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This cash book has got three columns of amount i.e., cash, discount and bank. The cash book is prepared in the same way as simple and double column cash books are prepared. Special feature of this book is bank column. The bank column at the debit side records those transactions which increase our bank balance.

 

Bank as an asset increases with deposits and interest allowed on our deposits and thus they are posted at the debit side. In this way, bank column at the debit side of the three column cash book records deposits of cash and cheques into the bank and interest credited by the bank.

 

BANK COLUMN OR THREE COLUMN CASH BOOK

Dr.                                           Receipts                                                Payments                    Cr.

Note. Office column means cash received at the debit side and cash paid at credit side. It is also called ‘Cash’ column.

Bank column at the credit side of the three column cash book records all those transactions which decrease our bank balance. These transactions are interest on overdraft or interest charged by the bank. Bank charges or collection charges and other payments made by the bank on our behalf. The debit side shows the receipts or in other words increase in cash at bank and the credit side records payments i.e., decrease in cash at bank. Specimen format of three column cash books is given below :

SOME IMPORTANT ITEMS

 Contra Entries

 

Three column cash book has three columns for amount. There are certain transactions which concern cash and bank. As the cash book represents cash and bank both so the transactions have to be recorded in both the cash and bank columns of the cash book. Contra transactions increase cash and decrease cash at bank or decrease cash in hand and increase cash at bank. These transactions are recorded on both sides of the cash book but in different columns. These transactions are as under :

 

  1. Opening current account with the bank.
  2. Depositing money into bank.
  3. Depositing a cheque into the bank received previously.
  4. Withdrawing money for office use.

 

The above first three transactions will increase cash at bank, because in all cases the amount is being deposited into bank. These transactions are decreasing cash in hand at the same time because the amount deposited was taken from cash available with the firm. The increase in cash at bank has to be shown at the bank column of the cash book at the debit side. It is shown as ‘To Cash or Office’ and the amount is written in the bank column. As the transaction refers to cash in hand also, so it will be recorded in the cash column also.

 

Cash in hand is decreasing, so it will also be shown at the credit side of cash book as ‘By Bank Account’ and the amount will be written at the cash column. The same transaction is recorded at both the debit and credit side of the cash book, therefore, it is denoted by capital letter ·c· which is short form of contra and means contrary or opposite. In this way, contra entries are those entries which are recorded on both the opposite sides of the cash book.

 

The above fourth transaction i.e., withdrawal of money from bank increases cash in hand, so it will be recorded at the debit side of the cash book as ‘To Bank Account’. As the transaction will reduce cash at bank, so it will also be recorded at the credit side of cash book as ‘By Cash or Office. It will be denoted by ‘C’ on both sides.

Oct. 10. Honouring our own acceptance means making payment of the bills accepted by us in cash. The transaction decreases cash in hand, so posting will be made at the credit side of the cash book as ‘By Bills Payable Account’ and the amount will be written in cash column.

 

Oct. 18. Due to the insolvency of Ramesh only $ 250 i.e., 50% of $ 500 could be realised. It will increase cash in hand with $ 250 only, so it will be recorded at the debit side of the cash book as ‘To Ramesh’ and the amount will be written in the cash column.

 

Oct. 24. Receiving $ 2,000 against bills receivable and depositing the same into bank will increase cash at bank. It will, therefore be posted at the debit side of the cash book as ‘To Bills Receivable’ and the amount will be written in bank column.

 

Oct. 25. Withdrawing from bank for private use will decrease cash at bank, so it will be recorded at the credit side of cash book only. This is not a contra transaction.

 

Oct. 29. Receiving $ 5,000 as payment of loan and depositing $ 3,000 out of that into the bank will increase cash in hand by $ 2,000 (the amount not deposited into the bank) and cash at bank $ 3,000. Both the increases will be posted at the debit side of the cash book as ‘To Loan A/c’ and the amount to the extent of $ 2,000 will be written in the cash column and $ 3,000 in the bank column.

 

Oct. 30. Bank charges as per pass book will reduce our cash at bank, because the bank has charged for certain services. The amount must have been debited by the bank in our account. It will be posted at the credit side of the cash book as ‘By Bank Charges’ and the amount will be written in the bank column.

