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    10 views23 pages

    FA Ch3.1

    Uploaded by

    abhi

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 23
    __ & CHAPTER erg Meu i ; j > To understand the need for preparing subsidiary books. > To understand the meaning and features of Cash Book. > To know the different types of Cash Book. 4, Simple Cash Book. 2, Two Column Cash Book. 3, Three column Cash Book. > Toknow the balancing and posting of Cash Book. > Tounderstand the concept of Petty Cash Book and Imprest System of Petty Cash Book. | Introduction We have already seen that all transactions are first entered in the journal in the order in which they occur and from the Journal they are posted to the respective accounts in the ledger. But this would involve a tremendous amount of work because each transaction requires a separate debit to the receiving account and a credit to the giving acount to bring into record the two-fold aspect of each transaction. Thus, when all transactions used to be recorded in the journal, the book became too unwieldy to handle aad the desired information to be extracted from the books of account was difficult to ane readily. Besides, the balance of cash in hand every evening could not be checked th egard to its exactness without much difficulty. sa terete, all cash transactions began to be recorded scparately in a book called the mae which later began to be used to record bank and discount transactions as well les cash transactions. By doing s0 daily checking of cash in hand and periodical Genk: a ing of cash in hand and periodical checking of bank balance was rendered quick and SUBSiIpy, JIARy iasne= pu eet le for good ms eee eet unts payable for goods boy, Y 7 know at sight the am ered Prompt payments en ON rey It is also essential to ste for goods so ket and prompt recovery of dues win ti and the amounts Tech is jp the mar Peeve! intain a, n merchant to main wards pooks also Se infor his bad debts. : ani *tomers and del ited to th Mat 5 inwards ants of cu! : the aceoy, tin turn the 80030 reveal the efficiency or otherwise f the ; al ikewise, Te’ ¢ sila be credited Fo will about amount A the conc”: credit instruments viz. Bills Re, 5 time to time- suppliers from ents of th : and purchases acne ese re bac and received. These instruments Ceivahy, Credit transact issory Notes ills Receivable Book and Bills Payable n° to books due dates of making and offen ng ‘ able and Pr‘ ae a and Bills Pay: te subside ‘informed abou! be recorded in sepi adea' which keep 4 merchan ts on due dates. idi b recovery of various accounts 0” | to keeP subsidiary book to recorg es i days 16 any times during a m The practi ical Se rather oat oe ‘as the total of subsidiary. Ponstet transactions jn lightenint the Jed ge Os a considerable saving of clerical labouy ate hooks = nly once a month in the ledger. ’ re are recorded in separate journals shia) poste about if t ansactions of sim! al, Thi Jd facilitate not only the division divisions 0! 5 job of posting in the ledger, as the postin f totals being transactions of similar nature. The system ich tran! + recorded in iv ines ee for it and by which tr ‘ or epared, is KO a = on the basis of which ed eof a eal Hee various books recording teansactinn se ia eae! are also called subsidiary books or books of original entry because one eons are first recorded in these books to be subsequently transferred to their the ledger. respective accounts in : Reasons for Maintaining (or Advantages of) Subsidiary Books ______ ~ Various reasons for maintaining the subsidiary books are given as under: @ Economy in Labour. If the transactions are recorded in the books of accounts directly, it will consume less time than if the transactions are recorded in the journal a separate ding ™: ‘k and then posted to the ledger. (i) More Accuracy. There will be more accuracy in the books of accounts as entries are made in total only and that too once in a month. be