3.

cash book
Before talking about the cash book, let us know what is cash. Cash is a current asset which
consists of items used in day to day financial transactions as medium of exchange. cash
includes, currency notes made of paper, coins, demand deposits, money orders, checks and
bank overdrafts etc.

Cash book
The cash book is used to record receipts and payments of cash. It works as a book of original
entry as well as a ledger account. The entries related to receipt and payment of cash are first
recorded in the cash book and then posted to the relevant ledger accounts. Moreover, a cash
book is a substitute for cash account in the ledger. A company that properly maintains a cash
book does not need to open a cash account in its ledger.
1.cash book is a journal as well as a ledger
2.cash account shows only debit balance
3.only cash transactions are recorded in cash book

Types of cash book

There are four major types of cash book that companies usually maintain to account for their
cash flows. These are given below:
1. A single column cash book to record only cash transactions.
2. A double/two column cash book to record cash as well as bank transactions.
3. A triple/three column cash book to record cash, bank and purchase discount and sales
discount.
4. A petty cash book to record small day to day cash expenditures.( simple and
analytical)

Formats
A single column cash book to record only cash transactions.

A double/two column cash book to record cash as well as discount transactions.

 A triple/three column cash book to record cash, bank and purchase discount and sales
discount.

Definition of Contra Entry

Contra entry refers to transactions involving cash and bank account. In other words, any entry
which affects both cash and bank accounts is called a contra entry.
If a transaction requires entries on both the debit and the credit sides simultaneously, it is called
'Contra entry'.
a. When an account is opened with a bank and deposited cash in to bank account.
b. The firm's cash is deposited in the bank.
c. The cash is withdrawn from bank for office use.
d. The cheques received from debtors, are not deposited in the bank on the same day.
(The cheques received from debtors and deposited in the bank on the same day no contra entry
and a crossed cheque received and deposited)

A petty cash book/ ANALYTICAL PETTY CASH BOOK

Problems on cash book

2nd goods sold to bharath 40000

2nd reced 3500 in full settlement of 4000 from bharath

3rd purchased from ganesh 3000

4th sold goods for 35000 and received 25000 immediately

6th purchased machinery for 50000

8th withdrawn cash for office use 20000 and personal use 10000

9th paid life insurance premium 3000

30/12/ withdrawn for personal use 300.

30/12. Recd a cheque from raj 30000

31/12 Raj cheque deposited.

31st received a crossed cheque from poorvik 8000
1 BOD- 5000
6. And deposited on 7th