 

Solution.                                             Bank Column Cash Book

 

Dr.                   Receipts                                               Payments                                             Cr.

ASSIGNMENTS

 

THEORETICAL QUESTIONS

 

A. Objective Type Questions :

 

I. Point out the suitable alternative answers to the following questions:

 

1. Bank reconciliation statement may be prepared with the balance of ….. .

(a) cash book                                       (b) pass book

(c) either cash book or pass book        (d) neither cash book nor pass book.

 

2. The debit balance of pass book is ….. .

(a) plus balance                                   (b) minus balance

(c) either plus or minus                        (d) neither plus nor minus.

 

3. Pass book is ….. .

(a) the copy of banking transactions entered in the cash book

(b) the copy of the customers’ ledger account maintained by the bank

(c) the record of all cash transactions.

(d) the copy of firms receipts and payments.

 

4. If the statement is prepared from the balance of cash book, we shall finally find out the balance of .. … .

(a) cheque book                       (b) pay-in-slip book

(c) cash book                           (d) pass book.

 

5. Cash Book records ….. .

(a) all cash transaction

(b) all credit transaction

(c) all non cash transactions

(d) all transactions.

 

6. . ….. may have con tar entry

(a) simple cash book

(b) cash and discount column cash book

(c) three column cash book

 (d) all cash book.

 

7. Discount column of cash book is

(a) balanced                                        (b) totalled

(c) either balanced or totalled             (d) neither balance nor totalled.

 

Ans. 1. (c) 2. (b) 3. (b) 4. (d) 5. (a) 6. (c) 7. (b).

 

II. State whether the following statements are true or false:

 

1. Cash book records all cash receipts.

2. Discount columns are not balanced in cash book.

3. Only cash receipts and cash payments are recorded in the cash book.

4. Assets and liabilities are the two sides of the Cash Book.

5. Credit transactions are not recorded in the Cash Book.

6. Trade discount is shown in the cash book.

7. The Word (c) against an entry in the cash book signifies that this entry is not to be recorded to the ledger.

 

Ans. 1. True 2. True 3. True 4. False 5. True 6. False 7. True.

 

III. Point out whether the following statements are True or False :

 

1. Bank column of the cash book always shows a debit balance.

2. Pass Book and the statement of account are one and the same thing, because both of them are the copy of customer’s ledger account maintained by bank.

3. The debit balance of the cash book and the credit balance of pass book carry the same meaning.

4. The balance of pass book is always plus.

5. The debit balance of the pass book means minus balance.

6. If deposits exceed the withdrawals from the bank, cash book will show plus balance.

7. Bank reconciliation statement can be prepared with, either the balance of cash book or pass book.

 

Ans. 1. False 2. True 3. True 4. False 5. True 6. True 7. True.

 

IV. While preparing bank reconciliation statement from the balance of cash book indicate whether the following items will be added or deducted :

 

1. Cheques debited in the cash book but not credited in the pass book.

2. Cheques credited in the cash book but not debited in the pass book.

3. Payment by debtors direct into the bank but not debited in the cash book.

4. Payment of firm’s factory rent by the bank has been entered in the pass book bur not in the cash book.

5. Debiting a cheque twice into the bank column of the cash book.

6. Cheque deposited into the bank but not entered in the cash book.

7. Cheques entered in the cash but omitted to be banked.

 

Ans. 1. Deducted 2. Added 3. Added 4. Deducted 5. Deducted 6. Added 7. Deducted.

 

B. Very Short Answer Type Questions :

 

1. What will be the effect of interest charged by the bank, if we have got overdraft balance ?

2. Explain in one sentence the meaning of overdraft.

3. What do you mean by plus balance ?

4. If Bank Reconciliation statement is prepared with the balance of Pass book, which book’s balance we shall get at the end?

5. While preparing Bank Reconciliation statement with the balance of Cash Book, how will you deal with the interest allowed by the bank ?

6. If we deposit cheques worth $ 5,000 into the bank and find that cheques for $ 4,000 seem to have been cleared by the date of preparing statement, what amount you will add or deduct while preparing statement ?