collected while i Availability of Information. Additional information can a ining a subsidiary book. For example, sales book can collect the information rel ie to the sales of different areas or of different salesmen. aot eee of Accounts. If specialised books are kept, it may be possible to Cee a aan 7 a account books. For example, the date of payment, cheque maining the crete acount e purchases book which will obviate the need 0 __ ©) Division of Work. There will be divi Journal there will be so many subsidiary aivieion of accounting work as instead of one (vi) Specialisati ae 7 ion and Effici account fic aot worl i ’ at Wo i i ec and his efficiency also increases. aaa oe “EB aa a pt Va — sca RY . Wr i Checking. The existence of separate books helps location of errors Y i oil aud jn case the trial balance does not agree, we ection SUBSIDIARY BOOKS yi? soks or books of prime entry or original entry are those books where idia" Pons are recorded in the books in the first instance and then posted to sot rosa e ase pooks. The various subsidiary books which are generally ine pusiness are : Me vee in a lare® (v) Sales Returns oan cas a mo Bought or Invoice) (or Returns Inwards) Book. C pase! (vi) Bills Receivable Book. ; ea i Bok (or Day) Book. (vii) Bill Payable Book. ji) Sales og Returns (viii) Journal Proper. vr) as Outwards) Book. oe rt of subsidiary books is given on the next page. lin 5 ification of Subsidiary Books sification of various subsidiary books and the types of transactions e aed jn these books are given as under : rect Cash Book. This book deals with the transactions relating to the receipts and ts of cash direct or through bank, discount allowed or received etc. and shows pase and and at bank. ot « purchases Book. This book is meant for recording all transactions of credit w@ of all goods, dealt in or of the materials and stores required in the factory and will a the total credit purchases of goods and materials made during a particular 7 Sales Book. This book is maintained to record all credit sales (of goods dealt jn) made during a particular period and will show total credit sales made during a particular period. (iv) Purchases Returns (or Returns Outwards) Book. This book records all returns of goods and materials previously purchased and will show total purchases returns during a particular period. (v) Sales Returns (or Return Inwards) Book. This book is maintained to record all sales returns made by the customers and will show the total returns inwards during a particular period. (vi) Bills Receivable Book. This book is maintained to record all bills received ftom the customers during a particular period. It will also tell the various dates on which Feyments are to be received by the business. (vii) Bills Payable Book. This book records all acceptances made by the firm and Indicate the various dates on which payments of various bills are to be made. oa Journal Proper. All those transactions which could not be recorded in any of We’ Subsidiary books will be recorded in this book. ri cash book will be discussed in detail in this chapter and other books will be sed in the next chapter. @ sey, ae £ £ § - uwIN}OD JuNoosiq uuinjog 4oog yseg Pure yueg yim qwunoosiq Ym 4oog “ee (p) ice ihe (0) yoog ‘e (q) yseg ous (e) a1eymasja Pepio9e jou Pentsoor Suonoesuen Pajydesoe sIGeAI900) ‘suinjes sejes suinjes seseyoind 40 Spicoas — wag seseyoing upeD, yoo | 400g I 4edo; SIGeAIS09) suuney, 4o0g suunjoy m” reunor (8) . sia (9) sees (gs) sees (p) semen (e) “eenunina @) ae SXOOs AuVIdIsans KS) oe . . . Ta ; CASH BOOK ., maintained to record the transaction: i wok e trar 8, relating to th i cast b rash ‘There are many transactions in a business relating t the eash ich jntenance of a separate book for this purpo ete me se. Mc ‘ ™ spe mains . us ‘ ‘oreover, control on cash is it sential ina ee ene cash book becomes an essential factor 1 Syn order tO OT hand or at b ent of cash. If the business man is interested to cig palace Of a evavoid the be Neen then cash book is to be maintained. It y then ined i r ¢ botheration of i . : so ntained in or e) of posting eve i 0 gh individually to Cash Aceount inthe ledger. ee ‘pel om Book a Journal or Ledger ? 