CASH AND BANKING TRANSACTIONS: Class 11 Account Note
CASH AND BANKING TRANSACTIONS:
- CASH BANK: cash traction refers to cash receipt and cash payment cash receipt from various sources and payments made on various heads are routine transactions of a business cash book is a subsidiary book in which cash receipt and cash payments are recorded.
Types of cash book
- Single column cash book
- Simple cash book
- Simple bank book
- Double column cash book
- Cash book with cash and discount column
- Cash book with bank and discount column
- Cash book with cash and bank column
- Triple column cash book
- Petty cash book
- simple cash book:
Simple cash book involves only cash column where cash receipt and payment are recorded. Cash received recorded in debit side while cash payments are recorded in credit side.
Question no. 1. Following transaction are given:
Jan. 3 started a business with cash Rs. 50,000.
Jan. 5 good sold for Rs. 10,000
Jan. 9 cash purchase made for 6,000
Jan. 13 salary paid for Rs. 4,000
Jan. 15 wages paid by cheque Rs. 5,000
Jan. 17 goods sold to ram for Rs. 31,000
Jan. 21 machinery sold for Rs. 10,000 less 5% discount
Jan. 23 cash deposited into bank Rs. 10,000
Jan. 29 cash Rs. 5,000 received from gopal for full settled Rs. 5,500
჻required simple cash book
- Single column cash book
Simple cash book.
|Date||Particulars||If||Cash Amount||Date||Particulars||If||Cash Amount|
|Jan. 3||To, capital A/c||50,000||Jan. 9||By purchase A/c||6000|
|Jan. 5||To, sales A/c||10,000||Jan. 13||By, salary A/c||4000|
|Jan. 21||To, machinery A/c||9500||Jan. 23||By, bank A/c||10,000|
|Jan. 29||To, gopal A/c||5,000||Jan. 31||By, balance b/d||54,500|
|Feb. 1||To balance b/d||54,500|
- simple bank book
Simple bank book involved only bank column where cheque received and cheque issued transactions are recorded. Cheque received are recorded on debit side and payment made by cheque are recorded on credit side.
Question no. 2.
Sep. 1 opening bank balance Rs. 60,000
Sep. 3 goods sold for Rs. 10,000 and amount received by cheque.
Sep. 7 furniture purchase for Rs. 5000 and amount paid by cheque.
Sep. 11 goods purchased for Rs. 15,000 and cheque issued after deducting 20% discount.
Sep. 17 goods sold to muna for Rs. 10,000.
Sep. 21 salary Rs. 5000 and wages Rs. 3,000 paid by cheque.
Sep. 29 rent paid by cash Rs. 25000
Simple bank book
|Date||Particulars||Lf||Bank account||Date||Particulars||Lf||Bank account|
|9-1||To, balance b/d||60,000||9-7||By, furniture A/c||5000|
|9-3||To, sales a/c||10,000||9-11||By, purchase A/c||12,000|
|9-25||To, cash A/c||20,000||9-21||By, purchase A/c||5,000|
|9-21||By, wages A/c||3,000|
|9-30||By, balance c/d||65,000|
|10-1||To balance b/d||65,000|
- Double column cash book
- Cash book with cash and discount column.
Ans. The cash book which has double column of amount is known as double column cask book. The cash book which has two column one for cash and discount column. In this cash book the debit side of cash payment. Discount column of debit side is used for discount allowed and credit side for discount received.
Question no. 3. From th following transactions prepare cash book with cash and discount column.
Oct. 1 cash in hand Rs. 1,50,000
Oct. 3 cash purchase made for Rs. 10,000 less 5% discount.
Oct. 7 machinery sold for Rs. 30,000.
Oct. 9 good sold for cash for Rs. 20,000 less 5% discount.
Oct. 13 salary Rs. 9000 and commission Rs. 7,000 paid by cash.
Oct. 17 wages Rs. 15000 paid by cheque.
Oct. 21 good sold to muna for Rs. 20,000
Oct. 25. Cash drawn from bank for office use Rs. 5000.
Oct. 26 bicycle purchase for personal use Rs. 5,000.
Oct. 30 loan received from gopal Rs. 25,000.
Cash book with cash and discount column.
|10-1||To, balance b/d||1,50,000||10-3||By, purchase A/c||85000||1500|
|10-7||To, machinery A/c||30,000||10-13||By, salary A/c||9000|
|10-25||To, sales A/c||19000||1000||10-26||By, commission A/c||5000|
|10-30||To, gopal’s A/c||25000||10-31||By, balance c/d||199500|
|11-1||To, balance b/d||199500|
- cash book with and discount column.
Ans. The cash book which has two columns of amounts one is used for bank and other for discount is known as cash book with bank and discount column.
In his cash book and on debit side of bank column cheque received and on discount column discount allowed are recorded. Similarly on credit side payment made by cheque are recorded on bank column, discount received recorded as discount column.
Questions no. 3. Following truncation are given.
Dec. 1 started a business with bank balance Rs. 65,000.