7. Name three columns which are responsible for cash book to be called as three column cash book.

8. Name the column of the cash book which is totalled not balanced.

9. Name the entry which is made at both the debit and credit side of cash book.

10. What is contra? Explain in brief.

 

C. Short Answer Type Questions :

 

1. The following causes are responsible for the difference between the balance of cash book and pass book. You are required to study the items and point out whether the balance of pass book will increase or decrease as compared to the balance of cash book as per the effect of the items. Write ‘increase’ or ‘decrease’ against items.

 

(a) Cheques not presented by customer.

(b) Cheques not debited by the bank.

(c) Collection charges debited by the bank.

(d) Locker’s rent charged by the bank

(e) Dishonoured bills.

(f) Direct collection of dividend by the bank.

(g) Retiring bills payable by the bank under rebate.

 

2. Explain the meaning of the following terms :

 

(a) Pass book and statement of account

(b) Overdraft

(c) Dishonor of cheque

(d) Cheques debited in the cash book

(e) Cheque debited in the pass book

(j) Direct collection of dividend by bank.

 

3. How do you close the discount column of cash book? Explain briefly.

 

4. What do you mean by minus balance? When does it arise?

 

5. What is contra entry? How will you recognize it among other entries in cash book?

 

6. What is bank overdraft?

 

D. Long Answer Type Questions :

1. What do you mean by bank reconciliation statement ? Why is it necessary to prepare this statement by firms ?

 

2. Enumerate ten causes responsible for disagreement of the balance of cash book with the balance of pass book.

Discuss any three of them in detail.

 

3. What do you mean by the plus balance and minus balance? When will you treat the balance of cash book or pass book as plus or minus?

 

4. What is Bank Reconciliation Statement? Give any four reasons for preparing it.

 

5. How is a bank reconciliation statement prepared? Prepare a bank reconciliation statement with imaginary figures.

 

6. What do you mean by cash discount? What is its accounting treatment?

 

7. Explain the meaning of ‘Contra Entry” with three imaginary transactions.

 

PRACTICAL QUESTIONS

 

1. From the following particulars, prepare a bank reconciliation statement as on 31st December, 2004 :

(a) Balance as per cash book $ 1,14,400.

(b) Three cheques for $ 11,250, $ 1,870 and $ 1,350 issued in December were presented for payment in January. 2005.

(c) Two cheques of $ 11,500 and $ 1,850 sent for collection but no collection was made during the year.

(d) The bank charged $ 180 for commission and allowed $ 1, 170 for interest.

 

[Ans. Balance as per pass book = $ 1,16,510]

 

2. On 31 December, 2004 your cash book shows that you have in the bank a sum of $ 18,170.

On checking your cash book, with pass book, you find that cheques drawn by you amounting to $ 2,140 have not been passed through the bank, that cheques for $ 840 has not yet been credited to you, and that the bank has credited your account with interest $ 220 and debited with discount and other charges $ 140.

Prepare a bank reconciliation statement.

 [Ans. Balance as per pass book = $ 19,550]

 

3. Sushil Gupta had his account at the New Bank. According to his cash book, his bank balance as on 31st December, 2004 was $ 1,750, but the pass-book made up to the same date showed that cheques for $ 1,150, $ 180 and $ 135 respectively had not been presented for payment, all cheques to the amount. Of $ 1,220 paid into his account have not been cleared by 31st December, 2004. Prepare a bank reconciliation statement as on 31st December, 2004.

           

[Ans. Balance as per pass book= $ 1,995]

 

4. From the following particulars prepare a bank reconciliation statement showing the balance as per bank pass book as on 31st December, 2003.

$

Balance as per cash book (Dr.) …………………………… ……….. …… ……………. … …….. 1 ,20,000

Cheques issued but not presented for payment………………………. ……………………… …. 15,000

Cheques deposited but not realized…. ……………………………………………………. …………. 22,000

Bank interest not adjusted in the cash-book …………………………………………. …………….. 1,100

Bank charges not adjusted in the cash-book …………………………………………………………….150

 

A cheque for $ 1,000 received from a customer on 28th December was entered in the bank column of the cash book but it was deposited in the bank upto 2nd January, 2004.

