Columnar petty cash books consist of both debit and credit sides. In this book, there are many columns which record day to day expenditures.All the particulars (cash receipts and expenses) which are recorded all together in a single column are called a particular column and in other columns date of transactions of debit or credit is recorded.Amount received from the chief/head cashier is recorded in the debit column.Amounts spent are recorded in the credit column in each column.Debit balance = amount of cash receipt – total amount of cash paymentsFormatThe format of columnar petty cash book is as follows −TRCBFDatePVNTPP&TCSTEMELLF                                                                                    Here, ... Read More

We will understand how to enter the transactions in a petty cash book with the help of two examples which are given below.Example 1Transactions for July, petty cashier gets Rs.300/- in advanceJuly 2           Paid for kitchen supplies    Rs. 40/-July 5           Paid for birthday cake        Rs.95/-July 10         Paid for lunch                     Rs.85/-July 25         Paid for taxi fare                 Rs. 35/-July 28     ... Read More

Petty cash books are small cash books which record day to day minor business expenditures. Minor business expenditures include newspaper, fuel, casual labour etc.The person who handles petty cash and their recordings is known as petty cashier. Petty cash books have both debit and credit side and it records all the receipts on the debit side and all payments on the credit side just like a general cash book.Maintaining petty cash booksPetty cash books are maintained using following systemsOpen/ordinary system − Chief cashier gives a lump sum amount to petty cashier for a fixed time and after that fixed period ... Read More

We can prepare accounts receivable and accounts payable ledger postings by using triple column cash book entries. Refer the data given below −454 – Discount allowed ledger number (expense account)480 – Discount received Léger number (revenue account)SolutionThe solution is as follows −Accounts receivable ledgerM&CO            no. 28DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 5thCash311350April 5thDiscount allowed3118H&CO            no. 18DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 24Cash312200April 24Discount allowed3116Accounts payable ledgerS&CO            no. 42DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 3Bank311800April 3Discount Received3115April 19Bank312100April 19Discount Received3112XY Inc            no. 59DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 25Bank31630April 25Discount Received3114

Refer the data given below −TransactionsOn Nov 5th check received is not deposited on same dateNov 1       Cash in hand $950,    cash at bank $4500Nov 3       Paid to J & Co by check $1500    discount received $20Nov 5       Amount received from D & Co $1150    discount allowed $12Nov 7       Deposited cheque from D & CoNov 10    Stationary purchased by cash    $250Nov 15    Merchandise purchased by cash    $1450Nov 15    Cash sales (first half)    $2700Nov 16    Deposited into bank   ... Read More

Refer the data given below −TransactionsAug 1       Bank balance b/d                                        $28000Aug 1       Cash balance                                              $1200Aug 3       Paid cheque for laptop                                $1050Aug 11    Cash withdrawn from bank for office use     $700Aug 13   ... Read More

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