5 wk plays dual role as a book of original entry as well as a ledger. It is a ‘i book because all cash transactions are first recorded in the Cash Book and si Cash Book posted to various accounts in the ledger. The recording of ipen Mons in the Cash Book takes the shape of a Ledger Account. As receipts of cash ‘ed on the debit side and payments of cash on the credit side, so there is no need wai Cash Account in the ledger. Therefore, Cash Book serves the purpose of a jaar acount From the above, it is clear, that Cash Book fulfils the functions of a subsidiary book godledget both. Kinds of Cash Book There are three types of cash books which are maintained in business according to its needs and convenience. These are : 1, Simple Cash Book. 3. Three Column Cash Book 2, Two Column Cash Book 4, Multi Columnar Cash Book. In addition to the cash book, the various business houses may also maintain petty cash book. 1 Simple Cash Book This type of Cash Book makes a record of all the receipts and payments of cash. All ash received in the form of coin, notes, cheques, postal orders, bank drafts or treasury tls will be recorded on the debit side and payments on the credit side. The ruling of hhistype of the Cash Book is as follows : SIMPLE CASH BOOK Cr. (Payments}| ate| Particulars Wh : : Glam yesh is received, it is entered on the debit side of the Cash Book in the amount longwith the name of the party paying the cash in the particulars column. _ d SuBs, ede 800 een received by the cashier is also via, 8) i as b id ii it @j, . Receipt number with whic oy, cash paid is entered on the credit side o f > ing, RN. (ReceiP! No cot Os ted by voucher a x. Each P ee No) cola and voucher number ig cs he Cae Ted iy the VN. (Voucl palancing the Cash Book vy daily, Cash Book should be bal Balancing ej nerves reel Fmd be equal to cash in hang’ At regular perio’ le balance show? y it should be equal to cash in hang’ lhe ee stted, Cash Book should always show a debit belo No ts an other ledger accoun! : : mistake or fraud has been comm aid can never exceed the opening balance we Us (ie, cash in hand) because total cash P! cash received. Posting of Simple Cash Book - mar ee appearin Fobit side ofthe Cash Book is not posted to any Opening bal aver asit¢ m the opening entry recorded in the journal proper. ‘The other transacti ded on the debit side of the Cash Book are posted to the credit of the respective the ledger to complete the second aspect re the entry as the first aspect of the transaction has been covered by giving debit to Cash A the entries appearing on the credit side of the tive accounts in the ledger. account in the I ‘Account in the Cash Book itself. Similarly, Cash Book are posted to the debit of the respect Cash Book and post them into ledger : Enter the following transactions in Simple 2021 2021 July duly 1 Balance of cash in hand @ 15,000 20 Received commission & 650 8 Purchased goods for cash from X Paid commission ~ 550 for & 3,200 28 Paid to Satish on account & 7,150 15 Sold goods for cash €4,800toY. 31 Paid salary to the office clerk % 1,000 and office rent = 600. SIMPLE CASH BOOK Particulars By Purchases By Commission By Satish By Salary By Office Rent By Balance c/d LEDGER SALES ACCOUNT By Cash Alo et py Bo COMMISSION Accoy; eee | INT z 2021 550 | July 20 By Cash Aye PURCHASES Ajc z 3,200 SATISH’s ACCOUNT z 7,150 OFFICE RENT ACCOUNT z L 600 SALARY Acco |_| a z 1,000 column Cash Book or Cash Book with Bank Column Two 7 f Cash Book, there are two columns of a1 ths On records all cash transactions and g ne CO mount on each side of the cash ‘econd column records all bank . The specimen format of such a cash book is as follows : apssalion CASH BOOK (TWO COLUMN) L.F.