Question

Prepare double column cash book from the following transactions for the year August 2017: 01 Cash in hand 17,500 01 Cash at bank 5,000 03 Purchased goods for cash 3,000 05 Received cheque from Jasmeet 10,000 08 Sold goods for cash 7,000 10 Jasmeet’s cheque deposited into bank 12 Purchased goods and paid by cheque 20,000 15 Paid establishment expenses through bank 1,000 18 Cash sales 7,000 20 Deposited into bank 10,000 24 Paid trade expenses 500 27 Received commission by cheque 6,000 29 Paid Rent 2,000 30 Withdrew cash for personal use 1,200 31 Salary paid 6,000

Accepted Answer

[object Object] — This question requires preparing a Double Column Cash Book with Cash and Bank columns. Key points to note: 1. Opening entries : Cash in hand (₹17,500) and Cash at bank (₹5,000) are recorded on the debit side as Balance b/d. 2. Aug 05 transaction : Cheque received from Jasmeet is NOT recorded on this date. It is recorded only when deposited into bank on Aug 10. 3. Contra Entry (Aug 20) : When cash is deposited into bank, it affects both columns - Bank column (Debit) and Cash column (Credit). This is marked with 'C' for contra. 4. Aug 27 : Commission received by cheque is recorded directly in the Bank column on the debit side, assuming immediate deposit. 5. Balancing : Both columns are balanced separately. The closing balances become opening balances for the next month.

Dr.					Cr.
Date	Receipts	L.F.	Cash ₹	Bank ₹	Date	Payments	L.F.	Cash ₹	Bank ₹
2017 Aug 01	Balance b/d		17,500	5,000	2017 Aug 03	Purchases		3,000
Aug 08	Sales		7,000		Aug 12	Purchases			20,000
Aug 10	Jasmeet			10,000	Aug 15	Establishment Exp.			1,000
Aug 18	Sales		7,000		Aug 20	Bank (C)		10,000
Aug 20	Cash (C)			10,000	Aug 24	Trade Expenses		500
Aug 27	Commission			6,000	Aug 29	Rent		2,000
					Aug 30	Drawings		1,200
					Aug 31	Salary		6,000
					Aug 31	Balance c/d		8,800	10,000
	Total		31,500	31,000		Total		31,500	31,000
Sep 01	Balance b/d		8,800	10,000

Explanation

Solution Steps