Entries in the cash book are then posted into the general. From the latin word, the meaning of contra is opposite to or against. Cash ac is removed from the ledger and instead of it the single column cash book is kept to record cash transactions. 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 procedure of posting entries from a cash book to ledger accounts. Three column cash book cash book with cash, discount. In many concerns it is customary for the trader to allow or to receive small allowance off or against the dues. 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. A triple column cash book is usually maintained by large firms which make and receive payments in. The cash book records a all cash receipts b all cash. 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. Three column cash book problems and solutions accountancy. When a single transaction affects both cash and a bank column with the same amount then it is known as contra transaction.
Remember the following points while recording entries in a three column cash book. 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. Name the entry which is made at both the debit and credit side of 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, then it is known as the contra entry. In such a cash book, cash columns and bank columns represent cash. In such cases, the cash book with bank column in addition to the cash and discount columns is found convenient. We know, when cash is received from the debtors, discount may be allowed to them. In such a cash book, cash columns and bank columns represent cash ac and bank ac respectively. 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. Cash book and its type part 2 singledoubletriple with solved problem in hindi for.
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 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 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. Contra entry is one which is recorded in the both side of the three column cash book by indicating capital cin l. Triple column cash book a cash book with discount and bank column is triple column cashbook. The discount column is not balanced but only totaled. 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.
Contra entries are those entries in which same account can be debited and credited in contrary situation. Accounting mcq questions and answers with easy and logical explanations. Notes on types of cash book grade 11 principles of. In order to distinguish the contra entries from other entries, letter c is put in posting reference column against these entries. If you find difficulty in answering these questions, read cash book chapter thoroughly from explanation section of the website. Cash book having additional columns for discount is known as double column cash book. Such type of cashbook is known as three column cashbook. 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. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Double column cash book or two column cash book shows two amount column in debit side and same column in credit site. Thus it assumes the form of contra entry on the day of. Accounting mcq questions and solutions with explanations.
Double column cash book some transaction, balancing and. Such type of cashbook is known as threecolumn cashbook. The three column cash book also known as triple column cash book. 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. Which of the following is recorded as contra entry. 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. Remember the following points when writing a three column cash book. 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. For example we debit bank account when depositing cash. 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. The above amount is recorded in the bank column debit side of the double column cash book.
On april 1, 2017, hassan sajjad store cash book showed debit balances of cash rs. Name three columns which are responsible for cash book to be called as three column cash book. Name the column of the cash book which is totalled not balanced. The amount will be recorded on the receipts side in bank column and on the payments side in the cash column. If the payment is made in cash it will be recorded in usual manner in the cash column. What is contra entry how can you deal this entry while. 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. This entry is not posted to any ledger account because both debit and credit aspects of transaction. It means the cash and the discount are very much related to. To indicate that is a contra entry, the alphabet c is. Three column cash book definition, format and examples. The issue with double entry accounting is that there is not rea. 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. Threecolumn cash books and cash discounts springerlink.
Recording transaction in three columnar cash book with. 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. In triple column cash book, the balance of bank overdraft brought forward will appear in 6. The three column cashbook is sometimes referred to as the triple cash book, treble cash book or the 3 column cash book. Threecolumn cash books and discounts igcse accounts. 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.
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. A contra entry is transactions that happen between a cash account and a bank account. Therefore, enter on credit side, cash column by bank and on. In case a transaction affects both the cash and the bank account, a contra entry is recorded. Prepare a two column cash book from the following entries. These entries result in increase in cash balances and decrease in bank balances or vice versa. Jul 04, 2015 cash book introduction simple, double and triple column cash book lecture 1 by rakesh sir duration. These transactions are recorded in a double column cash book as done below. Cash bok with discount and bank column or three column. In manual accounting contra entry is recorded in the journal by marking c in the particulars column after ledger name. 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 cash book is a chronological record of the receipts and payments transactions for a business. The contra is a latin word which means against or opposite. The specimen performa of a simple cash book is given as follows. 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. This format of cash book is useful when either there is no bank transaction or bank transactions do not occur frequently. Writing single column cash book, double column cash book.
Triple column cash book explained with example tutorstips. The cash book records a all cash receipts b all cash payments. 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 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. The modern organizations, in which the cash transactions are. Three column cash book definition, format and examples play. From the following particulars make cash book of ghulam fatima trading co. Triplethree column cash book explanation, format, example. In business firm most of the payments are received and paid by cheque. 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. These entries result in increase in cash balances and decrease in. It is an indication that the two ledger accounts affected by.
When a trader keeps a bank account it becomes necessary to record the. A three column cash book includes three amount columns on both. Cash book introduction simple, double and triple column cash book lecture 1 by rakesh sir duration. The double entry has two equal and corresponding sides known as debit and credit. Cash book consists of cash account and bank account. This type of transaction is called as contra entry. 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. These transactions should be indicated by the contra sign c in. 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. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail.
Hints for recording in three triple column cash book. When cash is received it is entered on the debit or left hand side. Writing single column cash book, double column cash book and. This will become contra entry and should be indicated by c in the l. Discount allowed is recorded in the discount column on the debit side of the triple column cash book and posted. 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. Related searches to if we withdraw cash from od account, is it contra entry or receipt entry. Accountancy 2 answers hi, in triple coloumn cash book, when it is.
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. 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. And when cash is paid to creditors, discount may be received from them. Cash book short questions and answers play accounting.
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. In manual accounting contra entry is recorded in the journal by marking c in the particulars column after. Ncert solutions for class 11 financial accounting recording. 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. The three column cash book is simply the traditional twocolumn cash book with the addition of an extra column at each side. This extra column is used to record cash discounts. 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. Accounting mcq is important for exams like ca, cs, cma, cpa, cfa, upsc, net, banking and other accounts department exam. Test your learning about cash book chapter by answering 6 short questions given below. The cash book or cash account is most important of all subsidiary books. Three column cash book questions and answers readdownload prepare 3 column cash book 2005 dec 1started business with cash 120,000 in t. A two column cash book is one in which there are two columns on each side.
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. Cash ac and bank ac are two busiest accounts in ledger and they are removed from the ledger to reduce its volume and size. 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. Contra entry is one which is recorded in the both side of the three column cash book by indicating capital c in l. From the following transactions, write up the cash book with three columns and. The lefthand side is debit and righthand side is credit. Here is the video for triple column cash book with solution in simple way. Treblethree column cash book definition, explanation. It is an indication that the two ledger accounts affected by the transaction are present in the same book. If we withdraw cash from od account, is it contra entry or. The doubleentry has two equal and corresponding sides known as debit and credit. Some transactions that lead to contra entry are given below. It is recorded only when on of the below entry is happend. When the cheque is deposited the entry for deposit will be passed on the day of depositing the cheque into bank.
Cash book is the account which keeps track of all the cash transactions of the business. Three column cash book credit side in the discount received column as usual. 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. Tripal or three column cash book is a book with cash, bank and discount column. The discount columns on both receipt and payment sides are only totaled and not balanced. Oct 11, 2018 test your learning about cash book chapter by answering 6 short questions given below. The balance of cash column is the closing cash in hand, the balance of bank column is the cash at bank or bank overdraft. We suggest you try to answer each question yourself before clicking on the see answer button. In all such cases both entries occur in the cash book and no ledger entry is required. The receipts are recorded in the dr side and the payments are recorded in the cr side of the cash book. In the three column cash book there will be some cross or contra entries i. Double column cash book explanation, format, example. Here we detail about the twenty special business transactions which needs special treatment in double column cash book.
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