What Is a Single Column Cash Book?
The single column cash book resembles a T-shaped cash account in almost all
respects. The pages of this book are vertically divided into two equal parts.
The receipts are entered on the left (debit) side. Payments are entered on the
right (credit) side.
A single column cash book has only one money column on the debit and credit
sides to record cash transactions.
This is the reason why it is called a single column cash book (or a simple cash
book).
Explanation
A single column cash book records only cash receipts and payments.
This form of a cash book has only one amount column on each of the debit
and credit sides of the cash book.
All the cash receipts are entered on the debit side, and cash payments are
entered on the credit side.
In essence, a single column cash book is nothing but a cash account. A cash
account cannot show a credit balance on the principle that you cannot pay
what you do not have.
This means that a cash account always shows a debit balance or nil balance.
Format of a Single-Column Cash Book
The standard format of a single column cash book is shown below.
Functions of the Columns in a Single Column Cash Book
The format above consists of five columns on both sides of the cash book. The
purpose/function of each column is briefly described in this section.
Date Column
The year, month, and day of the receipts and payments of cash are written in
the date column on the debit and credit sides of the cash book.
Don't repeat the year and month for additional entries until a new month starts
(or a new page is added).
Description Column
The description column starts with the words "balance brought down" or
simply "balance."
This column shows the cash balance at the start of the current period. After
recording the opening balance in the description column, the cash
transactions of the current period are recorded.
When cash is received on an account, the name of that account is written on
the debit side. When cash is paid on an account, the name of the account is
written on the credit side in the description column.
Voucher Number
For every entry recorded in the cash book, there must be a proper voucher.
When money is received, an original receipt is given to the payer and
the payee retains a copy.
This receipt is called a debit voucher because it supports the entries on the
debit side of the cash book.
When a payment is made, an original receipt is obtained from the payee. This
receipt is called a credit voucher because it supports entries on the credit side
of the cash book.
The debit voucher's serial number is recorded on the debit side, and the serial
number of the credit voucher is recorded on the credit side in the cash book's
voucher number (V. No.) column.
Posting Reference
When entries from the cash book are posted to ledger accounts, the relevant
account number is written in this column.
Amount Column
The amount column is used to enter the amount received or paid as a result of
a cash transaction.
Balancing the Cash Book
At the end of the day, or at the end of the accounting period, the amount
columns on both sides are totaled.
The cash column's total on the debit side will always exceed the total of the
credit side. This is because we cannot pay more cash than we have received.
The difference represents the actual cash in hand, which should agree with the
amount of cash in the cash box.
To make the two sides of the single column cash book equal, the difference is
written on the credit side as "balance carried down" or simply "balance."
Posting the Single Column Cash Book to the Ledger
The following points should be kept in mind when posting the single column
cash book to the relevant accounts in the ledger.
First, the opening and closing balances of the cash book are not posted.
Second, the items on the debit side of the cash book are posted to the credit
sides of the accounts in the ledger, and the respective account numbers are
entered in the posting reference column of the cash book.
Finally, the items on the credit side of the cash book are posted on the debit
sides of the accounts in the ledger, and the respective account numbers are
entered in the posting reference column of the cash book.
Example
Record the transactions shown below in a single column cash book and post to
the ledger.
For the year 2016, the transactions are as follows:
Sep. 01: Cash in hand (balance b/d) $2,327
Sep. 02: Paid salaries for August $1,500
Sep. 05: Cash received from S & Co. $1,360
Sep. 06: Purchased merchandise for cash $ 700
Sep. 07: Cash sales for the first week $2,350
Sep. 10: Paid cash for office furniture $1,540
Sep. 12: Purchased stationery for cash $85
Sep. 15: Cash sales for the second week $4,500
Sep. 17: Cash paid to A & Co. $890
Sep. 20: Purchased merchandise for cash $1,230
Sep. 21: Cash sales for the third week $1,200
Sep. 24: Cash received from S & Co. $1,200
Sep. 28: Paid office rent $800
Sep. 30: Cash sales for the last week $3,600
Solution
Cash Book
Balancing an account (single column)
Date Description Cash$ Date Description Cash$
1.1.20 Balance 5 000 10.1.20 Salary 1000
5.1. Sales 10 000 15.1.20 wages 500
31.1.20 Balance c/d xxx
xxxx xxxx
Next day Balance b/d xxx
of c/d
date
Date Description Cash$ Date Description Cash$
1.1.20 Balance 5000 10.1.20 Salary
15.1.20 wages 500
11.1.20 Jhon 16.1 Rent 1000
12.1.20 Sales 5000 17.1 Bank (contra) 2000
13.1.202 sales 2000
0
17.1.20 Cash (contra) 2000 25.1.21 Cash(contra) 3000
25.1.21 Bank(contra) 3000 31.1.21 Balance c/d xxx
xxxx xxxx
???? Balance b/d xxx
A double column cash book, also known as a two column cash book, consists
of two columns on each side to record cash and bank transactions.
Rather than separating cash and bank accounts, a double column cash book
enables accountants to maintain the two accounts side by side.
This allows for greater convenience when recording transactions. In particular,
we can quickly see overall balances.
Simply by adding a bank column to both sides of a single column cash book,
we can turn it into a double column (or two column) cash book.
Advantages of Double Column Cash Book
Compared to single column cash books, double column cash books have the
following advantages:
Convenience: Cash and bank accounts are kept side by side in one
place.
Cost- and time-effective: No separate bank account needs to be
maintained.
Format/Specimen of Double Column Cash Book
The format of a double column cash book is similar to a single column cash
book. The exception is that an additional column is included on both sides to
record cash discount.
