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book keeping

Meaning: The two column Cash book so-called because for both debit and credit entries, it has two columns, one for recording cash transactions and the other for bank transactions. It is therefore used for recording mixed cash and bank transaction.

Accounting Entries

All payments in cash are recorded by crediting the cash column of the cash book. If the payment is by cheque the bank column is credited.

When cash is withdrawn from the bank (e.g for paying wages and sundry expenses), the cash column is debited and the bank column is credited with the amount involved.

Example:

Record the following transactions in a two column cash book. Balance the cash book and bring down the balances of cash in hand and cash at bank at the end of the period.

19×9

April 2: Introduced N2,900 cash into the business as capital

April 4: Paid N1,850 of the capital into bank

April 10: Cash purchases N300

April 15: Cash sales N450

April 20: Purchases by cheque N700

April 25: Cash sales N650

April 28: Office expenses paid for in cash N30

April 29: Cash paid into bank N1,000

April 30: Wages paid by cheque N75.

 

See also

CONTRA ENTRY

Single Column Cash Book

ISSUE OF SHARES

DISSOLUTION OF PARTNERSHIP

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