Accounting: Cash Book: Preparation of Bank Column Cash Book (For CBSE, ICSE, IAS, NET, NRA 2022)

Get top class preparation for competitive exams right from your home: get questions, notes, tests, video lectures and more- for all subjects of your exam.

Cash Book

Bank Column Cash Book

  • 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  • Example: If Cash is withdrawn from bank for office use, it is entered on credit side of bank column and also in the debit side of the cash column of the book.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 Supporting: Endorsement_of_Cheque
DateDetailsAmount (₹)
2006
Dec 1Cash in hand10500
Dec 1Bank Overdraft9500
Dec 4Paid Wages400
Dec 6Cash Sales10000
Dec 9Cash deposited into Bank5000
Dec 13Purchased Goods and paid by cheque6000
Dec 15Cash deposited into Bank4000
Dec 18Paid Trade Expenses by cheque1200
Dec 22Rent paid2300
Dec 25Received Cash from Rahul1500
Dec 27Commission paid2000
Dec 29Salary paid3500
Dec 31Bought Goods by Cheque3000

Bank Column Cash Book

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Cash

(₹)

Bank

(₹)

DateParticularL. FCash (₹)Bank (₹)
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

22,00019,70022,00019700
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 Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 6

Cash10,000

Rahul A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 25

Cash1,500

Posting of Credit side of Bank Column Cash Book:

Wages A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 4

Cash3000

Purchases A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 13

Dec 31

Bank

Bank

6,000

3,000

Trade Expenses A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 18

Cash1,200

Commission A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 27

Cash2,000

Rent A/c

Dr. Cr.

Table Supporting: Endorsement_of_Cheque
DateParticularsL. F.Amount (₹)DateParticularL. FAmount (₹)
2006

Dec 22

Cash2,300

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

Developed by: