FINANCIAL ACCOUNTING

MODULE-3

Cash and Bank Book

Learning objectives:

• To ensure the student understands the importance of managing cash and

bank
• To familiarize the student regarding reconciling the difference between
bank balance as per trader and as per banker

Learning outcomes:

• A student should be able to understand the cash management situations

like heavy cash management, petty cash management and so on
• A student will know how to manage and adjust the differences between
the bank balances as per the trader and banker

CASH BOOK

The cash book is a book of original entry or prime entry since the transactions are
recorded for the first time in it from the source documents. All cash receipts and
cash payments are recorded in Cash Book. The cash book is a ledger in the sense
that it is designed in the form of a cash account and records cash receipts on the
debit side and cash payments on the credit side. Thus, the cash book is both a
journal and a ledger. Cash book will always show a debit balance as cash
payments can never exceed the cash available.

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FEATURES:

A Cash Book has the following features:

1. It plays a dual role. It is both a book of original entry as well as a book of

final entry. All cash transactions are primarily recorded in it as soon as they
take place; so, it is a journal (a book of original entry). On the other hand, the
cash aspect of all cash transactions is finally recorded in the Cash Book (no
posting in Ledger); so, a Cash Book is also a Ledger (a book of final entry).
2. Only one aspect of cash transaction is posted to the ledger account. The other
aspect (i.e. cash aspect) needs no posting in Cash A/c. Since the Cash Book is
the substitute for Cash A/c, no Cash A/c is opened in the ledger.
3. It has two identical sides-left hand side, the debit side and right-hand side, the
credit side.
4. All the items of cash receipts are recorded on the left-hand side and all items
of cash payments on the right-hand side in order of date.
5. The difference between the total of two sides shows cash in hand.
6. Its balance is verified by counting actual cash in the cash box.
7. It always shows debit balance. It can never show credit balance.

ADVANTAGES:

Generally, cash transactions are numerous. What is credit transaction today will
be cash transactions tomorrow? In other words, all credit transactions are finally
settled by cash. If like all other transactions cash transactions are also recorded
primarily in Journal, the cash aspect of the transactions will be required to be
posted to Cash A/C, in the Ledger separately. This involves much time and
labour. This is why, cash transactions are recorded in a separate book named Cash
Book. It saves much time and labour. Besides this the Cash Book renders the
following benefits:

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 1. Daily cash receipts and cash payments are easily ascertained.
2. Cash in hand at any time can easily be ascertained through Cash Book
balance.
3. Any mistake in the book can be easily detected at the time of verification
of cash.
4. Any defalcation of money can be detected while verifying cash.
5. Since cash is verified daily, Cash Book is always kept up-to-date.

Distinction between a Cash Book and a Cash Account:

In fact, Cash Book is a substitute for a Cash Account. Yet there are some
differences between the two, which are given below:

Cash Book Cash Account

1. It is a separate book in which cash 1. It is an account in a Ledger in

transactions are directly recorded. which posting is made from
journal.

2. It serves the purpose of both journal 2. It serves the purpose of a Ledger

and ledger and hence cash only. If Cash A/C is opened in the
transactions need not be primarily Ledger, all cash transactions are
recorded in Journal. first recorded in journal.

3. Narration is required. 3. Narration is not required.

4. A column for Ledger Folio is 4. A column for Journal Folio is

provided. provided.

KINDS OF CASH BOOK:

1. Single Column Cash Book / Simple Cash Book

2. Double Column Cash Book
3. Three Column Cash Book
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 4. Petty Cash Book
a. Simple Petty Cash Book
b. Analytical Petty Cash Book

SINGLE COLUMN CASH BOOK:

It is a cash book in which only and only cash transactions are recorded. By single
column we mean "one amount column" on each side of the Cash Book. One
amount column on the debit side in which inflow of cash (cash received) is
recorded and one amount column on the credit side in which outflow of cash (cash
paid) is recorded. It is generally maintained by such business concerns which do
not have bank accounts. (small business concerns).

BALANCING THE CASH BOOK:

The Cash Book is balanced in the same way as a ledger account. A Single
Column Cash Book always shows debit balance (Debit side exceeding credit
side) because more cash cannot be paid than what we have. To verify the accuracy
of the Cash Book, it should be balanced daily (which may be shown in the Cash
Book with red pencil). The balance as per the Cash Book must tally with the
actual cash in the cash box. At the end of the period the Cash Book is finally
balanced (showing debit balance) and the balance is put on the credit side for the
purpose of closing the cash book. This balance will be transferred on the debit
side of the Cash Book as opening balance of the next period.

Ruling of Single Column Cash Book

Dr. Cr.
Dat Particula R. L. Amoun Dat Particula V. L. Amoun
e rs N F t (Rs.) e rs N F t (Rs.)

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DOUBLE COLUMN CASH BOOK

When discount is allowed on the receipt of cash and discount is received when
payment is made to the suppliers, it becomes desirable to add discount column
along with cash on both side of the cash book. There will be two columns for
discount and cash on each side of the cash book and that is why it is known as
Double or Two Column Cash Book. Discount column is only memorandum
column and not based on the double entry system. Cash discount is allowed by a
creditor to a debtor when the latter pays the amount of goods purchased by him
either immediately or within a specified period. It is an incentive given to a debtor
for making early payment. The ruling of a double column cash book is as follows:

Dr. Cr.
Dat Particula R L Dis Amoun Dat Particula V L Dis Amoun
e rs N F (Rs.) t (Rs.) e rs N F (Rs.) t (Rs.)

NOTE:

• The discount columns in the cash book are not accounts. It is a memoranda
column meant to provide information about the total discount allowed
(debit side) and discount received (credit side)
• The discount columns are not balanced
• Their totals are entered in the discount account in the ledger

THREE COLUMN CASH BOOK

It is the most comprehensive cash book with cash, bank and discount columns on
both the sides. All cash receipts, bank receipts and discount allowed are recorded
on the debit side of the cash book. All cash payments, bank payments and
discount received are recorded on the credit side. It serves the purpose of both
cash and bank accounts. Hence, it is also known as bank column cash book.

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NOTE: When a cheque received from a customer is given to any other party, it
is called endorsement. On endorsement of a cheque, the amount is recorded on
the credit side of the cash column of the cash book as there is payment.

CONTRA ENTRIES:

Transactions recorded in the Three Column Cash Book which relates to both cash
and bank account (i.e., balance of one will decrease and other will increase), such
transactions are entered on both sides of the cash book and are known as Contra
Entry. These types of entries require no further posting in any other account. Such
entries are marked in the cash book with the letter ‘C’ in the folio column to
indicate that these are contra transactions and no further posting is required for
them.

Transactions to be noted for special attention:

• Cash paid into bank

• Cash withdrawn from bank
• Receipt of cheque
• Payment of cheque
• Dishonoured cheque
• Bank charges
• Payments made by the bank on behalf of the customers.

ILLUSTRATION-1

Mr. Hassan starts business with Rs. 15,000 on 20th January 2019, of this he
pays Rs. 10,000 into his bank account on the next day. His transactions
during the month were as follows:

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 2019 Jan Amount (Rs.)
21st Purchased office table and chairs for cash 5,000
24th Sold goods for cash 9,500
25th Paid for sign board 2,250
28th Paid auto charges 100
30th Paid wages 1,500

Dr. CASH BOOK Cr.

