Triple Column Cash Book and Contra Entries

The Triple Column Cash Book carries three amount columns on each side — Cash, Bank, and Discount — and is the most complete, most commonly used form for a business that operates both a cash till and a bank account.

A transaction that involves moving money BETWEEN the firm's own cash and its own bank account — such as cash deposited into the bank, or cash withdrawn from the bank for office use — is called a Contra Entry, marked with the letter 'C' in the L.F. column on both sides. A contra entry appears once on the debit side (in one column) and once on the credit side (in the other column) of the SAME Cash Book, e.g., 'Cash deposited into Bank' is entered as a debit to the Bank column and simultaneously a credit to the Cash column. Because both aspects of the transaction are already fully captured within the Cash Book itself, a contra entry needs no further posting anywhere — it is complete in itself.

The Bank column, unlike the Cash column, CAN show either a debit balance (money in the bank — an asset) or a credit balance (an overdraft — the bank has effectively lent the firm money, a liability), since a bank account, unlike a physical cash till, can genuinely go into a negative position, subject to an overdraft arrangement with the bank.