Double Column Cash Book :

The most common double column cash books are

i. Cash book with discount and cash columns

ii. Cash book with cash and bank columns.

i. Cash Book with discount and cash columns

On either side of the single column cash book, another column is added to record discount allowed and discount received. The format is given below.

Format

Double Column Cash Book
(Cash book with Discount and Cash Column )

Debit                                                                                            ………………………………..                                                                                             Credit

Date	Particulars	R N	L F	Discont  Allowed Rs.	Amount   Rs.	Date	Particulars	R N	L F	Discont  Allowed Rs.	Amount Rs.

 

It should be noted that in the double column cash book, cash column is balanced like any other ledger account. But the discount column on each side is merely totalled. The total of the discount column on the debit side shows the total discount allowed to customers and is debited to Discount Allowed Account. The total of the discount column on the credit side shows total discount received and is credited to Discount Received Account.

Illustration 2: Prepare a Double Column Cash Book from the following transactions of Mr.Gopalan:

       Rs.

2004      1 Jan	Cash in hand	4,000
6	Cash Purchases	2,000
10	Wages paid	40
11	Cash Sales	6,000
12	12 Cash received from Suresh and	1,980
	allowed him discount	20
15	Cash paid to Meena	2,470
	and discount received	30
27	Cash paid to Radha	400
28	Purchased goods for cash	2,070

 

Solution :

    Double Column Cash Book of Mr.Gopalan

(Cash book with Discount Column)

Dr.                                                                                                                                                                                                                                                  Cr.

Date	Particulars	R N	L F	Discont  Allowed Rs.	Amount   Rs.	Date	Particulars	R N	L F	Discont  Allowed Rs.	Amount   Rs.
Jan1	To Balance b/d				4,000	Jan 6	By Purchases A/c				2,000
Jan11	To Sales A/c				6,000	Jan 10	By Wages A/c				40
Jan12	To Suresh A/c 20			20	1,980	Jan 19	By Meena A/c			30	2,470
						Jan 27	By Radha A/c				400
						Jan 28	By Purchases A/c				2,070
					_______	Jan 31	By Balance c/d				5,000
				20	11,980					30	11,980

1-Feb

To Balance b/d

5,000

 

ii. Cash Book with Cash and Bank Columns

When bank transactions are more in number, it is advisable to open a cash book by providing a separate column on either side of the
cash book to record the bank transactions therein.

In such case, it is not necessary to open a separate Bank Account in the Ledger because the two columns in the cash book serve the purpose of Cash Account and Bank Account respectively. It is a combination of Cash Account and Bank Account. The format of this cash book is given below.

Double Column Cash Book

Debit Side                                                                    (Cash book with Cash and Bank Columns)                                                                   Credit Side

Date	Particulars	R N	L F	Cash Rs.	Bank  Rs.	Date	Particulars	R N	L F	Cash Rs.	Bank  Rs.

 

There are two amount columns on debit side one for cash receipts and the other for bank deposits (i.e., payment made into Bank Account). Similarly there are two amount columns on the credit side, one for payments in cash and the other for payments by cheques respectively

Contra Entry

When an entry affect both cash and bank accounts it is called a contra entry. Contra in Latin means opposite. In contra entries both
the debit and credit aspects of a transaction are recorded in the cash book itself.

Example :   Cash paid into bank

Bank A/c                                                       Dr.               x x x
To Cash A/c                                                                x x x
(Cash paid into bank)

This is a contra entry. As the cash book with cash and bank columns is a combined cash and bank account, both the aspects of the transaction will be entered in the same book. In the debit side ‘To Cash A/c’ will be entered in the particulars column and the amount will be entered in the bank column. In the credit side ‘By Bank A/c’ will be entered in the particulars column and the amount will be entered in the cash column.

Such contra entries are denoted by writing the letter ‘C’ in the L.F. column, on both sides of the cash book. They indicate that no posting in respect thereof is necessary in the ledger.

Example :  Cash withdrawn from bank for office use.