Date Particulars R.N L.F Amount Date Particulars V.N L.F Amount
20/1 To capital 15,000 21/1 By bank 10,000
24/1 To sales 9,500 21/1 By furniture 5,000
25/1 By 2,250
advertisement
expenses
28/1 By 100
transportation
expenses
30/1 By wages 1,500
31/1 By balance 5,650
c/d
24,500 24,500
½ To 5,650
balance
c/d

ILLUSTRATION-2

Two column cash book /Double column cash book

Enter the following transactions in a Two Column Cash Book

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 Feb 1: cash balance in hand Rs.25,000

Feb 5: sold goods to Mr. Mohan on credit Rs 30,000, the term being 5% cash
discount if paid within 7days

Feb 7: purchased a printer for personal use Rs 5,000.

Feb 10: received cash from Mr. Mohan for the goods sold on 5th

Feb 12: paid into bank Rs 5,000

Feb 15: purchased from Yash & co Rs 15,000

Feb 18: cash purchases Rs 4,000

Feb 20: Cash settled to Yash & co & discount received Rs500

TWO COLUMN CASH BOOK

Dr.
Cr.
Dat Particulars R L. Dis Amo Dat Particu V. L. Dis Amo
e . F (Rs.) unt e lars N F (Rs.) unt
N (Rs.) (Rs.)
1/2 To balance 25,00 7/2 By 5,000
b/d 0 drawing
s
10/2 To 1,500 28,50 12/2 By bank 5,000
0
Mr. Mohan
18/2 By 4,000
purchas
es
20/2 By yash 500 14,50
& co 0

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 28/2 By 25,00
balance 0
c/d
1,500 53,50 500 53,50
0 0
1/3 To bal b/d 25,00
0

NOTE: Discount columns have been merely Totaled and not Balanced
In short , it may be remembered that whenever Cash received is recorded on
the debit side of the Cash Book , discount allowed will also be recorded on
the debit side & if cash paid is recorded on credit side , discount received
also will be recorded on the credit side.

Problems on Cash Book

SIMPLE/ SINGLE COLUMN CASH BOOK
1. Enter the following transactions in a Simple Cash Book
2019 Jan Amount (Rs.)
1st Cash in hand 2,200
5th Received from Rajesh 1,300
7th Paid rent 130
8th Sold goods 1,200
10th Paid Shyam 1,700
27th Purchased furniture 1,200
31st 1 Paid salaries 1,100

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 2. Enter the following transactions in the Single Column Cash Book
2018 Dec Amount (Rs.)
1st Cash in hand 5,100
3rd Cash sales 5,600
5th Received from Vinay on account 800
7th Paid into bank 10,000
10th Paid for postage 200
12th Paid for wages 100
15th Received interest on investments 200
20th Withdrew from bank for expenses 2,200
25th Cash purchases 3,000
27th Cash sales 2,400
28th Received from Raj 1,100
29th Drew for personal use 900
30th Deposited into bank all cash in excess of 1,100

TWO COLUMN CASH BOOK

[Link] the following transactions in cash book having cash and discount
columns.
2018 April
1st Balance in hand Rs. 2,500
5th Purchased goods from Prakash for cash Rs. 750
7th Received from John Rs. 980 after allowing him discount of
Rs. 20
10th Paid to Jai & Co., Rs. 290 and received discount of Rs. 10
16th Purchased goods for cash Rs. 400
20th Paid to Shyam Rs. 760 after receiving discount of Rs. 40

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 21st Cash sales Rs. 1,000
25th Purchased office furniture and paid by cheque Rs. 250
27th Paid wages Rs. 50
28th Paid rent by cheque Rs. 150
30th Paid to Naik Rs. 380 and received a discount of Rs. 20

[Link] the following transactions in the cash book with discount columns:
Jan 2019
1st Cash in hand Rs. 11,500
5th Paid to Ram Rs. 1,300 discount allowed by him Rs. 100
8th Purchased goods Rs. 5,400
10th Received from [Link] Rs. 1,980 discount allowed Rs. 20
16th Sold goods Rs. 1,400
21st Paid to Sharma Rs.1,290 discount received Rs.110
25th Paid wages Rs.50
31st Paid to Narayan Rs. 5,300 in full settlement of their account
which shows a credit balance of Rs. 5,400

