Subject: Other
Each depositor gets a pass book and cheque book from the bank. The passbook is the copy of the depositor's account in bank's ledger. It's another form is the bank statement. It is a summarized statement of all deposits and withdrawals made by the depositor during a certain period of time. The entries of all deposits and withdrawals made by the client are passed in the passbook by the bank. The passbook shows the balance of the client after each deposit and withdrawal.
A cash book is a primary record of all the receipts and payments made in cash and through the bank. It has the features of the primary book and principle book. It is different from cash account as it is only a principle book. It has two sides i.e. debit side and credit side. The debit side shows cash receipts and the credit side shows cash payments. All cash and cheques received and deposited are shown on the receipt side. All payments made by cash and cheques are shown on the payment side. At the end of a given period, its balance is obtained to know the amount of cash and bank balances.
A business maintains one of the following types of cash book as per its requirements:
Simple Cash Book
It is a single column cash book. It contains only one amount on its both sides. It records only cash receipts and payments. It is similar to the cash account. It records all cash receipts on its receipt side and all cash payments on its payment side. It is balanced usually on the daily basis to report the amount of cash lying in the cash book. After its preparation, individual accounts are opened in the ledger.
Simple Bank Book
A simple bank book is similar to a bank account. It contains only one amount column on its both sides. It records only those transactions which are performed through the bank. It records the cheque received and deposited on its receipt side and the cheque issued on its payment side. It is suitable for a business which follows the practice of receiving and paying amount only through cheque.
Cash Book with Cash and Discount Columns
It is a type of double column cash book. If a business performs transactions mostly in cash by allowing and receiving discount then it will be suitable to maintain this type of cash book. Cash receipt and discount allowed are entered on receipt side and cash payment and discount received are entered on the payment side. It does not record cheques or banking transactions.
Cash Book with Bank and Discount Columns
It is a type of double column cash book having bank and discount columns. A business allows cash discount to its customers at the time of receiving cash. The amount of cash received and discount allowed are entered on receipts side. The business receives a discount from its suppliers at the time of paying cash to them. The amount of cash paid and discount received are entered on the payment side.
Cash Book with Cash and Bank Columns
It is combined form of simple cash book and bank book. The cash column records receipts and payments in cash and bank column records receipts and payments through bank. The cheque received and deposited is recorded on receipt side and cheque issued on payment side under bank column. The cash and bank columns are balanced to know cash and bank balances. The cash column always shows debit balance but the bank column either shows debit balance or credit balance. It contains contra entry for the amount of cash deposited into and withdrawn from the bank.
Contra Entry
The act of entering a cash transaction both on receipt and payment sides under cash and bank columns is called contra entry. It is the indication of completing double effect which does not require posting.
Cash Book with Cash, Bank and Discount Columns
It is also known as triple column cash book as it contains three amount on its both sides. These three columns are cash, bank, and discount. The amount of cash and cheque received and discount allowed are entered on receipt side and the amount of cash and cheque given and discount received are entered on the payment side.
Meaning of petty cash book.
The book in which petty expenses are recorded in known as petty cash book.
Write any two importance of petty cash fund.
Any two importance of petty cash fund are:-
What is the A.G.F no. of Petty cash fund?
The A.G.f no. of petty cash fund is 22.
Why petty cash fund is created in government offices?
Petty cash fund is created in government offices to meet expenses of small amounts.