Cash A/c                                                     Dr.          x x x
To Bank A/c                                                   x x x
(Cash withdrawn for office use)

This is also a contra entry. In the debit side ‘To Bank A/c’ will be entered in the particulars column and the amount will be entered in the cash column. In the credit side ‘By Cash A/c’ will be entered in the particulars column and the amount will be entered in the bank column.

Such contra entries are denoted by writing the letter ‘C’ in the L.F. column, on both sides of the cash book. They indicate that no posting in respect thereof is necessary in the ledger.

Illustration 
Enter the following transactions in the double column cash book of Mr.Rajesh and balance it.

2003 Aug. 1	Opening Balance : Cash in Hand Rs.4,250
	Cash at Bank Rs.13,750
2	Paid to petty cashier Rs.2,500
2	Cash sales Rs.1,750
3	Paid to Arun by cheque Rs.3,750
3	Received a cheque from Mr.Ram Babu Rs.4,500 paid into
5	Received cheque from Mr.Jayaraman Rs.6,000 paid into bank
8	Cash purchases Rs.2,500
8	Paid rent by cheque Rs. 2,500
9	Cash withdrawn from bank for office use Rs.2,500
10	Cash sales Rs.3,750
14	Stationery purchased Rs.1,000
20	Cash sales Rs.6750
21	Paid into bank Rs.10,000
23	Withdrew cash for personal use Rs.1,000
25	Salaries paid by cheque Rs.9000.

 

Solution:

Double Column Cash Book of Mr.Rajesh

(Cash book with Cash and Bank Column)

Dr.                                                                                                                                                                                                                                           Cr.

Date	Particulars	R N	L F	Cash Rs.	Bank Rs.	Date	Particulars	R N	L F	Cash Rs.	Bank  Rs.
1-Aug	To Balance b/d			4,250	13,750	2-Aug	By Petty Cash A/c			2,500
2-Jan	,, Sales A/c			1,750		3	,, Arun’s A/c				3,750
3	,, Ram Babu’s A/c				4,500	8	,, Purchases A/c			2,500
5	,, Jayaramans A/c				6,000	8	,, Rent A/c				2,500
9	,, Bank A/c		C	2,500		9	,, Cash A/c		C		2,500
10	,, Sales A/c			3,750		14	,, Stationery A/c			1,000
20	,, Sales A/c			6,750		21	,, Bank A/c		C	10,000
21-Jan	,, Cash A/c		C		10,000	23	,, Drawings A/c				1,000
						25	,, Salary A/c				9,000
				______	________	31	,, Balance c/d			3,000	15,500
				19,000	34,250					19,000	34,250
1-Sep	To Balance b/d			3,000	15,500

 

Points to be remembered while preparing cash book:

S. No.	Transaction	Debit/Credit side of cash book	The column in which the amount to be entered
1.	Cash/ M.O./P.O. – received	Debit	Cash
2.	Cash paid	Credit	Cash
3.	Discount allowed	Debit	Discount allowed
4.	Discount received	Credit	Discount received
5.	Cash deposited in the bank	Debit (C) Credit (C)	Bank Cash
6.	Cash withdrawn for office use	Debit (C) Credit (C)	Cash Bank
7.	Cheque received	Debit	Cash
8.	Cheque deposited into bank	Debit (C) Credit (C)	Bank Cash
9.	Cheque received and deposited into bank for collection immediately	Debit	Bank
10.	Cheque issued	Credit	Bank
11.	Customer directly paid into bank	Debit	Bank
12.	Cheque deposited and dishonoured	Credit	Bank
13.	Cheque issued and dishonoured	Debit	Bank

.14	Bank charges	Credit	Bank
15.	Interest allowed by bank	Debit	Bank
16.	Interest on overdraft	Credit	Bank
17.	Payments directly made by the bank as per standing   Credit Bank instructions	Credit	Bank
18.	Amounts directly received by bank as per standing Debit Bank instructions	Debit	Bank