Record the following transactions in a double column cash book and balance it.
| Date (2017) | Details | Amount (₹) |
|---|---|---|
| Aug. 01 | Cash balance | 15,000 |
| Aug. 01 | Bank balance | 10,000 |
| Aug. 03 | Paid insurance premium by cheque | 4,200 |
| Aug. 08 | Cash sales | 22,000 |
| Aug. 08 | Cash discount | 750 |
| Aug. 09 | Payment for cash purchases | 21,000 |
| Aug. 09 | Cash discount | 700 |
| Aug. 09 | Cash deposited in bank | 15,000 |
| Aug. 10 | Telephone bill paid by cheque | 2,300 |
| Aug. 14 | Withdrawn from bank for personal use | 6,000 |
| Aug. 16 | Withdrawn from bank for office use | 14,500 |
| Aug. 20 | Received cheque from John in full and final settlement and deposited the same in the bank | 10,700 |
| Aug. 23 | Received cash from Michael | 6,850 |
| Aug. 23 | Discount allowed | 150 |
| Aug. 24 | Stationery purchased for cash | 1,800 |
| Aug. 25 | Cartage paid in cash | 350 |
| Aug. 25 | Cheque received from Kumar | 4,500 |
| Aug. 28 | Cheque received from Kumar deposited in Bank | 4,500 |
| Aug. 31 | Cheque deposited on Aug. 28 dishonoured and returned by the bank | — |
| Aug. 31 | Rent paid by cheque | 4,000 |
| Aug. 31 | Paid wages to the watchman in cash | 3,000 |
| Aug. 31 | Paid cash for postage | 220 |
Cash and Bank columns are kept side by side. Deposits, office-use withdrawals and the depositing of a received cheque are contra entries (marked 'C'). Cash column totals ₹62,850, Bank column ₹40,200; closing Cash ₹16,980, Bank ₹4,700.
Concept — contra entries and dishonour
When a transaction affects both cash and bank (e.g. cash deposited into the bank, or cash drawn from the bank for office use), both columns are written and the entry is marked 'C' in the L.F. column — it is not posted separately to any ledger account. A cheque received but not deposited the same day is first entered in the Cash column; on the day it is deposited a contra entry moves it to the Bank column. If that cheque is later dishonoured, the deposit is reversed by crediting the Bank column (the party's account is debited again). Cash discount is memorandum here — not entered in the cash or bank columns of a two-column book.
Solution — Cash Book (Double Column)
| Date | Receipts | L.F. | Cash (₹) | Bank (₹) | Date | Payments | L.F. | Cash (₹) | Bank (₹) |
|---|---|---|---|---|---|---|---|---|---|
| 2017 Aug. 01 | Balance b/d | 15,000 | 10,000 | 2017 Aug. 03 | Insurance | 4,200 | |||
| Aug. 08 | Sales | 22,000 | Aug. 09 | Purchases | 21,000 | ||||
| Aug. 09 | Cash | C | 15,000 | Aug. 09 | Bank | C | 15,000 | ||
| Aug. 16 | Bank | C | 14,500 | Aug. 10 | Telephone expenses | 2,300 | |||
| Aug. 20 | John | 10,700 | Aug. 14 | Drawings | 6,000 | ||||
| Aug. 23 | Michael | 6,850 | Aug. 16 | Cash | C | 14,500 | |||
| Aug. 25 | Kumar | 4,500 | Aug. 24 | Printing & stationery | 1,800 | ||||
| Aug. 28 | Cash | C | 4,500 | Aug. 25 | Cartage | 350 | |||
| Aug. 28 | Bank | C | 4,500 | ||||||
| Aug. 31 | Kumar (cheque dishonoured) | 4,500 | |||||||
| Aug. 31 | Rent | 4,000 | |||||||
| Aug. 31 | Wages | 3,000 | |||||||
| Aug. 31 | Postage | 220 | |||||||
| Aug. 31 | Balance c/d | 16,980 | 4,700 | ||||||
| Total | 62,850 | 40,200 | Total | 62,850 | 40,200 | ||||
| Sept. 01 | Balance b/d | 16,980 | 4,700 |
Kumar's cheque (₹4,500) was received on Aug. 25 (entered in the Cash column), deposited on Aug. 28 (a contra entry into the Bank column), and dishonoured on Aug. 31 — so the bank deposit is reversed by crediting the Bank column ₹4,500 against Kumar. The book closes with cash in hand ₹16,980 and cash at bank ₹4,700.
Cash column totals ₹62,850 and Bank column ₹40,200; closing balances carried down are Cash ₹16,980 and Bank ₹4,700.
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.