Page 49 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes

Notes

1. C/d stands for Carried Down whereas b/d stands for Brought Down.
2. One thing which is very important to remember while recording a transaction in
the Cash Book is that no distinction is adopted about capital or revenue nature of
transactions i.e., all the transactions are recorded in the Cash Book.

Example: Prepare a cash book from the following:
2010
June 1 Cash in hand 7,850
June 2 Cash Purchases 2300
June 3 Cash Sales 6,250
June 4 Wages paid in cash 25
June 6 Cash paid to Ram 1,220
June 7 Cash Received from Mohan 2260
June 8 Paid to a creditor in full Settlement of his account Amounting to Rs. 4500 4,410
June 9 Paid cartage 15
June 10 Issued a cheque to a creditor 11,500
June 11 Goods purchased from Arun on credit 2,750
June 14 Cash Sales 2,670
June 15 Goods sold to Amit on credit 6,500
June 17 Cash Sales of Rs. 7500 of which Rs 5700 were deposited In bank
June 18 Received a cheque from Amit and deposited in a bank 2,500
June 24 Rent paid 500
June 29 Electricity paid 1,210
June 30 Cash purchases 2,450

Solution:
Cash Book

Dr. Cr.
Date Particulars L.F. Date Particulars L.F.
2010 2010
June 1 To Balance b/d 7,850 June 2 By Purchases a/c 2,300
June 3 To Sales a/c 6,250 June 4 By Wages a/c 25
June 7 To Mohan’s a/c 2,260 June 6 By Ram’s a/c 1,220
June 14 To Sales a/c 2,670 June 8 By Creditor’s a/c 4,410
June 17 To Sales a/c 7,500 June 9 By Cartage 15
June 18 To Amit a/c 2,500 June 17 By Bank a/c 5,700
June 18 By Bank a/c 2,500
June 24 By Rent a/c 500
June 29 By Electricity a/c 1,210
June 30 By Purchases a/c 2,450
June 30 By Balance a/c 8,700
July 1 To Balance b/d 29,030 29,030

44 LOVELY PROFESSIONAL UNIVERSITY