3. Enter the following transactions in a two column cash book:

Dec 2018
1st Commenced business with cash Rs. 50,000
2nd Bought goods for cash Rs.28,000
5th Received cash from Arun Rs. 2,000
7th Paid cash to Sanjay Rs. 2,900 and discount allowed by him
Rs. 100
10th Paid wages Rs. 3,000
14th Received from Rajesh cash Rs. 950 allowed him discount
Rs. 50

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 16th Paid into bank Rs. 10,000
18th Cash sales Rs. 2,500
20th Purchased stationery for cash Rs. 250
23rd Paid Varun cash Rs. 3,900 and discount allowed Rs. 100
26th Received from Rajesh Rs. 1,900 and allowed him discount
Rs. 100
30th Paid salaries Rs. 2,000

THREE COLUMN CASH BOOK

[Link] a cash book with discount, cash and bank columns for the following
transactions:
Jan 2019
1st Balance at bank Rs. 7,110
1st Balance in hand Rs. 21,714
2nd Purchased goods for cash Rs. 1,290
4th Paid wages by cheque Rs. 1,350
5th Sold goods for cash Rs. 950
9th Drew from bank for office use Rs. 1,500
12th Received a cheque from Shiva Rs. 2,490
12th Allowed him a discount and paid the same into bank Rs. 60
14th Bought office table for cash Rs. 900
18th Drew a cheque for personal use Rs. 900
20th Paid Somu by cheque in settlement of his account for Rs.
2,000 Rs. 1,900
25th Mohan deposited in bank account Rs. 700
25th Allowed him discount Rs. 50
31st Paid for stationery Rs. 180

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 [Link] the following transactions in a three columnar cash book
March
2018
1st Balance of cash in hand Rs. 16,750
4th Paid to Giri Bros. Rs. 490, discount received being Rs. 10
5th Paid into bank Rs.10,000
10th Sold goods Rs. 500 and cash deposited into bank
12th Purchased goods Rs. 2,000 and paid by cheque
15th Sold goods to Srinivas on credit Rs. 2,000
20th Received cheque from Srinivas for Rs. 1,950 and allowed
him a discount of Rs. 50
21st Paid by cheque telephone bills Rs. 1,200
22nd Deposited Srinivas’s cheque into bank
23rd Purchased goods Rs. 2,500 on credit from Gopal
24th Issued a cheque to Gopal Rs. 2,450 claimed a discount of
Rs. 50
26th Sold goods for Rs. 2,000 and deposited the cash into bank
31st Paid salary to Mohan Rs. 500 by cheque

[Link] a three column cash book from the following transactions

Jan 2019
1st Cash in hand Rs. 567
1st Cash at bank Rs. 12,657
2nd Deposited into bank Rs. 500
5th Received from A Rs. 700 and allowed him discount Rs. 10
7th Purchased furniture for cash Rs. 250
8th Paid to B by cheque Rs. 745 and received discount Rs. 5

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 13th Received from C by cheque and deposited into bank Rs.
500
15th Cash sales Rs. 785 deposited into bank Rs. 1,000
17th Purchased a moped for office use and paid by cheque Rs.
5,240
19th Paid by cheque to Mr. D Rs. 367 and received discount Rs.
3
31st Paid establishment expenses through bank Rs. 450