Dec. 3 good purchased and payment made by cheqe Rs. 10,000 less 5% discount.
Dec. 7 furniture sold for Rs. 20,000 and cheque received after deducting 3% discount.
Dec. 10 salary paid by cash Rs. 5000.
Dec. 13 wages paid by cheque Rs. 10,000.
Dec. 15 commission paid Rs. 6000.
Dec. 21 machinery sold to muna for Rs. 3000.
Dec. 25 a cheque of Rs. 35000 received from ram and discount allowed Rs. 500.
Dec. 29 a cheque of Rs. 2,900 received from muna for settled.
Dec. cash deposited into bank Rs. 9000.
Required: cash book with bank and discount column.
Cash book with bank and discount column.
|12-1||To, capital A/c||6500||12-3||By, purchase A/c||9500||500|
|12-7||To, furniture A/c||19400||600||12-13||By, wages A/c||10000|
|12-25||To, ram’s A/c||2900||100||12-31||By, balance c/d||74300|
|12-30||To, cash A/c||900|
|1-1||To, balance b/d||74300|
- cash book with cash bank column.
Ans. The double column cash book in which cash and bank columns are involved is known as cash book with cash and bank column. Cash received are recorded on debit side cash column and cheque received are recorded on debit side bank column. Cash payments and cheque payments are recorded on credit side of cash column and bank column respectively.
If the same transaction recorded on debit and credit both side is known as contra entry. The following two transactions are effected on both sides.
- Eash deposited into bank.
- Cash drawn from bank for office use.
Questions no. 4. Following transactions are given.
Oct. 1 opening balance cash Rs. 65000 and bank Rs. 1,50000
Oct. 5 cash purchase made for Rs. 10,000 less 4% discount.
Oct. 9 furniture sold for Rs.20,000 and a cheque received after deducting 5% discount.
Oct. 13 salary paid by cheque Rs. 7,000.
Oct. 14 wages paid in cash Rs. 8,000.
Oct. 16 commission paid Rs. 3,000.
Oct. 19 cash deposited into bank Rs. 10,000.
Oct. 21 goods sold to muna for Rs. 30,000.
Oct. 23 cash drawn from bank Rs. 5000.
Oct. 22 cash drawn for personal use Rs. 6,000.
Required: cash book with cash bank column.
Note: bank balance means debit balance of bank A/c bank overdraft or bank loan means credit balance of bank A/c.
|10-1||To, balance b/d||65000||150000||10-5||By, purchase A/c||9600|
|10-9||To, furniture A/c||19000||10-13||By, salary A/c||7000|
|10-14||By, wages A/c||8000|
|10-27||By, comm. A/c||3000|
|10-19||To, cash A/c||‘c’||10,000||10-19||By, bank A/c||‘c’||10000|
|10-23||to, bank A/c||‘c’||5000||10-23||By, bank A/c||‘c’||5000|
|10-27||By, drawing A/c||6000|
|10-31||By, balance c/d||33400||167000|
|11-1||To, balance b/d||33400||167000|
Triple column cash book.
The cash book which has three column of amount is known as triple column cash book. It is also known as cash book with cash, bank and discount column.
Questions no. 5. Following transaction are given .
Jan. 1. Opening balance cash 45000 and bank overdraft Rs. 60,000.
Jan. 3 cash purchase made for Rs. 3000 less 5% discount.
Jan. 5 cash deposited into bank Rs. 6000.
Jan. 9 a cheque of Rs. 4,5000 net amount received from ram after deducting 10% discount .
Jan. 13 cash drawn from bank Rs. 6000.
Jan. 17 goods purchased from gita for Rs. 10,000.
Jan. 19 a cheque of Rs. 9500 issued to gita for full sellted .
Jan. 28 salary wages paid Rs. 2,500.
Required: triple column cash book.
Discount= net amt x %
100 – %
|1-1||To, balance b/d||45,000||1-1||By, balance b/d||60,000|
|1-5||To, cash A/c||‘c’||6,000||1-3||By, purchase A/c||2,850||150|
|1-9||To, Ram’s A/c||45,000||500||1-5||By, bank A/c||‘c’||6,000|
|1-13||To, bank A/c||‘c’||6000||1-13||By, cash A/c||6,000|
|1-31||To, balance A/d||65,000||1-19||By, gita’s A/c||9,500||500|
|1-28||By, salary and wages A/c||25,000|
|1-31||By, balance c/d||39,650|
|2-1||To, balance b/d||39500||2-1||By, balance b/d||65000|
Bank reconciliation statement.
Bank reconciliation statement is prepared for matching the balance shown by bank column of cash book with the corresponding information of pass book or bank statement.
Reasons for not agreement the balance between cash book and pass book.
- Cheque issued but not presented for payment.
- Cheque deposited but not credited in cash book.
- Interest allowed by bank but not recorded in cash book.
- Bank charge charged by bank but not recorded in cash book.
- Periodic instructions given to bank for various payments.
- Amount directly to deposited by a customer into bank.
- Cheque deposited bills discount but discounted but dishonored.
- Errors and omissions.