 

[Ans. Balance as per pass book = Rs. l, 12,950]

 

5. On 31st December 2004, the pass-book of a merchant shows the credit balance to be $ 33,570.

The cheques and drafts sent to the bank but not collected and credited amounted to $ 1,790 and three cheques drawn for $ 1,300. $ 1150 and $ 1,200 respectively were not presented for payment till 31st January next year.

 

Bank has paid a bills payable amounting to $ 4,000 but it has not been entered in the cash book and a bills receivable of $ 1,500 which was discounted with the bank was dishonored by the drawee on due date.

 

The bank has charged $ 113 as its commission for collecting outstation cheques and has allowed interest $ 110 on the trader’s balance.

 

Prepare a bank reconciliation statement and show the balance as shown by the cash book.

 

[Ans. Balance as per cash book = $ 37,2 13]

 

6. From the following particulars prepare a Bank Reconciliation Statement showing the balance as per cash book on 31st December, 2004. The following cheques were paid into the firm’s current account in December

 

2004 but were credited by the bank in January, 2005.

 

Kumar $ 1,250 Narendra $ 1,300, Brijendra $ 1,120.

 

The following cheques were issued by the firm in December, 2004 and were cashed in January, 2004 :

 

Rajendra $ 1,300, Harish  $ 1,250, Pal Gupta $ 1,250.

 

A cheque of $ 1100 which was received from a-customer was entered in the bank column of the cash book in December, 2004 but the same was paid into bank in January 2005.

 

The pass book shows a credit of $ 1,250 for interest and a debit of $ 150 for bank charges.

 

The balance as per pass book was $ 16,690 on 31st December, 2004.

[Ans. Balance as per cash book = $ 16,560]

 

7. On 31st December 2004, the pass book of a merchant shows the credit balance to be of $ 3,357.

 

The cheques and drafts sent to the bank but not collected and credited amounted to $ 790 and three cheques drawn for $ 300, $150 and $ 200 respectively were not presented for payment till 31st January next year.

 

Bank has paid a bill payable amounting to $ 1,000 but it has not been entered in the cash book and a bill receivable of $ 500 which as discounted with the bank was dishonored by the drawee on due date.

 

The bank has charged $ 13 as its commission for collecting outstation cheques and has allowed interest @10 on the trader’s balance.

 

Prepare a bank reconciliation statement and show the balance as shown by the cash book.

[Ans. Balance as per cash book = $5000]

 

8. From the following particulars, prepare a bank reconciliation statement showing the balance as per cash book on 31st March. 2003.

 

The following cheques were paid into firm’s current account in March, 2003,, but were credited by the bank in April, 2003.

 

‘A’ $ 2,500, ‘B’ $ 3,500 and ‘C’ $ 1,900.

 

The following cheques were issued by the firm in March, 2003 and were cashed in April, 2003 :

 

‘P’ $ 2,500, ‘Q’ $ 4,500 and ‘R’ $ 4,000.

 

A cheque of $ 1,000 which was received from a customer was entered in the bank column of the cash book in March, 2003, but the same was paid into the bank in April, 2003.

 

The pass book shows a credit of $ 2,500 for interest and a debit of $ 1,000 for bank charges. The balance as per cash book was $ 1,80,000 on 31st March, 2003.

[Ans. Balance as per pass book= $ 1,83,600]

 

9. Prepare a bank reconciliation statement from the following particulars:

 

Messers Sunder Lal & Sons find that the bank balance shown by their cash book on 31st December, 2004 is $ 10,500 (credit) but the pass book shows a difference due to the following reasons:

 

(a) Cheque No. 51 for $ 540 favouring A, B and Co. has not )’et been presented.

 

(b) A post-dated cheque for $ 300 has been debited in the bank column of the cash book but could not have been presented in any case.

 

(c) Four cheques totalling $ 1,200 sent to bank have not yet been collected, while a fifth cheque for $ 400 deposited in the account has been dishonoured.

 

(d) Fire insurance premium amounting to $ 50 paid by the bank under a standing order has not been entered in the cash book.