BANK RECONCILIATION STATEMENT

A company's general ledger account Cash contains a record of the transactions

(cheques written, receipts from customers, etc.) that involve its checking account.
The bank also creates a record of the company's checking account when it
processes the company's checks, deposits, service charges, and other items. Soon
after each month ends the bank usually mails a bank statement to the company.
The bank statement lists the activity in the bank account during the recent month
as well as the balance in the bank account.
When the company receives its bank statement, the company should verify that
the amounts on the bank statement are consistent or compatible with the amounts
in the company's Cash account in its general ledger and vice versa. This process
of confirming the amounts is referred to as reconciling the bank statement, bank
statement reconciliation, bank reconciliation, or doing a "bank rec." The benefit
of reconciling the bank statement is knowing that the amount of Cash reported by
the company (company's books) is consistent with the amount of cash shown in
the bank's records.
Because most companies write hundreds of checks each month and make many
deposits, reconciling the amounts on the company's books with the amounts on
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the bank statement can be time consuming. The process is complicated because
some items appear in the company's Cash account in one month but appear on the
bank statement in a different month. For example, checks written near the end of
August are deducted immediately on the company's books, but those checks will
likely clear the bank account in early September. Sometimes the bank decreases
the company's bank account without informing the company of the amount. For
example, a bank service charge might be deducted on the bank statement on
August 31, but the company will not learn of the amount until the company
receives the bank statement in early September. From these two examples, you
can understand why there will likely be a difference in the balance on the bank
statement vs. the balance in the Cash account on the company's books. It is also
possible (perhaps likely) that neither balance is the true balance. Both balances
may need adjustment in order to report the true amount of cash.
After you adjust the balance per bank to be the true balance and after you adjust
the balance per books to also be the same true balance, you have reconciled the
bank statement.

In short Bank Reconciliation Statement is a statement prepared on a particular

date to reconcile the balance as per cash book with the balance as per pass book
and to know the exact balance with the bank.
Reasons for the difference in two balances:
• Cheques issued but not yet presented for payment
• Cheques paid into bank but not yet collected by the bank
• The bank usually makes charges for the collection of outstation cheques
and for the various services rendered by it to the trader.
• Interest or dividend on investments and rent on property collected by the
bank on behalf of the client.

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 • Insurance premium, subscriptions to periodicals and other payments made
by the bank on behalf of the client
• Cheques or cash omitted to be banked
• Errors in totaling of the cash book
• Cheques or bills of exchange dishonoured
• Payment by customers direct into businessman’s account with the banker
• Wrong debit or credit given in the pass book or the cash book
• Interest on current account for keeping a minimum balance credited by the
bank
• Bills collected by the bank on behalf of the customers
• Errors in the cash book or the pass book.

PROBLEMS ON BANK RECONCILLIATION STATEMENT

1. On 31st December 2018, the cash book of a firm showed a bank balance
of Rs. 3,000. From the following particulars calculate the balance as per
pass book.
a. Cheque had been issued for Rs. 2,500, out of which cheques worth
Rs. 2,000 only were presented for payment.
b. Cheques worth Rs. 700 were paid on 28th December but had not been
credited by the bank. One cheque for Rs. 250 was entered in the cash
book on 30th December, but was banked on 3rd January 2019.
c. A cheque from Govardhan for Rs. 200 was paid in on 26th December
but was dishonoured and the advice was received on 2nd January
2019.
d. Pass book showed bank charges of Rs. 10 debited by the bank. It
also showed Rs. 400 collected by the bank as interest.

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 e. One debtor deposited a sum of Rs. 250 in the account of the firm on
20th December. Intimation in this respect was received from the bank
on 2nd January 2019.
2. On 31st December 2018 the cash book of Sri. Nadeem showed a balance of
Rs. 10,500. On comparing with the pass book, it was ascertained:
a. Cheques issued prior to date for Rs. 5,000 not presented for payment
during December.
b. Cheques sent for collection during December 2018 but were
collected and credited in January 2019 Rs. 300
c. In the pass book there is credit of Rs. 120 for interest on deposit and
a debit of Rs. 200 for bank charges.
d. A wrong debit of Rs. 1,500 found in the pass book.
e. Insurance premium paid directly by bank understanding advice Rs.
550.
Prepare a bank reconciliation statement as 31st December 2018.

