Page 103 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 9: Cash Book

Dr Pro forma of the Single Columnar Cash Book Cr Notes

Date Receipts L.F. Amount Date Payments L.F. Amount
` `
To Opening Balance B/d By Closing Balance B/d

9.2 Double Column Cash Book

It is another kind of cash book which is nothing but an extension of the single columnar cash
book. The double columnar cash book includes the operations of the enterprise into two different
categories viz transactions through Cash and Bank. It means that the entire receipts and payments
of the business routed through cash and bank. The transaction of the business with the bank
either at the moment of cash withdrawal or cash deposit leads to registering the movement of
cash from one entity to another through the contra entries©.
The contra entries are posted in two different occasions viz cash withdrawal and cash deposit.

During the cash withdrawal, the movement of cash is depicted below for easier understanding,
which is nothing but the movement of the asset from bank to fi rm.

Cash Withdrawal
Bank Firm
Savings Bank A/c Operations

Transaction No 1: Jan 5,2006, Cash withdrawal `10,000 from the bank is having the following
journal entry:
Cash A/c Dr `10,000

To Bank A/c `10,000
(Being cash withdrawn from the bank A/c)
From the above entry, it is obviously understood that the bank is the giver of the cash resources
from the savings bank a/c and cash receipts are made only due to withdrawal of cash from the
bank.

There are two different angles of cash withdrawal; one is in the dimension of firm and another
is bank.
Firm Bank
Cash receipts Cash Payments

Transaction No 2: Jan 20, 2006: Cash deposit has a similar kind of process to post a contra entry,
just opposite to the entry of cash withdrawal. Cash deposit of ` 5,000. in the bank account. The
following is the journal entry for the cash deposit:
Bank A/c Dr `5,000
To Cash A/c `5,000
(Being cash deposited into the bank account)

Firm Bank
Cash Payments Cash Receipts

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