 

(e) A bill for $ 1,000 was retired by the bank under a rebate of $ 15 but the full amount of the bill was credited in the bank column of the cash book.

[Ans. Overdraft as per pass book= $ 11,895]

 

 

10. From the following particulars ascertain the balance that would appear in the bank pass book of Sh. Bhola Nath on 31st December, 2004:

(a) The bank overdraft as per cash book on December 31, 2004 $ 12,680.

(b) Ipterest on overdraft for 6 months ending December 31, 2004, $ 320 is entered into the pass book.

(c) /Bank charges of $ 60 for the above period are debited in the pass book.

(d) Cheques issued but not presented prior to December 2004, amounted to $ 2,336.

(e) Cheques paid into the bank but not cleared before December 31, 2004 were for $ 4,340.

(f) Interest on investments collected by the bank and credited in the pass book, $ 2,400.

[Ans. Overdraft as per pass book= $ 12,664]

 

11. From the following particulars ascertain the bank balance as per pass book of Mrs. Ranga Rao as at 28th February, 2005 :

(a) Credit balance as per cash book on 28th February, 2005 was $ 15,000.

(b) Interest charged by the bank upto 28th February, $ 50 is recorded in the pass book only.

(c) Two cheques of $ 900 and $ 1,500 were issued but out of them one cheque of $ 900 was presented for payment upto 28th February.

(d) Bank charges made by the bank $ 12.50 were recorded in the pass book.

(e) Dividend on shares $ 650 were collected by the bankers directly for which Ranga Rao did not have any information.

(f) Cheques paid into bank of $ 2,500 but cheque of $ l ,900 was cleared and credited by the bankers.

[Ans. Overdraft balance as per pass book= $ 13,512.50]

 

12. Prepare a bank reconciliation statement from the information given below:

(a) Bank overdraft as per cash book on 30th April, 2004, $ 2,000.

(b) Cheques issued but not presented for payment $ 1,250.

(c) $ 25 charged by the bank on account of bank charges not yet entered in the Cash Book.

(d) Interest charged by the bank $ 75 but not entered in the cash book.

(e) Interest on investment collected by the bank and credited in the pass book amounted to  $ 1000.

[Ans. Balance as per pass book = $ 150]

 

13. prepare a bank reconc_iliarion statement from the following particulars :

                                                                                                                                                $

(a) Overdraft as per cash book on 31st Dec. 2004 …………………………………… ………………… 8000

(b) Cheques paid into the bank but not cleared before 31st December, 2004 …………………… 2000

(c) Cheques issued but not cashed by the customer prior to 31st December, 2004 ……………. 1200

(d) Bank charges for the period …………………. …………………. ….. ……………………………………… 100

(e) Interest on overdraft charged by the bank……………………………………………… ……………….. 200

(j) Interest on debentures collected by the bank not shown in the cash book……………………. 500

[Ans. Overdraft balance as per pass book= $ 8600]

 

14. On 31st December, 2003 the bank pass book of Naresh & Co. showed an overdraft of $ 10,700. From the following particulars. prepare a bank reconciliation statement :

 

(a) Cheques issued before 31-12-2003 but presented for payment after that date amounted to $ 900.

 

(b) Cheques paid into the bank but not .collected and credited until 31-12-2003 amounted to $ 2,200.

 

(c) Interest on overdraft amounting to $ 1,200 did not appear in the cash book.

 

(d) $ 5000 being interest on investment collected by the bank and credited in the pass book were not shown in the cash book.

 

(e) Bank charges of  $ 50 were not entered in the cash book.

 

(j) $ 800 in respect of a dishonoured cheque were entered in the pass book but not in the cash book.

 

[Ans. Overdraft balance as per cash book  =  $ 12,350]

 

15. On 31st Dec. 2004, my Pass Book No. I showed an overdraft of $9500. Out of cheques of $ 4500 paid on 28th Dec. $ 2000 appear to have been credited on 3rd January, 2005.