3. Prepare a Bank Reconciliation Statement from the following particulars:

a. Credit balance as per pass book on 31st March 2019, Rs. 25,000
b. Cheques amounting to Rs. 4,000 were deposited for collection but
cheques for Rs. 2,000 have been credited in the pass book in April
2019
c. Cheques amounting to Rs. 2,500 were drawn on 25th March 2019 out
of which cheques for Rs. 1,500 were cashed upto 31st March 2019
d. A wrong debit of Rs. 100 appears in the pass book
e. Bank charges of Rs. 25 appear in the pass book but not in the cash
book.
f. Interest on investments collected by the bank and credited in the pass
book Rs. 400 but not entered in the cash book.

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 g. A cheque for Rs. 150 received from a customer was entered in the
cash book in March 2019 but the same was omitted to paid into bank.

4. On 31st December 2018 your pass book showed a credit balance of Rs.
5,000. Before that date you had issued cheques worth Rs. 1,000 of which
cheques worth Rs. 300 were not yet cashed. On 26th December, you
deposited a cheque for Rs. 150 in the bank but you did not enter it in cash
book. The pass book showed a credit of Rs. 40 for interest and a debit of
Rs. 10 for bank charges and the cash book had no corresponding entries for
them. A cheque for Rs. 1,200 deposited in your account No. 2 was wrongly
credited by the bank to this account. Dishonoured bill was debited in the
pass book only for Rs. 500. Cheques for Rs. 700 paid into the bank were
not yet credited in the pass book.
Determine the balance as per cash book as on that date.
5. On 31st March 2018 the cash book of Sudhakar showed an overdraft
balance of Rs. 24,000. With the help of following information prepare
Bank Reconciliation Statement and show the balance as per pass book:
a. Out of the two cheques issued to Rakesh, one for Rs. 2,000 and
another for Rs. 2,500, the cheque for Rs. 2,500 was cashed only on
10th April 2018.
b. A wrong credit of Rs. 300 relating to some other account was found
in the pass book.
c. Out of the three cheques deposited in the bank for collection on 25 th
March for Rs. 2,500; Rs. 3,500; and Rs. 4,500 the cheque for Rs.
2,500 alone was collected by 31st March 2018.
d. There are debits of Rs. 750 for interest on overdraft and Rs. 250 for
Bank charges in the pass book which have not been entered in the
cash book.

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 e. The pass book showed that bank had collected Rs. 4,000 as interest
on Government Securities but there is no entry in the cash book for
this.
f. A bill receivable for Rs. 6,000 discounted with the bank in January
2018 was dishonoured on 30th March 2018 and was debited in the
pass book.

6. On checking Ram’s cash book with the bank statement of his overdraft
current account for the month of 31st March 2016 you find the following:
a. Cash book showed an overdraft of Rs. 4,500
b. The payment side of the cash book had been undercast by Rs. 150
c. A cheque for Rs. 750 drawn on his saving account has been shown
as drawn on current account.
d. Cheques amounting to Rs. 7,000 drawn and entered in the cash book
had not yet been presented.
e. Cheques amounting to Rs. 6,000 sent to the bank for collection
though entered in the cash book had not been credited by the bank.
f. Bank charges of Rs. 75 as per bank statement of account had not
been taken into the cash book.
g. Dividend of the amount of Rs. 2,500 had been paid direct into the
bank and not entered in the cash book.
You are requested to prepare the bank reconciliation statement as on
31st March 2007.
7. On 31st January 2007 the pass book of Prabhu showed a debit balance of
Rs. 41,000. Prepare a bank reconciliation statement with the following
information:
a. Cheques amounting to Rs. 15,600 were drawn on 27th January 2007
out which cheques for Rs. 11,000 were cashed upto 31 st January
2007
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 b. A wrong debit of Rs. 800 has been given by the bank in pass book.
c. A cheque for Rs. 200 was credited in pass book but was not recorded
in cash book.
d. Cheques amounting to Rs. 21,000 was deposited for collection. But
cheques for Rs. 7,400 have been credited in pass book on 5 th
February 2007.
e. A cheque for Rs. 1,000 returned dishonored and was debited in pass
book only.
f. Interest and bank charges amounted to Rs. 100 and were not
accounted for in cash book.
g. A cheque of Rs. 500 debited in the cash book omitted to be banked.
8. From the following particulars prepare a bank reconciliation statement
showing the balance as per cash book on 31st December 2015.
a. Out of cheques of Rs. 9,200 paid on December 29th Rs. 4,200 appear
to have been credited in the pass book only on 2nd January 2016
b. The cheque issued in December 2015 amounting in all to Rs. 15,000
of which Rs. 6,000 have been cashed in the same month.
c. The banker wrongly credited a cheque for Rs.1,200
d. Rs. 900 interest on overdraft and Rs. 50 for bank charges debited in
the pass book on 31st December
e. Pass book shows a credit of Rs. 1,200 as interest on securities
collected by the banker.
f. The bank pass book showed an overdraft of Rs. 19,200