| Cash (%) | Bank (%) |] Date Particulars [uF Cash (%) Bank (2) palancing i i in Simple Cash n of such Cash Book is balanced in the same way as in Simp! eee of balancing is similar in case of bank column also. Essentially, two tama wath book represents two accounts, i.e., Cash Account and Bank Account. Therefore, Cash Account and Bank Account are not required to be prepared in ledger when two column cash book is made. Cash columns represent cash account and must have debit brn A oe reviusly, Bank column may have debit or credit balance. If amount vit rey ees deposited in the bank, it will have credit balance or overdraft . : iene thecash book, Following points are worth noting in connection wit * i ht in as | Amount brought as capital. If a business is started, the ee ane {ital into the business will be written in cash column if a is rulara "To Catal Ac nttt if it is directly deposited into the bank pal es ill be written. If the opening balances are bro a i gvardvafiathe baile " or “By Balance b/d” in case there is opening banl SUBSIDiA, RY 5 10 2. Cash pai «. paid into the bank, it should Ny paid into bank. When cash is aa © imn on the debit side tb . Bank Account b: i i yy entering the amount in the b@ ‘ Book as “To Cash” and credited to Cash ‘Accoun! by oe rin he tack of in thet column on the credit side of the Cash Book 08 By 08 ein the ledger air a) jon needs s tion in the Cash Book, so i gone out of the business. This transac) 4 appear i (i.e., Cash Account and Bank Account) involved 4P! h side of the Cash Book i : - his entry on C26 ae to ing. ® written in the L.F. column against # i ded on the opposite side. S ica that the contra effect of this transaction Pook ‘kno n as Contra Entry. is te entry appearing on both roe similar cash is withdrawn from the}, a 8. Cosh we roid be to debit Cash Account by ore and he amount in 2 : ide of e Cash Bot ; A it the ne ane url tb eee aa fecount and Bank Account) involved appeaT a the Cas ik. ae ‘pt of cheque. Ifa cheque is received and kept in the a ls (e. not sen 4 ee Por collection), it heaviid be debited im the Oe column; but if ii wet tn tt re immedial y Theque Kept in the cash box pank for collection, contra en Later on when cD’ Be k column recording the fact of that cheque has gone oy, f office. , ; 7 Payment by Cheque. Such payments should be credited in the bank column of the Cash Book. 6. Dishonoured C! it should be credited in the ank for collection is dishonoured, tt to the b: ook to cancel the previous debit theque. If a cheque sent pank column of the given to the bank column when the cheque was 7, Bank charges and payments made by the bank on behalf of the customer. e credit side of the Cash Book These entries should be entered in the bank column on thi as they reduce the balance at bank. With introduction of bank column on a separate bank account in the ledger. The ban! personal account and the cash account is real account. bank column of the cash book the rule of debit and credit applicable to personal accounts should be followed i.e. debit the receiver and credit the giver. Posting of Two Column Cash Book 1 Opening balances of cash and bank columns are not posted to any account a: come in the Cash Book from the opening entry in the journal. 2. Contra entries are not posted to any account a the di i 3 t of them has been compiled in the Cash Book itself. : s tae duslaspect in TOPS : both sides of the Cash Book there is no need for ik account maintained by an enterprise isa For recording transactions in the s they ILLUSTRATION 2 Enter the following t1 i i eS ing transactions of M/s AR Retailers in Two Column Cash Boo! June 1 Business i ona Burne commence with: June 23 Furniture purchased Cash at Bank on through Cheque 2,260 ep eee ,000 June 25 Cash paid by Abhijeet in full 3,500 settlement 1.960 — Bank 8 ‘or Expey xpense’ 4 payment June 28 ses pe Salary pai 5,500 fa rough Cheque 7,500 June 29 Stati, ald through Cheque asa 18 receive’ 8,250 June 30 Paig im Purchased fan yt" cash 58 ted in