 

Out of cheques accounting to $ 8,000 issued during the month of Dec., cheques worth $ 4,500 appear to have been presented before 31st Dec., 2004. Inadvertently, the bank has credited a sum of $ 1,000 to account which belonged to some other account. Interest on overdraft from bank was $ 500. This was subsequently entered by me in the book. My bank account showed a credit of $ 600 for interest on securities collected by it.

 

Prepare a bank reconciliation statement as on 31st Dec., 2004.

[Ans. Overdraft as per cash book = $12100]

 

16. Prepare a Bank Reconciliation statement from the following parriculars :

$

Bank overdraft as per cash book ….. …… …. .. …. ……… ……… …….. …… …. …… ….. …… …8,000

Cheques deposited in bank but no entry was passed in the cash book ……. ……. .. … . …… .. 300

Cheque received but not sent to bank………………………………………………………………………. 1 ,000

Credit side of bank column cash short…………………………………………………………………………. 100

Insurance premium paid directly by bank as per standing advice ……………………………………. 500

Bank charges entered in cash book twice…….. ……………………………………………………………….. 10

Cheques returned back but no entry passed ………………… ,………………………………………….. … 400

Cheques ‘issued’ rerumed back on account of technical grounds………………………………………. 300

Bills directly collected by bank ………………………….. ….. ……………………………. ……… ………. 2,000

Bank charges debited by bank …. .. …. ….. …. .. ….. .. .. . …… …. .. …. …. .. .. .. … …. . …. . …. .. 12

Cheques received entered twice . . … . .. . .. .. .. . .. .. . … .. . … … .. .. . .. …. . . .. … . . . .. . . . . . 500

Bills discounted dishonoured ………………………….. ………… …………………………………………… 4,000

State which items will require adjustment in the books of accounts.

[Ans. Overdraft as per pass book =$ 11,902]

 

17. Enter the following transactions in a Three Column Cash Book:

2001                                                                                                                            $

Jan. 1

Jan. 3

Jan. 6

Jan. 8

 

an. 12

Jan. 17

Started business with cash ………….. …. …… . .. …. . .. .. …. .. …… .. .. 20,000

Opened current account with the Punjab National Bank ……………….. 8,000

Bought goods by cheque .. .. …… .. .. …. .. .. …. .. …….. ………….. .. …. .. 150

Received cheque from Ram a .. .. …. .. …. …. .. .. .. … .. … ..  …… …… 200

Allowed him discount … . . …… . .. . .. .. . ….. . …. . . …. . … .. .. . . . . . . 10

Sold goods for cash…………………….. …. …… ………………………………….. 40

Paid into Bank

Cash                $ 30

Cheque            $ 200 …………………………………………………..230

           

Jan. 21             Paid Sham by cheque………………….. ……………………………………………. 345

Discount received…………………………………………………………….. ……… 15

 

Jan. 24             Paid carriage by cheque …. …. …….. .. .. .. . .. .. ….. ….. …. .. …. .. .. … 180

 

Jan. 28             Drew from Bank cash for office………………………….. …. … .. .. … 200

 

Jan. 30             Paid wages by cheque .. .. .. .. .. .. .. ..  .. .. … .. .. .. .. .. .. .. .. .. .. .. .. .. .. 60

 

[Ans. Cash in hand $ 12,210 ; Cash at Bank $ 7,295]

 

18. Compile a Three Column Cash Bookfrom the following transactions :

Rs. Rs.

2002

Jan. 1   Cash in hand                          1,967               Jan. 17 Purchased a motor car and

Jan. 1   Cash at Bank                          12,675                         paid by cheque                        6,140

Jan. 2   Deposited into Bank               500                  Jan. 17 Paid by cheque to D and        367

Jan. 5   Received from A and                         790                              received discount                   3

allowed discount                     10                    Jan. 10 Withdrew from Bank

for office use                           50

Jan. 7   Purchased Furniture

for cash                                   750                  Jan. 22 Purchased goods for cash       350

Jan. 8   Paid to B by cheque and         745                  Jan. 25 Paid Establishment expenses

Received discount 5

through Bank                          450

Jan. 13 Received from C by                                       Jan. 31 Paid rent in cash                    50

cheque and deposited

into bank                     500

Jan. 15 Cash sales                               785

Deposited into Bank               1,900

[Ans. Cash in hand $ 242; Cash at bank $ 7,623]

19. Enter into Naresh’s Cash Book the following transactions, which took place on February 28, 1999, and balance the Cash Book :

 

(i) Balance brought forward from the previous day : Cash in hand $ 100 and at Bank $ 8,000.