You were given the following transactions:
Date |
Transactions |
2015, Feb 01 |
Sarala started a business with a capital of Rs.1,000 |
2015, Feb 03 |
She opened a bank account with Rs.80,000 |
2015, Feb 05 |
Sold goods for Rs.40,000 |
2015, Feb 16 |
Purchased goods for Rs.8,000 |
2015, Feb 18 |
Wages paid Rs.10,000 |
2015, Feb 26 |
Paid commission Rs.6,000 |
2015, Feb 28 |
Sold goods to Rama for Rs.6,000 |
2015, Feb 30 |
Loan taken from Everest Bank Rs.25,000 |
2015, Feb 31 |
Paid for refreshment Rs.3,000 |
Required: Simple cash book
Solution:
Dr. | Cash a/c | Cr. |
Date | Particulars | JF | Amt Rs. | Date | Particulars | JF | Amt Rs. |
Feb 1 | To capital a/c | 1,00,000 | Feb 3 | By bank a/c | 80,000 | ||
Feb 5 | To sales a/c | 40,000 | Feb 16 | By purchase a/c | 5,000 | ||
Feb 30 | To Everest bank’s a/c | 25,000 | Feb 18 | By wages a/c | 10,000 | ||
Feb 26 | By commission a/c | 6,000 | |||||
Feb 31 | By refreshment a/c | 3,000 | |||||
Feb 31 | By balance c/d | 61,000 | |||||
1,65,000 | 1,65,000 | ||||||
61,000 |
The following transactions are extracted from the books of Mr. Sushil:
Date |
Particulars |
Ashad 01 |
Opening bank balance Rs.20000. |
Ashad 04 |
Purchased goods Rs.5,000. |
Ashad 07 |
Received cheque from Rudra Rs.10,000. |
Ashad 15 |
Salaries paid Rs.7,000. |
Ashad 18 |
Purchased office equipment Rs.6,000. |
Ashad 21 |
Received from debtor Rs.4,000. |
Ashad 26 |
Withdrawn from the bank for personal use Rs.4,000. |
Ashad 30 |
Sold goods for cash Rs.15,000. |
Required: Simple bank book
Solution:
Dr. | Bank a/c | Cr. |
Date | Particulars | JF | Amt Rs. | Date | Particulars | JF | Amt Rs. |
Ashad 1 | To balance b/d | 20,000 | Ashad 4 | By purchase a/c | 5,000 | ||
Ashad 7 | To Rudra’s a/c | 10,000 | Ashad 15 | By salary a/c | 7,000 | ||
Ashad 21 | To debtors a/c | 4,000 | Ashad 18 | By office equipment | 6,000 | ||
Ashad 30 | To sales a/c | 15,000 | Ashad 26 | By cash a/c | 4,000 | ||
Ashad 31 | By balance c/d | 27,000 | |||||
49,000 | 49,000 | ||||||
Shrawan 31 | To balance b/d | 27,000 |
Post the following transactions in a cash book with cash and discount column:
Date |
Particulars |
Jan 01 |
Balance of cash in hand Rs.24000. |
Jan 02 |
Received from Hari Rs.2,400 and allowed discount to him Rs.80. |
Jan 06 |
Bought typewriter for Rs.180. |
Jan 09 |
Purchased goods for cash Rs.26,000. |
Jan 12 |
Paid to Gautam Rs.1,600 and received a discount Rs.160. |
Jan 15 |
Received for cash sales Rs.7,600. |
Jan 18 |
Paid towards printing Rs.300. |
Jan 20 |
Shyam who owned Rs.3,000 he settled account by paying Rs.2,720. |
Jan 25 |
Received from Kumar Rs.3,200 and allowed him discount Rs.160 |
Jan 30 |
Paid wages Rs.1,600. |
Required: Cash book with cash and discount columns
Solution:
Dr. | Cash book with cash and discount column | Cr. |
Date | Particulars | JF | Cash | Discount | Date | Particulars | JF | Cash | Discount |
Jan 1 | To balance b/d | 24,000 | Jan 6 | By typewriter’s a/c | 1,800 | ||||
Jan 2 | To Hari’s a/c | 2,400 | 80 | Jan 9 | By purchase a/c | 26,000 | |||
Jan 15 | To sales a/c | 7,600 | Jan 16 | By Gautam’s a/c | 1,600 | 160 | |||
Jan 20 | To Shyam’s a/c | 2,720 | 280 | Jan 18 | By printing a/c | 300 | |||
Jan 25 | To Kumar’s a/c | 3,200 | 160 | Jan 30 | By wages a/c | 1,600 | |||
Jan 31 | By balance c/d | 8,620 | |||||||
39,920 | 520 | 39920 | 160 | ||||||
Feb 1 | To balance b/d | 8,620 |
Cash book with bank and discount column
The following are the transactions given to you for the month of February:
Date |
Transactions |
02-01 |
Opening bank balance Rs.1,00,000. |
