the business. When a trader keeps a bank account it becomes necessary to record the.
If you find difficulty in answering these questions, read cash book chapter thoroughly from explanation section of the website. The cash book records a all cash receipts b all cash payments. In business firm most of the payments are received and paid by cheque. To indicate that is a contra entry, the alphabet c is. This entry is not posted to any ledger account because both debit and credit aspects of transaction. Three column cash book cash book with cash, discount. In the three column cash book there will be some cross or contra entries i. This extra column is used to record cash discounts. These entries result in increase in cash balances and decrease in bank balances or vice versa.
This type of transaction is called as contra entry. The cash book records a all cash receipts b all cash. The contra is a latin word which means against or opposite. Cash book and its type part 2 singledoubletriple with solved problem in hindi for. Dec 17, 2019 the other side of the three column cash ledger book would be headed credit and show an identical format with the three columns representing the monetary amounts of the cash payment, bank payment, and discounts received. Thus it assumes the form of contra entry on the day of. A triple column cash book is usually maintained by large firms which make and receive payments in. This format of cash book is useful when either there is no bank transaction or bank transactions do not occur frequently. A contra entry is also used in the intercompany netting to offset receivables and payables between 2 different legal entitiessubsidiaries of a company so that one final net amount remains. Tripal or three column cash book is a book with cash, bank and discount column. Thus, a transaction in which cash ac and bank ac are involved, is recorded on both the sides of double column cash book, then it is known as the contra entry. Three column cash book definition, format and examples play.
And when cash is paid to creditors, discount may be received from them. In manual accounting contra entry is recorded in the journal by marking c in the particulars column after ledger name. The three column cash book consists of 3 columns one with the first one being contra entry recording and the other 2 being the bank and the cash columns, when cash is. The triple column cash book also referred to as three column cash book is the most exhaustive form of cash book which has three money columns on both receipt dr and payment cr sides to record transactions involving cash, bank and discounts. In case a transaction affects both the cash and the bank account, a contra entry is recorded.
Therefore, enter on credit side, cash column by bank and on. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. Such type of cashbook is known as threecolumn cashbook. In manual accounting contra entry is recorded in the journal by marking c in the particulars column after. When a transaction involves both cash and bank account, then the entry is made in both side of the same folio of the cash book. Entries in the cash book are then posted into the general. In the same way no bank ac is opened in ledger for recording bank. It is an indication that the two ledger accounts affected by. Name the column of the cash book which is totalled not balanced. Treblethree column cash book definition, explanation. Contra entry is one which is recorded in the both side of the three column cash book by indicating capital cin l. In such a cash book, cash columns and bank columns represent cash.
Doubleentry bookkeeping, in accounting, is a system of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account. In many concerns it is customary for the trader to allow or to receive small allowance off or against the dues. Mar 02, 2020 notice that the format of three column cash book is similar to that of a two column cash book with the exception of an additional column to account for bankrelated transactions. Such type of cashbook is known as three column cashbook. This will become contra entry and should be indicated by c in the l. Remember the following points while recording entries in a three column cash book. From the latin word, the meaning of contra is opposite to or against. One is used to record cash transactions, the second is used to record bank transactions and third is used to record discount received and paid. These entries result in increase in cash balances and decrease in. It is recorded only when on of the below entry is happend. In order to distinguish the contra entries from other entries, letter c is put in posting reference column against these entries. On april 1, 2017, hassan sajjad store cash book showed debit balances of cash rs. When double entry for both side of cash books appears that type of transaction is called contra entry as in double column cash book entry for receiving or paying cash in.
The transactions which affect cash and bank account at a time are called contra entries and are recorded in both sides of triple column cash book. Remember the following points when writing a three column cash book. We know, when cash is received from the debtors, discount may be allowed to them. Also known as a simple cash book or a one column cash book, a single column cash book has one relevant column on each side which shows the simple receipts and payments of cash. The three column cashbook is sometimes referred to as the triple cash book, treble cash book or the 3 column cash book. Thus a transaction in which cash ac and bank ac are involved, is recorded on both the sides of double column cash book, it is called contra entry, from the latin prefix contra meaning opposite to or against. The cash book or cash account is most important of all subsidiary books. Double column cash book or two column cash book shows two amount column in debit side and same column in credit site. Contra entries are those entries in which same account can be debited and credited in contrary situation.
Double column cash book some transaction, balancing and. From the following particulars make cash book of ghulam fatima trading co. A triple column cash book is usually maintained by large firms which make and receive payments in cash as well as by bank and which frequently. A double column cash book or two column cash book is one which consists of two separate columns on the debit side as well as credit side for recording cash and discount.
The procedure of posting entries from a cash book to ledger accounts. Jul 04, 2015 cash book introduction simple, double and triple column cash book lecture 1 by rakesh sir duration. Three column cash book credit side in the discount received column as usual. Related searches to if we withdraw cash from od account, is it contra entry or receipt entry. The amount will be recorded on the receipts side in bank column and on the payments side in the cash column. In such a cash book, cash columns and bank columns represent cash ac and bank ac respectively.
In triple column cash book, the balance of bank overdraft brought forward will appear in 6. Here is the video for triple column cash book with solution in simple way. Writing single column cash book, double column cash book. The balance of cash column is the closing cash in hand, the balance of bank column is the cash at bank or bank overdraft. The cash book is updated from original accounting source documents, and is therefore a book of prime entry and as such, can be classified as a special journal unlike other special journals such as the purchases journal or the sales journal, the cash ledger book. Similarly an amount entered on the credit side of an account also may have a contra entry on the debit side of the same account. This entry is a contra entry as it affects both cash and bank balance together.
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