Bank 6,500 June 39 Depositen st stamps 180 16 cgsh d°PO* abhijeet 5,500 in Bank all cash in pt g CAS) id to Abhi excess of Mee Gots 10 eg from Abhijeet 3,500 c 1500 woh Receive 3 che please see next page) 3 opie Balan: raso Oct. 25 coin Re (Overdraft) 25/500 Cet, 26 Oa posited in Bank 24,500 ost S Purchases 13,400 Oct. 27 Ot ash Received from Abhay Oct, 29 wl? Cas ‘and half amount deposited in Bank 45,500. Oct. 30 salaries paid to staff by cheque 14,750 Oct, 30 eT ash Sales 26,750 Oct. 31 1 terest charged by Bank 2,150 te cash deposited in Bank 10,500 fh Withdrew from Bank for personal use 4,570 SOLUTION (Please see page III/1-11) ILLUSTRATION 4 ing transactions of AVR Technologies} i the followin 2001 Two Column Gash Books — Credit Purchases from ‘ Aatmaj Cash withdrew from Bank for office 12,450 Office stationary purchased 3.500 Cheque paid to Aatmaj in full settlement, 25,400 Rent paid in cash 7,500 Bank Charges 3,870 Postage and Stamp Charges paid in cash 150 Deposited in Bank all cash in excess of 2,710 Prepare a Double Column Cash Book with Cash and Bank ‘tansactions of Swapnil Technologies: ‘net 2 2021 (é.1 Business commenced with: Oct, 22 Cash in Hand 8,750 Cash at Bank 12,500 Oct. 23 5 Goods sold to Balgopal of Oct. 25 * 12,000 plus 18% IGST (9 Wages Paid in Cash 1,500 2 Cash Received from Oct. 26 Balgopal and Deposited in Oct. 27 tas gait Goods Purchased from Oct, 29 of @ 15,000 plus CGST and SGST © 6% Oct. 30 Seg Benth . Oct. 31 “19 Gagged through Cheque 2,600 S sold and a Cheque Oct, 31 Suton 9,550 N Please see page III/1:12) Column from following z Cash withdrew from Bank for personal purposes 1,750 Stationary Purchased 800 Advance Cheque received from Balgopal for placing a purchase order. 6,600 Cash Sales 7,500 Cheque paid to Rama in full payment of his claim. Cash Withdrew from Bank 5,850 for expenses Office Eepenien 3,570 ‘Advance cash paid to Rama for placing a purchase order 7,000 Cash Deposited in Bank in excess of 2,500 = z a/ a] _ose've foac'se ose've o00'z | o0s‘t pp sourjeg Ag] og eunr = osz‘eL (9) o7y yueg Ag] o€ eunr | osz‘eL (9) 27 seo o1| og oun ost ory dwieis 2 e6ejsod Ag| 6z eunr (9) ory yUeg o1| gz eunr — | 008 ayy Areuoneis fa] 6z eunr yealyay o1| sz eunr oos‘e = ory Areyeg Ag] gz ounr | oos‘e yooliuqy o1| zz eunr oos‘s — (9) o7v seo Ag! 92 eunr | oos‘9 = (9) 97v used OL} 61 eunr osz'z = ory einyuung Aa] ezeunr| — | osz'e ayy sales 01] 91 eunr oos‘9 (9) ony yueg Ag] 61 eunr | OOS'Z = avy sees o1| zt eunr 00s‘ = (9) o7v useo Ag] g eunr - oos‘t (9) o7y yueg OL] g eunr - oos‘e ory seseyoung Ag] €eunr | 000'r | 00S's ory reuded o1; 1b eunr 1z0z tzoz —Q) Q) a | &@ mueg | ysea |-47 sejnoped [ e1eg yueg | yseo | 47] JBITON EE YOoR YSeD UUIN|OD OML SJO//239H UV S/N JO SYOO OU} UI (Z NOILWHLSN7) NouNT0s o6e'sz's| ost‘09"t o6e'ez't| ost'09"1 ooo'0s | o1z'z po eouejeg fa] Le 190 — | ops'se (9) ory yueg Ag] LE 190 — jose seBieyo sdwieig e6e3s0q Ag] Of 190 ozs'€ = seBieyd yueg Ag! OF 190 | — | oos'z opy wey fa] OF 190 | 0ov'sz = feuney fa] 62 290 — | oos‘e Areuoneis 80140 Ag] £2 90 osp'zt . (9) a7v seo Aa] 92 190 | OPI 'SZ = (9) 2/v useo OL] Le PO ozsp = ony sBumerq Ag] €z PO} — | OSr'Zt (9) o7v MUeE OL) 92 190 — | oos‘or (9) ov jue Aa] Zz 390 | OOS‘OL . (9) a/v used OL} 2% 10 osi'z - sasuedx3 ysesequ| Ag] 12 20 . 0S2'92 ory Sales OL] 6L PO osz'bh . ony Miele Ag] 21 90 | OSL'2e = (9) 97v used OL] ZL 190 — | osz'zz (0) ony jue fa] Zz 90 | =— | O0s'sr Keyay OL} 21 0. = oor'et ony eseyoing Aq] $190 | OOS'Sr - ofy aseyoind OL} SPO — | oos‘ve (9) ory sueg Aa] 390 | OOS'rz a (9) vv yse9 OL! » PO o0s'sz, = P/q eoueleg Aa] 1 00 — | osr'sz pq soured OL! 4 190 = oo a o 1zoz : -_ 1zoz Q ea | @& i Q) : yuea useo \a7 aeinomed eg ued yseg |47 seine e1eg & WOOG USED ULENIOD OME seBojouuse, HAY Jo S\oog etn UL (e NOLLwuLSsN TW) NoUNtICS = &/ os9'er | o1v'oe o69'er | o9z'9e sg 06z'91 | cose | pp eourreg fg| te | = ‘ne - ovo'e (9) o7v queg Aa] Le 0 i 000'2 ewey Ag! Le 00 = ozs‘ on Sesuedx3 e01N0 Ag} OF 190, ose's = (2) vv used Ag] 62 190 | ovo'e = (9) o7v use o1] Le WO 006 = 2M indul LsOs fal Zz 0, = ose's (9) o7y ueg OL] 6z 190 006 a ony indul 1sD9 Aa] Zz “PO - oos‘z ony sees 01] 92 190 o00'sL =- ewey Aq} Zz 90 | oo9'9 oa redoBleg OL] sz 190 - 008 ony Areuoneig Aa] €z 190 | oss‘6 = OW SAS OL! 6 WO osz't - s6umeiq Aq} Zz 90 | oo0'z = (9) 7v used o1! ZL DO oos'z - one fal er wo} — | oaiz ndino ASHI OL} ZO = o00'%t (9) ov sue Aa] ZL 190 = 000% redoBleg 01} Z1 190 a oos't ony seBem Aa! 6-0 | oos‘zi | osz'e ony teudeg o1] 1 190 1zoz tzoz \ ae Q) e ae Q) Q) \ muea | useg |4-7 sejnoed era | weg | yseg |47 sejnomeg a1eq \ 4OOgG YSBD uUINnjOoD OML Se1Bojouyoe, 1udems jo sj00g oy) U} \ (v NOLLVHLSNTWD NOLLNI10Ss it tha” s4 y90e 4 s cash Book or Cash Book with Discount — = = and court sh Book, there are three columns of amount — Column = pe 0 Ca jumn, Cash transactions column and Kee side of Cash } s in aco three column cash book is as follows Fansactions column. formal . CASH BOOK (THREE COLUMN) Lu in Bank ti Cr. piscoun} Cash LE. [btscount| . Fer Tl : ; js only memorandum column and not based on th olan in allowed by a creditor to a debtor when the tate me the : purchased by him either immediately or within asl Hod Itis : , ecified period. It i en of gorren to a debtor for making an early payment, Discount ree is oe wt allowed is a loss. o «ise jgncind h and bank columns are done i : F aang of cash ani ‘one in the same way as explained in qe ba! cash book. Discount column of such cash book on both sides will not be 10 NG put simply totals are done, ng of Hee Column Cash Book posting of cash and bank columns will be same as we have described in case of 1 Peach Book. Bach item of discount allowed appearing on the debit side of the spk will be posted to the credit of respective personal account and total of discount nn should be posted to the debit side of Discount Account with the words “To Sundry wa or ‘Amount as per Cash Book”. Similarly, each item of discount received aring on the credit side of the Cash Book in the discount column will be posted to the jit of respective personal account and total of discount received column should be pated to the credit of Discount Account with the words “By Sundry Accounts” or “By jnount as per Cash Book”. ILLUSTRATION 5, Prepare a Three Columnar Cash Book from the following transactions : a 2021 in Jan. 1 Cash in Hand 15,000 and at 14 Received ¥ 1,250 from Tarun Bank 4,000, and allowed him a dis. 40. * Bought funiture for € 2,000 18 Sent a DD to Satish for 1,750. ‘issued a cheque, 20 Paid LIC premium @ 355. O Dene ' sie % 6,000 into Bank. 25 Withdrew % 800 by cheque for 0p, ugh Goods for cash 2,500. personal use. ‘id Vikram 850 in full ION (Please See next page) b osz‘oL yo aourjeg Ag sBumeiq Ag sBuimeig Ag ory s.usnes Aq wena fq seseyoing Ag (0) queg Ag eunyuing fg SUBIND}Ued sos'9 0sz'91 P/Q eourleg OL 4008 HSVO osz'h 000'St une) OL] pL (9) useg oL | 9 P/q eourjeg o1 Sidjasay (Ss NOLLVeLSNTH) NOLLNI0S woe Mehta stati a ‘on prepare three column Cash Book forthe, eames ee z cont i Cash at goods for € 24,000 plus IGST @ 19 noon Parad paid by cheque item Mi Bate, ep Pm rchases of € 6,000 less trade discount 5% plus CGST and @ 6% each sa ed postage stamps wry sales deposited into bank (including CGST ana sost -| ”"™ 000 each) 12,00 jp for personal Use 773200 ved from Mahesh, a debtor, cash % 8,000 and Che. jue % 8,0 : Reeth deposited into bank, allowed % 1,000 as cash discount oe vag [window from bank for office use 16,000 19612? | paid salaries soe gs 36 Paid Rent = 10,000 plus CGST and SGST - % 600 each 419 | Paid Ms. Rohan & Co. by cheque, cash discount allowed by him wptl?