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The ledger postings for accounts receivable and accounts payable can be done with the help of the double column cash book entries.Refer the data given below −DateDescriptionPRVNDiscount($)Cash($)DateDescriptionPRVNDiscount($)Cash($)Sep 1balance b/d6000Sep 5K & Co A/c106153600Sep 3D &Co110122500Sep 7purchases126850Sep 9Income (interest)122200Sep 12Machinery1203800Sep 15Sales1287800Sep 17Stationary expenses105500Sep 28D & Co11025650Sep 20Office furniture107620Sep 30Sales1248000Sep 23K &Co10625870Sep 30salary1091800Sep 28balance c/d1311037251404025140Oct 1By balance b/d13110SolutionThe solution is as follows −Accounts payable ledger                                K&CO                                               ... Read More

In double column cash books, there will be two cash columns on both the credit side and debit side. One column records the cash transactions and the other column records bank transactions.Single column cash books will become double column cash books, if we add bank transaction column to single column cash book format.Most of the organisations will prefer a double column cash book than single column cash book, because it has bank balances at the end each period. Ledgers for both cash transactions and bank transactions are maintained separately.FormatThe format of double column cash book is as follows −DebitCreditDateDescriptionVNPRCashBankDateDescriptionVRPRCashBankFor recording ... Read More

Following steps are followed while making entries in ledger account −Opening balance and closing balance in cash books are not posted in ledger accounts.Debit side entries of the cash book are posted in relevant accounts on the credit side in the ledger.Credit side entries of the cash book are posted in relevant accounts on the debit side in the ledger.Page numbers or account numbers of ledger accounts of respective entries are recorded and written in PR or posting reference columns of single column cash books.ExampleConsider an example for using the below cash book column to prepare general ledger (salaries)DebitCreditDateDescriptionVRPRAmountDateDescriptionVRPRAmountYYYY July ... Read More

The word “contra” means opposite or against. This entry involves both a cash account and bank account. In this, entries are recorded on the debit and credit sides of the cash book at same time.These entries are not recorded in ledger accounts because both aspects (credit and debit) are in double column cash books. Letter “C” is written in the posting reference column which represents contra entry.If cash is taken from the bank, due to business purposes then contra entry is made. If cash is taken for personal use, then it is recorded in the credit side of the bank ... Read More

Refer the data given below −TransactionsFeb 1          Cash balance                                                               $120000Feb 1          Bank account balance                                                  $200000Feb 2          Received cheque from Mr. B                         ... Read More

Refer the data given below to prepare a bank account in a ledger with a single column cashbook −DATEPARTICULARSVNLF$DATEPARTICULARSVNLF$2010Balance b/d700002010Mar 1Customer(Beingcheque A/creceived)20000Mar 1Bank A/c(Beingcheque deposited)22000Mar 5Bank A/c(Being amount withdrawn)25000Mar 12Purchases(Being goods bought for cash)47000Mar 9Sales A/C(Beinggoods sold for cash)35000Mar 24Bank A/c (Beingcash deposited)17500Mar 20Sales A/c(Beinggoods sold for cash)38000Mar 31Salary A/c(Beingsalary paid)14000Mar 31Balance c/d87500188000188000April 1Balance b/d87500Mar 1 - Bank balance $180000Mar 21 - Paid Mr.B by cheque $20000Mar 31 - Paid rent by cheque $8000Mar 5 - Deposited cheque from A $22000May 25 - Deposited into bank $17500SolutionThe solution is as follows −DATEReferenceJ/F$DATEPARTICULARSJ/F$20102010Mar 1Balance b/d18000mar 5Cash A/c25000Mar 5Cash A/c22000mar 21Mr.B20000Mar 25Cash A/c17500mar 31Rent ... Read More

Let us understand how to make the respective entries in the single column cash book with the help of the given data.May 1 Cash in hand $50000May 1 Bank balance $160000May 4 Received a cheque from a customer “A” of $18000May 5 Deposited customer “A” cheque in Bank.May 8 Cash withdrawn from bank for business purpose is $15000May 11 Goods sold for cash $28000May 14 Goods bought for cash $53000May 19 Goods sold for cash $40000May 21 Paid Mr.B by cheque $16000May 25 Deposited into bank $18000May 30 Paid salary in cash $12000May 31 Paid rent by cheque $7500SolutionThe solution ... Read More

Single column cash book is a T shaped cash book. It is called a single column cash book because; it has only a money column on both credit and debit sides and records cash transactions.It is divided into two parts having debit on the left hand side and credit on the right hand side.FormatThe format of a single column cash book is as follows −DebitCreditDateDescriptionVRPRAmountDateDescriptionVRPRAmountPurposeThe purpose of each column in single column cash book is explained below −DateIt records date, month and year of transaction (both receipts and payments). If more than one transaction happened in the same month and ... Read More

Cash book records all the transactions related to cash in an organization. Transactions are recorded according to their type (debit or credit). These are recorded in chronological order. Cash book can be both a journal and a ledgerFeatures of cash bookThe features of cash book are explained below −Act as both journal and ledger − Cash books records transactions as it happens and posts the transactions.Substitution − It serves as an alternative for cash accounts.Dual entry − Cash book has two sides namely, debit side and credit side.Identical − Debit side (total) = credit side (total).Debit balance − Business will ... Read More

The word “cash” represents the monetary instruments (currency etc.) and the word “book” represents the record available in written format. Thus, a cash book can be defined as the record of business transactions in a particular period.In other words, a cash book records all transactions of cash receipts and disbursements (includes both bank deposits and withdrawals). Cash book is divided into two parts namely, cash payments and cash receipts.Transactions which are not recorded or are excluded in cash book are as follows −Transactions related to bank (payments made through checks in receiving or paid).Non-cash transactions.Discount making or discount received.Cash book ... Read More