Page 102 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes Balancing the two Column Cash Book

In case of Two Column Cash Book, only the cash columns are balanced. Procedure is similar to
Single Column Cash Book. The discount columns are not balanced, they are simply totalled.
This is because the two discount columns relate to two separate accounts-the Discount Allowed
Account and the Discount Received Account.

Example: From the following transactions write up a two column cash book and post
into ledger:

1991
Jan. 1 Cash in hand 2,000
Jan. 7 Received from Riaz & Co. 200; discount allowed 10
Jan. 12 Cash sales 1,000

Jan. 15 Paid Zahoor Sons 500; discount received 15
Jan. 20 Purchased goods for cash 300
Jan. 25 Received from Salman 500; discount allowed 15
Jan. 27 Paid Hussain & Sons 300

Jan. 28 Bought furniture for cash 100
Jan. 31 Paid rent 100
Solution:
Cash Book
Dr. Cr.
Date Particulars V.N. L.F. Discount Cash Date Particulars V.N. L.F. Discount Cash
1991 1991
Jan.1 To Balance Jan.5 By Zahoor & Sons 15 500
Jan.7 b/d 10 2,000 Jan.20 By purchase A/c 300
Jan.12 To Riaz & Co. 15 200 Jan.27 By Hussan & Sons 300
Jan.25 To Sales A/c 1,000 Jan.28 By Furniture A/c 100
To Salman 500 Jan.31 By Rent A/c 100
By Balance c/d 2,400

25 3,700 15 3,700
1991

Feb.1 To Balance
b/d 2,400

Riaz & Co.
1991 ( )
Jan. 7 By Cash 200
By Discount 10

Sales Account

1991 ( )
Jan. 12 By Cash 1,000

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