® | 9,000 48,000 198 Received a cheque from Subhash for sale of goods; sale value 4pil23 | "16,000, CGST and SGST charged extra @ 6% each and deposited in Bank on the same day spel 25 Paid M/s. Batra cash ¢ 6,000 and % 10,000 by a cheque, received cash discount 720 rl 26 Manoj, a customer, deposited into bank directly 22,000 jpri 29 | Withdrew from bank for personal use 14,000 April 30 Bank charged commission 2,000 plus CGST and SGST @ 6% each April 30 | Withdrew from bank for paying income tax 10,000 SOLUTION In the books of Mehta Stationery House THREE COLUMN CASH BOOK Particulars L. | Dis-| Cash | Bank | Date Particulars F. |count | € L.]ois-] cash | Bank Fpount| z= |e 202i (ot eBaars bi 1,10,000|April3 | By Purchases Alc | 24000 ese 2,00,000 Apri | By input IGST Ac -| 280 mu TeOupt COST Ae 12,000 April9. | By Purchases Ac 5700) - hig re 99ST A 42,000 (Note t) Pele ,000 16,000 [Apri9. | By Input CGST Alo wel - hits roi +800 Apri | By Input SGST Ac we] halogen c — [Apri t0 | By Postage Ale 4,000 Bale 16,000 {April 14 | By Drawings Alc g200] April 26 | To Mano invoice. Ther 3 m Purchase iM pe calculated as follows: Notes: (1) Trade Disccunt is deducted frot ‘Amount of Purchases of CGST and ‘SGST levie 6,000 Purchases 300 Less: Trade discount (5% of 6,000) 5,700 342 ‘Add: CGST (6%) 342 SGST (6%) 9384 Iticolumnar Cash Book after, CGST and SGST will be ley, ed, large business enterprises. The (4) Mul Multicolumnar cash book is usu: receipts and payments sides of this frequently needed for making cash 1 stationery, salaries, wages, miscellaneous re occur again and again. Cash transactions pe) it i i olumns and the ledger. In this way postil only posting of the total book are divided ransactions such ceipts, miscel taining to is posted in their accounts opened in the | occurring again and again is not required, made in their respective accounts. Mini-Max Cash Book This type of cash book can be maintained to have a control o: a three column cash book with a difference that if on any day cas the minimum amount to be maintainet to be maintained will be made up by withdrawing cas! entry. Similarly, if on any day cash in hand is found to amount of. cash in hand to be maintained, the excess cas! bank by passing a contra entry. However, if cash in hand lies between ally maintained by 1 into such columns which are as cash sales, printing and Jlaneous expenses etc. which columns provided in the cash lumns like discount ing of cash transactions 1 of various columns is total of such col n cash in hand. It is like h balance falls short by din hand, the shortage of minimum cash in hand h from the bank by passing be in excess than thi h in hand will be de the minimum am maximum balance of cash to be maintained, no contra entry will be ma or deposit of cash in to bank. pn Coe only BOOK of Original Entry - ps the OF ed S yook is used as the only book of o> : WF cash beveactions are recorded on chron ane entry ‘ , it records a en ological Td8 all types of wot e of cash note al types of transactions ae Sand when they take ' ain ee illustrated in Illustration No, 10, Sh and credit) are rece i, b00 {in Cash Book _ , eee = burden the main Cash p, “th ee pl psirable to burde Book with numer — “i i »¢ i ‘ous 1 ee oe clled “Pey Ca hace ota real PDE on Herat oe Gach Book is kame oo i8 usually maintained, The ne 05° the Petty Cas) ee Own as petty Cashier. All sm, Il ed. The person de nig are recorded in the Petty Cash Book. all payments to be got y cas! ge of a co 7 V the following transactions in the simple Petty cash book. nt 2021 gt Jan, wo pesivd cheque for = 1,000 to 7 Balance due to Bindu paid & 60 apne oe stamps & 50 : et auto charges of the salesmen int post 4; eft stationary = 80 28 Paid Coolie & 99 gent a Telegram © 70 29 Purchased Paper clips = 40 1 paid for cartage € 50 i Paid tiffin charges for customers oa (BBM Bangalore, 31 Paid electric charges Rs 80, Dec. 2006, Modified) soLUTION SIMPLE PETTY CASH BOOK Particulars To Bank A/c By Postage A/c By Stationery A/c By Telegram By Cartage By Tiffin Charges By Binder’s Alc By Auto Charges By Coolie By Paper Clips By Electric charges By Balance cid To Balance b/d — es van SUBSi0,, iy 8 Analytical Petty Cash Book == . A The best method of recording petty cash payments is to enter a 4 ‘ook maintained in a