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TRY YOURSELF:
1. Enter the following transactions in Simple cash book 2019.

Jan 1st Commenced business with cash Rs. 24,000

Jan 2nd Cash purchases Rs. 4,000
Jan 6th Cash sales Rs. 8,000
Jan 15th Received commission Rs. 200
Jan 18th Paid interest Rs. 160
Jan 28th paid for stationery Rs. 240
Jan 29th Received from Ram Rs. 2,000

[Link] the following transactions in Simple Cash Book:

July 2019 Particulars Amount (Rs.)

1 Balance of cash in hand 15,000
8 Purchased goods for cash from X for 3,200
15 Sold goods for cash to Y 4,800
20 Received commission 650
28 Paid to Satish on account 7,150
31 Paid salary to the office clerk 1,000
31 Paid office rent 600

[Link] the following transactions in a Simple Cash Book

Jan 2019 Particulars Amt (Rs.)

1 Amar started business with 80,000

4 Purchased goods for cash 40,000

6 Received from Suresh 20,000

10 Paid into bank 5,000

15 Sold goods for cash 30,000

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 16 Paid advertising charges 2,000

20 Purchased office furniture 35,000

[Link] the following transactions prepare a single column cash book

March 2019 Particulars Amt (Rs.)

1 Commenced business with cash 20,000

4 Bought goods for cash 5,000

6 Sold goods for cash 4,000

10 Paid to Ravi 7,000

15 Purchased office furniture 2,000

16 Paid wages 470

20 Withdrew for office use 700

[Link] the following transactions in a Three Column Cash Book:

JAN 2019 Particulars Amount (Rs.)

1st Cash in hand 5,374
1st Balance at bank 15,490
3rd Cash sales 6,400
5th Paid into bank 7,000
6th Received a cheque from Sneha 700
8th Paid into bank for Sneha’s cheque 700
10th Paid to Anurag by cheque 980

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 and discount allowed by him 20
12th Cash purchases 2,500
14th Withdrew from bank for office use 5,000
15th Received cheque from Lucky & 950
Co.,
and allowed him discount 50
18th Cash sales 7,500
19th Paid into bank for Lucky & Co’s 950
cheque
19th Paid cash into bank 4,000
21st Cash paid for stationery 120
23rd Paid commission to Rakesh by 500
cheque
25th Received cheque from Chander 1,000
Mohan and paid the same into bank
27th Lucky & Co’s cheque dishonoured
29th Drew a cheque for personal use 800
31st Paid salaries by cheque 1,500
31st Paid salaries by cash 500
31st Bank charges 20
31st Insurance premium 520

[Link] three column cash book from the following transactions

Date Particulars
1.1.2018 Balance of cash in hand Rs.40,000 Bank Overdraft Rs.1,00,000
3.1.2018 Received a bearer cheque from Mahesh for Rs.50,000 and allowed
him discount Rs. 1,300