02-04 |
Purchased goods from Hari for Rs.30,000 and paid Rs.20,000 by cheque partially. |
02-09 |
Withdrew from bank Rs.15,000 for office use and Rs.5,000 for personal use. |
02-12 |
Paid rent Rs.5,000 by cheque. |
02-17 |
Issued cheque to Sohan of Rs.9,000 after deducting 10% discount. |
Required: Double column cash book with bank and discount column
Solution:
Dr. | Cash book with bank and discount column | Cr. |
Date | Particulars | JF | Bank | Discount | Date | Particulars | JF | Bank | Discount |
02-01 | To cash a/c | 1,00,000 | 02-04 | By purchase a/c | 20,000 | ||||
02-09 | By cash a/c | 15,000 | |||||||
02-09 | By drawing a/c | 5,000 | |||||||
02-12 | By rent a/c | 5,000 | |||||||
02-17 | By Sohan’s a/c | 9,000 | 900 | ||||||
02-31 | By balance c/d | 46,000 | |||||||
1,00,000 | 1,00,000 | 900 | |||||||
- | |||||||||
03-01 | To balance b/d | 46,000 | - |
Cash book with cash and bank column
Following transactions are related with a trading company for the month of Jestha:
Solution:
Date |
Transactions |
02-01 |
Started business with cash Rs.40000 and bank balance Rs.60000. |
02-04 |
Paid into bank Rs.10,000. |
02-06 |
Paid rent by cheque Rs.8,000. |
02-09 |
Received a cheque to Ramesh Rs.5,000. |
02-14 |
Issued a cheque to Ratna Rs.5,000. |
02-20 |
Drew from bank for office use Rs.7,000. |
02-27 |
Purchased goods for Rs.20,000 from Shyam and paid partially Rs.15,000. |
02-30 |
Bank collected dividend Rs.5,000 on account. |
02-31 |
Cheque received on Jestha 9 from Ramesh of Rs.10,000 deposited into the bank. |
Required: Cash book with cash and bank column
Solution:
Dr. | Cash book with cash and bank column | Cr. |
Date | Particulars | JF | Cash | Bank | Date | Particulars | JF | Cash | Bank |
02-01 | To balance b/d | 40,000 | 60,000 | 02-04 | By bank a/c | C | 10,000 | ||
02-04 | To cash a/c | C | 10,000 | 02-06 | By rent a/c | 8,000 | |||
02-09 | To Ramesh’s a/c | 10,000 | 02-14 | By Ratna’s a/c | 5,000 | ||||
02-20 | To bank a/c | C | 7,000 | 02-20 | By cash a/c | C | 7,000 | ||
02-30 | To dividend a/c | 5,000 | 02-27 | By purchase a/c | 15,000 | ||||
02-31 | By balance c/d | 22,000 | 65,000 | ||||||
Following cash and banking transactions are given:
Date |
Transactions |
03-01 |
Cash in hand Rs.150 and at bank Rs.7000. |
03-02 |
Received cash from Mr. Om Rs.990 and allowed discount Rs.10. |
03-03 |
Deposited into bank Rs.500. |
03-04 |
Purchased inventory for Rs.2,500 and paid by cheque. |
03-05 |
Sold inventory to shanty on credit Rs.700 |
03-07 |
Received from Shanti a cheque for Rs.700 |
03-08 |
Sold inventory for cash Rs.700 |
03-09 |
Paid to Madan Rs.980 by cheque, discount received Rs.20 |
03-10 |
Paid wages Rs.100 |
03-11 |
Paid telephone bill Rs.60 |
03-16 |
Received from Suraj Rs.590 in full settlement of his account for Rs.600 |
Required: Triple column cash book
Solution:
Dr. | Triple column cash book | Cr. |
Date | Particulars | JF | Cash | Bank | Dis | Date | Particulars | JF | Cash | Bank | Dis |
03-01 | To balance b/d | 150 | 03-03 | By bank a/c | c | 500 | |||||
03-02 | To Om’s a/c | c | 990 | 10 | 03-04 | By purchase a/c | 2,500 | ||||
03-03 | To cash a/c | 500 | 03-09 | By Madan’s a/c | 980 | 20 | |||||
03-07 | To Shanti’s a/c | 700 | 03-10 | By wages a/c | 100 | ||||||
03-08 | To sales a/c | 700 | 03-11 | By telephone bills a/c | 60 | ||||||
03-16 | To Suraj’s a/c | 590 | 10 | 03-31 | By balance c/d | 1,770 | 4720 | ||||
2,430 | 8,200 | 20 | 2,430 | 8,200 | 20 | ||||||
04-01 | To balance b/d | 1,770 | 4,720 |
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