columnar form. In such @ Petty Cash Book, a M ing Pe each usual head of expenditure and for the total small cash ee tea Columnar Petty Cash Book saves unnecessary labour used in posting oak ts ji 8 nM, ; cash payment separately in the ledger as only totals of various columns a em 4, in the ledger. This book is also known as Analytical Petty Cash Book bee, Te ty ha My, ‘aus Do small cash payments get automatically analysed when they are ep, 8 the y, wn respective columns. ny Ruling of Analytical Petty Cas ~~ Cash Book Ci Sait Petty Cash fhe he Analytical etty Cash Book is given an =a The ee ruling of #! PETTY CASH BOOK Statio- | Cart- | Conve-| Pos: age | yance Ee EP ee ES = _| seg nery & petty cash book, the following points must be taken tere ed in ———_ Printing While maintaining a into consideration : @) The amount fixed for petty cash shoul relatively fixed period say for a week 01 out of that amount. (ii) The amount to be reimbursed to the petty cashier must be supported by the vouchers alongwith a statement of total payments. (iii) All vouchers should be filed in order. (iv) The petty cashier should be authorised to make payment No payment should be made by the petty cashier without th cashier, if the amount is more than the specified limit. (v) The petty cashier should not receive any cash except payments. In the petty cash book, the extreme left, hand column records receipt of total cash for ealeeene period. There is a column of date and next is the column of respective ee 2 vouchers.The money columns towards the right hand side show total sala age purposes. There are different columns adjacent to total column ees rent Fre of the business. Amount of every expense is written ereafter that amount is written into the column related to tha! d be sufficient so that small payments fora ra fortnight or a month may be easily met upto a specified limit. e consent of the head for reimbursement of small ‘ee a ++ ig sf of specified period, all columns are f x the ot ie equal to the total of Total Column. me as that of a Simple Cash Book, totalled. The total of all the - The method of i . a of balancing the fF ol js the sal Cash Book the main advantages of maintaining Petty cash book: oot oe time of the head cashier. aves hier time in writing up th vit . gave the cas! 8 up the cash book and Posting into the oi rovide control over small payments. voids the unnecessary details as it is convenient to post the total directly into a ede" Cash Book we of petty Cash Book is just like the Cash Book. The amounts received by the petty e im the main cashier are entered on the debit side of the Petty Cash Book and sith ae the credit side of the Petty Cash Book. Every small payment is entered - pen credit side—one in the total payments column and second in one of the wie . amount columns. The periodic total of each column is posted to the expenses wait concerned, while the total of payments column serves to find out the balance of oe ih the petty cashier. Thus, the posting of Petty Cash Book can be summarised as wiet 1, When cash is handed over to the Petty Cashier, Petty Cash Account is debited and Cash or Bank A/c is credited in the ledger. 9, When the petty cash book is closed periodically, each one of the totals of analysis columns is debited to the respective nominal account and credited to the Petty Cash Account in the ledger. 3, The balance of the Petty Cash Account, if any, is carried over to the Balance Sheet. ILLUSTRATION 8 Prepare an analytical petty cash book from the following transactions. 021 2021 duly : July : appa from Cashier = 800 14 Auto charges paid % 40 : i for postage 08 18 Paid for office cleaning & 24 ; nome stationary & 20 22 Bought postal stamps % 30 ie nt telegram & 18 28 Paid for Journal and Magazines 4 ia for Carriage = 24 = 120 aid to Kulkarni & 100 30 Floor cleaning charges = 24 (BBM Bangalore, Dec. 2005 Modified) SOLUTION (Please see next page) ~

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