Enter the following transaction in Simple cash book for December 2017: 01 Cash in hand 7,750 06 Paid to Sonu 45 08 Purchased goods 600 15 Received cash from Parkash 960 20 Cash sales 500 25 Paid to S.Kumar 1,200 30 Paid rent 600
Simple Cash Book
| Date | Particulars | L.F. | Amount (₹) | Date | Particulars | L.F. | Amount (₹) |
|---|---|---|---|---|---|---|---|
| 2017 | 2017 | ||||||
| Dec 01 | To Balance b/d | 7,750 | Dec 06 | By Sonu | 45 | ||
| Dec 15 | To Parkash | 960 | Dec 08 | By Purchases A/c | 600 | ||
| Dec 20 | To Sales A/c | 500 | Dec 25 | By S. Kumar | 1,200 | ||
| Dec 30 | By Rent A/c | 600 | |||||
| Dec 31 | By Balance c/d | 6,765 | |||||
| 9,210 | 9,210 |
Note: The closing balance on December 31, 2017 is ₹ 6,765.
Explanation
A Simple Cash Book functions as both a journal and a ledger for cash transactions. The left side (Debit) records all cash receipts, while the right side (Credit) records all cash payments. The opening balance is always carried down to the debit side. The difference between the debit and credit sides represents the closing cash balance.
Solution Steps
Step 1: Identify Receipts (Debit Side) Record the opening balance (₹ 7,750), cash received from Parkash (₹ 960), and cash sales (₹ 500). Calculate the total receipts: 7,750 + 960 + 500 = ₹ 9,210.
Step 2: Identify Payments (Credit Side) Record payments made to Sonu (₹ 45), for purchased goods (₹ 600), to S. Kumar (₹ 1,200), and for rent (₹ 600). Calculate total payments: 45 + 600 + 1,200 + 600 = ₹ 2,445.
Step 3: Balance the Cash Book Subtract the total payments from the total receipts to find the closing balance: 9,210 - 2,445 = ₹ 6,765. Enter this amount on the credit side as 'By Balance c/d' to equalize both sides.