 

(ii) Instructed the Bank to issue a Bank Draft for $ 5,000 in favour of Suresh. The Bank charged $ 10 for issuing the draft.

 

(iii) Received a Bank Draft for $ 5,760 from Mukesh in full settlement of $ 6,000 due from him. Sent the Draft to the Bank.

 

(iv) Received a cheque from Rakesh for $ 2000. Allowed him discount $ 120.

 

(v) Endorsed Rakesh’s cheque in favour of Harish.

 

(vi) Sent a cheque for $ 50 in payment of the fees of Naresh’s son.

 

(vii) Withdrew $ 500 from the Bank.

 

(viii) Placed an order with Vikas for goods of the value of $ 1.000 and sent a cheque for $ 1,000 with the order.

 

[Ans. Cash in hand $ 600 ; Cash at Bank $ 7,200]

 

20. Prepare Bank Column Cash Book from the following transactions:

2002

Oct. 1

 

Oct. 5

Oct. 7

Oct. 8

Oct. 10

Oct. 14

Oct. 16

 

Cash in hand ………………………………….. ………….. …. ….. ………. .

Cash at Bank………………………………………………………………………….. .

“Discounted a BIE at 1% through bank ………………………………. …… ..

Bought goods by cheque …………………… .. …. ….. ….. ………………. .

Bought goods for Cash ……………………………… …………. …. ………. …. .

Honoured our own acceptance by cheque ………………….. .. …. …… ..

Paid trade expenses …………………………………………………………… ….. .

Paid into Bank ………………………………………………………………….. ..

$

11 .800

11,000

4,000

7,000

1,500

5,000

105

1,000

Oct. 18    Ramesh who owed us $ 500 became bankrupt and paid

@ 50 P. in the rupee

Oct. 20      Received cash from Manisha …. ……….. …… …. …. …. ………….. …….. 400

Allowed discount ……………………….. ……………………………………… 10

Oct. 23 Withdrew from bank … ………………… …. ………….. …… … …… .. .. ……… 400

Oct. 23 Paid to Ahmed & Co. …. .. ………. ……. …. ……………….. ….. ……………. ….. 300

Allowed discount. ………………………………………………………………….. 10

Oct. 24 Received $ 2000 for a BIE from Hari Ram and

deposited the same into bank

Oct. 25

Oct. 27

Oct. 28

Withdrew from bank for private expenses ………………… ……….. .

Sold goods for Cash …………………. ………………. …… ……………… …. .

Received cheque for goods sold ……………….. …. …………………………. .

2,300

200

9.000

Oct. 29 Received repayment of a loan of $ 5,000 and

deposited $ 3.000 out of it into Bank

Oct. 30 Bank charges as per Pass Book ………… ……….. ………. .. ……. ………………………….. 5

 

[Ans. Cash in hand $ 21,145; Cash at Bank $ 6,255]

21. Enter the following transactions in a Three Column Cash Book :

 

2006                                                                                                                                           $

Jan.1  Commenced business with cash ………………………… …… ….. …… ……………. ….. ….. 20,000

Jan. 2 Deposited into Bank …………….. ……………… ……. ….. …………. ……….. ………………. 40.000

Jan. 3 Received cash from Mohan $ 950 in full settlement of a

debt of $ 1,000

Jan. 4 Bought goods for cash …………. ……………………… ……………………………………….. 10,000

Jan. 4 Bought goods by cheque ……………………………………………………………………….. 15,000

Jan. 5 Sold goods for cheque $ 20.000 and deposited into bank the same day

Jan. 5 Paid to A run by cheque $ 1,900 in full settlement of his

account of $ 2,000

Jan. 6 Drew from bank for office use…………………………………………………….. .. ……….. 1,000

 

[Ans. Cash in hand $ 1,950; Cash at Bank $42,100]