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6.1.2018 Deposited into bank Mahesh cheque along with cash Rs.10,000
10.1.2018 Paid to Anil by bearer cheque Rs.3,200 in settlement of Rs.3,500
15.1.2018 Received from cash sales: Cash Rs.2,750 and crossed cheque
Rs.52,250
19.1.2018 Paid for cash purchases by cheque Rs.6,450
22.1.2018 Paid by cheque to kavya Rs.7,250 in settlement of Rs.8,000
25.1.2018 Draw for office use RS.1,900 and for personal use RS. 1,000
27.1.2018 Paid for advertisement Rs.2,450
28.1.2018 Paid staff salary by cheque Rs. 22,500
29.1.2018 Paid office rent by cash Rs.4,000 and house rent by cheque
Rs.3,750
30.1.2018 Received a cross cheque of RS.5,800 from Srinivas in settlement
of Rs.6,200

[Link] a three column cash book from the following information:

01.3.2019 Balance b/d Cash-Rs.13,720 & Bank – Rs.9,360

05.3.2019 Cash sales Rs.17,000
08.3.2019 Cash paid into bank Rs.40,000
10.3.2019 Paid Mr. Haridas by cheque Rs,9,700 and received discount
Rs.300
14.3.2019 Cash drawn for office use Rs.10,000
17.3.2019 Personal drawings Rs.5,000
20.3.2019 Purchased goods and paid by cheque Rs.5,000
22.3.2019 Cash sales Rs.20,000
23.3.2019 Paid rent Rs.1,000
25.3.2019 Paid into bank Rs.2,000

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 [Link] a three-column cash book of a merchant by recording the
following transactions.
Balance the cash book on 31.1.2018.
Date Particulars
1.1.2018 Commenced business with cash Rs. 1,00,000
2.1.2018 Paid into bank Rs. 80,000
7.1.2018 Purchased goods by cheque Rs. 30,000
10.1.2018 Paid rent Rs. 1,500
12.1.2018 Purchased furniture by cheque Rs. 1,800
15.1.2018 Cash sale Rs. 6,500
16.1.2018 Gave Gopal a cheque for Rs. 9,750 and he allowed discount Rs.
250
18.1.2018 Received from Narayan a cheque for Rs. 15,000 and he was
allowed a discount of Rs. 300
20.1.2018 Paid into bank Rs. 15,000
25.1.2018 Paid wages Rs. 600
28.1.2018 Drew for office use Rs. 4,000
30.1.2018 Received from Gopal Rs. 1,000
31.1.2018 Withdrew for personal use by cheque Rs. 1,500

[Link] a Cash Book with discount, cash and bank columns for the
following transactions.
2019 Jan Particulars Amt (Rs.)

1 st Balance at Bank 71,100

1st Balance in hand 2,17,140

2nd Purchased goods for cash 12,900

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4th Paid wages by cheque 13,500

5th Sold goods for cash 9,500

9th Drew from bank for office use 15,000

12th Received a cheque from Shiva and 24,900

allowed him a discount and paid the same into bank
600

14th Bought office table for cash 9,000

18th Drew a cheque for personal use 9,000

20th Paid Sonu by cheque in settlement of his a/c for 19,000

Rs. 20,000
25th Mohan deposited in our Bank a/c and 70,000
allowed him discount
500

31st Paid for stationery 1,800

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[Link] the following particulars, prepare a Bank reconciliation statement
on 30.06.2018
(a) Balance as per pass book (Cr.) on 30.06.2015 Rs. 9,000
(b) Cheques issued but not presented before 30.06.2015 Rs.15,000
(c) Cheques deposited but not credited Rs.1,500
(d) Banker has given credit in the pass book for interest Rs.150

[Link] the following particulars, prepare a bank reconciliation statement as on

30.06.2018.
a) Overdraft as per cash book Rs.1,000
b) Cheques issued but not presented Rs.2,000
c) Cheques deposited but not credited Rs.5,000
d) Dividends collected and credited in the pass book only Rs.1,200

************ END OF THE MODULE************

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