Business organizations use various type of cash books, including.
1. The single column cashbook
2. The two column cashbook
3. The three column cashbook
4. The petty cash book (or multi-columnar ) cash book
SINGLE
COLUMN CASH BOOK
The single
column cash book is maintained in form of cash account continuing only
one column on each side for cash transactions. Its profoma is as follows:
Cashbook
DR
|
CR
|
||||||
Date
|
Particulars
|
Folio
|
Amount
|
Date
|
Particulars
|
Folio
|
Amount
|
NOTES:
1. The
cash book is ruled in the form of an account contains two sides. The debit (Dr) sides for recording
cash receipts and the credit (Cr)
side for recording ash payments.
2. the date column records the date the transaction took
place
3. the particulars column on each side
records the event that resulted in the
receipt or payment of cash, (eg sales gave rise
to receipt of cash. while purchases
gave rise to payment of cash)
4. the folio column is dictate the
page of the ledger in which the corresponding entry of the particular transaction could be traced.
5. the
amount column is for recording the monetary value of the transaction.
6. The term “purchases “ found in the
particulars column of the cash book used
to differentiate goods bought for resle
from items which are not intended for
resale such motor velicly, funitures and fitting , law
and buildings
7. Balance b/d stands for balance brought down, while balance c/d
stands for balance carried down. Balance
b/d indicates the amount brought
forward from a previous accounting period being the excess of the diet or
credit side over the other. Balance
c/d on the other land, is used to indicate the amount transferred from one side of the account (or cashbook) to the other side so as to effect a balance (ie bring about
equality) in the two sides of the accounts.
8. to debit an account is to write at
the left handed side of the book and to
credit an account is to write at the right
land side of the book
illustration:
record the following transaction in the cash book of C.Eze
a sole trader, for the month of October
2003
October
1 opening cash balance
|
N10,000
|
October
4 rent paid
|
4000
|
October 6
interest received
|
6000
|
October 15 cash purchases
|
8000
|
October 25
cash sales
|
16000
|
October 31 paid salary to sales boy
|
4000
|
Dr
cashbook of C. Eze as at 31st Oct,
2003 CR
Date
|
Particular
|
Folio
|
Amount
|
Date
|
Particulars
|
Foilo
|
Amount
|
Oct 1
Oct 6
Oct 25
|
Balance b/d
Interest received
Sales
Balance b/d
|
10,000
6000
16000
32,000
16,000
|
Oct 4
Oct 6
Oct 31
|
Rent
Purchases
Salary
Balance c/d
|
4,000
8,000
4,000
16,000
32,000
|
Assignment 2
Record the
following transactions in the cash
book of Okenwa, a sole trader
for the month of June 2009
who stated business with N100,000 only
N
June 1
|
Sold goods for cash
|
20,000
|
June 6
|
Bought goods for cash
|
12,000
|
June 9
|
Paid cash
for rapping piper
|
300
|
June 14
|
Cash sales
to date
|
23,500
|
June 19
|
Received cash from T. Molokwi
|
16,000
|
June 25
|
Paid electric light
|
600
|
June 27
|
Cash sales
|
19560
|
June 30
|
Paid one month rent
|
12000
|
CONTRA
ENTRY
The world “CONTRA’ is
a Latin word for “against” or
“set off” and it represent an entry in the cash book showing the
reversal or cancellation of an entry on the other side of the same account
Double column cashbook
The two column cash book is so called b/c for both debit
and credit entries, it has two columns, one
for recording cash transactions
and the other for bank transactions. It is therefore, used for
recording mixed cash, and bank transactions. When any money is received. Whether by
cheques or in cash, the cash column which receives values is
debited. When money is paid into
the bank, the banks column which
receives the value is debited and
cash column which gives the value is credited.
The entry involving
the payment of cash into blame
is called a contra entry and is donated by ‘c” in the folio column .
a contra is a Latin worlds meaning against or
set off. It is defined as the
transfer of an item from one side of one
account to the identical side of another account.
All payment in cash are recorded by crediting the cash
column of the cash book. If the payment is by cheque, the bank column
is credited . when cash is withdrawn
from the bank for office use, the cash column is debiting, and the bank column is credited
with the amount involved. This is
another contra entry.
Illustrations
Record the following transactions in a double column cash book of Ezenwa and Bros. Balance
the cash book and bring down the balances of cash in hand and at bank
at the end of the period 2011.
April 2 introduce N3,900 into the business as capital
April 4 paid
N1800 of the capital into bank
April 10 cash
purchases N 300
April 15 purchases
by cheque 700
April 25 cash sales
650
April 26
withdrew cash from bank for
office use 120
April 28 office
expenses paid for in cash 30
April 29 cash paid into bank 1000
April 30 wages paid
by cheque 75
Ezenwa and bros
Double column cash book as at 30th April 2003 cr
Date
|
Particular
|
Folio
|
Cash N
|
Bank
N
|
Date
|
Particulars
|
Folio
|
Cash
|
Bank
|
April 2
April 4
April 15
April 25
April 26
April
29
April 31
|
Capital
Cash
Sales
Sales
Bank
Cash
Balances B/d
|
C
C
C
|
2,900
450
650
120
4120
940
|
1,800
1000
2850
1955
|
April 4
April 10
April 20
April 26
April28
April 29
April 30
|
Bank
Purchases
Purchases
Cash
Office expenses
Bank
Wages
Balance c/d
|
C
C
C
|
1850
300
30
1000
940
4120
|
700
120
75
1955
2850
|