Preparation of Bank Column Cash Book Part 2

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  • All cash transactions are recorded as they recorded in Simple Cash book

  • All Bank transactions are recorded in Bank column.

There are some special business transactions which need special treatment in bank column. Those are –

Opening Balance:

  • Opening cash and bank balances are recorded on debit side.

  • Sometimes business man withdraw excess amount from bank than the existing balance. Then the closing bank balance is a credit balance. This is called ‘Bank Overdraft’. It is written on credit side as opening balance.

Receipt of Cheques:

  • All cheque receipts are entered in the bank column of the debit side and all cheque payments are entered in the bank column of the credit side if the cheque is deposited or paid on same date.

  • If cheque receipts are not deposited in the bank on same day, they are included in cash on debit side.

Contra Entries: Transactions those relates both cash and bank are called ‘Contra Entries’.

Example: If Cash is withdrawn from bank for office use, it is entered on credit side of bank column and also in the debit side of the cash column of the book.

Note: “C” is written in the L.F. column on both sides.

Endorsement of Cheque: Sometimes business receive cheque from one customer and transfer this to other party. This is called endorsement of cheque.

  • Cheque receipt will be entered on debit side of the cash and

  • Cheque payment will be recorded on credit side of the cash

Bank Charges:

  • Interest to be paid, cheque collection charges are entered on credit side of the bank column of Cash Book

  • Interest earned on savings, collected commission etc. are entered on debit side of the bank column of Cash Book.

Prepare Bank Column Cash Book from the following information for December 2006

Table of Prepare Bank Column Cash Book from the Following Information for December 2006
Title: Table of Prepare Bank Column Cash Book from the following information for December 2006

Date

Details

Amount (Rs.)

2006

Dec 1

Cash in hand

10500

Dec 1

Bank Overdraft

9500

Dec 4

Paid Wages

400

Dec 6

Cash Sales

10000

Dec 9

Cash deposited into Bank

5000

Dec 13

Purchased Goods and paid by cheque

6000

Dec 15

Cash deposited into Bank

4000

Dec 18

Paid Trade Expenses by cheque

1200

Dec 22

Rent paid

2300

Dec 25

Received Cash from Rahul

1500

Dec 27

Commission paid

2000

Dec 29

Salary paid

3500

Dec 31

Bought Goods by Cheque

3000

Bank Column Cash Book

Dr. Cr.

Table of Bank Column Cash Book
Title: Table of Bank Column Cash Book

Date

Particulars

L.F.

Cash

(Rs.)

Bank

(Rs.)

Date

Particular

L.F

Cash (Rs.)

Bank (Rs.)

2006

Dec 1

6

9

15

25

31

Jan 1

Balance b/d

Sales

Cash

Cash

Rahul

Balance b/d

Balance b/d

C

C

10500

10000

1500

5000

4000

10700

2006

Dec1

4

9

13

15

18

22

27

29

31

31

Jan 1

Balance b/d

Wages

Bank

Purchases

Bank

Trade Exp.

Rent

Commission

Salary

Purchases

Balance c/d

Balance b/d

C

C

400

5000

4000

2300

2000

3500

4800

9500

6000

1200

3000

22,000

19,700

22,000

19700

4800

__

10700

Posting of Bank Column Cash Book in the Ledger:

Posting of Debit side of Bank column Cash book:

Sales A/c

Dr. Cr.

Table of a Posting of Debit Side of Bank Column Cash Book: Sales a/C
Title: Table of a Posting of Debit side of Bank column Cash book: Sales A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 6

Cash

10,000

Rahul A/c

Dr. Cr.

Table of a Posting of Debit Side of Bank Column Cash Book: Rahul a/C
Title: Table of a Posting of Debit side of Bank column Cash book: Rahul A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 25

Cash

1,500

Posting of Credit side of Bank Column Cash Book:

Wages A/c

Dr. Cr.

Table of a Posting of Credit Side of Bank Column Cash Book: Wages a/C
Title: Table of a Posting of Credit side of Bank Column Cash Book: Wages A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 4

Cash

3000

Purchases A/c

Dr. Cr.

Table of a Posting of Credit Side of Bank Column Cash Book: Purchases a/C
Title: Table of a Posting of Credit side of Bank Column Cash Book: Purchases A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 13

Dec 31

Bank

Bank

6,000

3,000

Trade Expenses A/c

Dr. Cr.

Table of a Posting of Credit Side of Bank Column Cash Book: Trade Expenses a/C
Title: Table of a Posting of Credit side of Bank Column Cash Book: Trade Expenses A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 18

Cash

1,200

Commission A/c

Dr. Cr.

Table of a Posting of Credit Side of Bank Column Cash Book: Commission a/C
Title: Table of a Posting of Credit side of Bank Column Cash Book: Commission A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 27

Cash

2,000

Rent A/c

Dr. Cr.

Table of a Posting of Credit Side of Bank Column Cash Book: Rent a/C
Title: Table of a Posting of Credit side of Bank Column Cash Book: Rent A/c

Date

Particulars

L.F.

Amount (Rs.)

Date

Particular

L.F

Amount(Rs.)

2006

Dec 22

Cash

2,300

Note: While preparing ledger for Bank Column Cash Book, no need of maintaining separate Cash A/c and Bank A/c books.

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