An overview of the format of a double column cash book, which is commonly
used by organizations to account for their cash transactions, is shown below.
Posting the Double Column Cash Book
The following procedure is used to post entries from a double column cash
book to ledger accounts:
1. Entries without discounts are posted in the usual manner, as in a single
column cash book.
2. Entries with discounts that appear on the debit side are posted to the
credit of the respective account with the total amount (i.e., actual cash
paid and also discount received).
3. Entries with discounts that appear on the credit side are posted to the
debit of the respective account with the total amount (i.e., actual cash
paid and also discount received).
4. Total of the discount column on the debit side is posted as debit to the
discount allowed account.
5. Total of the discount column on the credit side is posted as credit to the
discount received account.
Example
Prepare a double column cash book using the following transactions, and post
the entries, therefore, to ledger accounts.
For the year 2016, the transactions are as follows:
Jan. 01: Opening balance of cash $4,500
Jan. 03: Received cash from R & Co. $3,880 and allowed them a
discount of $20
Jan. 05: Paid cash to H & Co. $3,590 and received a discount of
$10
Jan. 07: Merchandise purchased for cash $940
Jan. 09: Received interest on investment $365
Jan. 12: Purchased machinery for cash $4,100
Jan. 15: Cash sales for the first half of the month $6,500
Jan. 17: Paid cash for stationery $635
Jan. 20: Paid for office furniture $710
Jan. 21: Paid to H & Co. $970 and received a cash discount of $30
Jan. 28: Cash received from R & Co. $670 and allowed them a
discount of $30
Jan. 31: Cash sales for the second half of the month $7,600
Jan. 31: Paid for salaries $1,250
Solution
Double column cash book
The double column cash book (also known as two column cash book) has two money
columns on both debit and credit sides – one to record cash transactions and one to record
bank transactions. In other words, we can say that if we add a bank column to both sides of a
single column cash book, it would become a double column cash book. The cash column is
used to record all cash transactions and works as a cash account whereas bank column is
used to record all receipts and payments made by Cheque and works as a bank account.
Both the columns are totalled and balanced like a traditional T-account at the end of an
appropriate period which is usually one month.
Since a double column cash book provides cash as well as bank balance at the end of a
period, some organizations prefer to maintain a double column cash book rather than
maintaining two separate ledger accounts for recording cash and bank transactions.
The above format of double column cash book has six columns on both debit and credit
sides. The purpose of cash and bank columns has been explained at the start of this article
and the purpose of date, description, voucher number (VN) and posting reference (PR)
columns has been explained in single column cash book article.
Balancing double column cash book
Contra entry
Means a bank transaction which will affect both side of cash book
Example
Cash deposited in the bank (Bank balance increase
Cash balance decrease)
Cash withdrawn from the bank (cash balance increase bank balance
decrease)
The format/specimen of a double column cash book is given below:
Important points to remember while making
entries in a double column cash book
Recording cash transactions:
1. All cash receipts are recorded in cash column on the debit side and all cash
payments are recorded in cash column on credit side of the double column cash
book.
2. If cash is received from a debtor or customer and is deposited into the bank account
on the same date, the entry will be made in the bank column on the debit side, not in
the cash column.
Recording bank transactions:
1. When a check is received and the same is deposited into the bank account on the
same date, the amount of the check is entered in the bank column on the debit side.
2. When a check is received and the same is not deposited into the bank on the same
date, the amount of the check is entered in the cash column, not in the bank column.
3. When a check received from a receivable on a date subsequent to its receipt is
deposited into the bank account, the entry is made in the bank column on the debit
side and in the cash column on credit side. It is called a contra entry.
4. When a check is issued, the amount of the check is entered in the bank column on
the credit side.
Recording contra entries:
The “contra” is a Latin word which means against or opposite. The contra entry is an entry
which involves a cash account and a bank account and which is recorded on both debit and
credit sides of the double column cash book at the same time. This entry is not posted to any
ledger account because both debit and credit aspects of transaction are handled within the
cash book and the double entry work is completed. In posting reference column, the letter
“C” is written to denote that the entry is a contra entry and will not be posted to any ledger
account. A contra entry is made in the following circumstances:
(1). When cash is deposited into the bank account:
The entry for depositing cash into the bank account is:
Bank [Dr]
Cash [Cr]
The deposited amount is written in the bank column on debit side and cash column on credit
side.
(2). When cash is withdrawn from bank account for business use:
The entry for withdrawal of cash from bank account for business purpose is:
Cash [Dr]
Bank [Cr]
The withdrawn amount is written in the cash column on debit side and bank column on credit
side.
Important: The contra entry is made only when the cash is withdrawn for business use. If
cash is withdrawn for personal use, it will be recorded only in the bank column on credit side
of the cash book.
(3). When a check received from a receivable or customer on a date subsequent to its
receipt is deposited into the bank account:
When a check is received and is not deposited into the bank account on the same date, it is
recorded in the cash book just like a normal cash receipt. On a subsequent date, when the
check is deposited into the bank account, the following entry is made:
Bank [Dr]
Cash [Cr]
The amount of the check is recorded in the bank column on debit side and cash column on
credit side.
ADVERTISEMENT
Balancing and posting a double column cash book
Both cash column and bank column of double column cash book are totaled and balanced at
the end of an appropriate period. The process of balancing and posting a cash book has
been explained in detail in single column cash book article. The same process is also
applicable to a double column cash book.
The following example summarizes the whole explanation given above.
March 01: Cash balance $1,450 (Dr.)
March 02: Paid to Mark & Co. by cash$120.
March 04: Received from John & Co. a cash amounting to $400.
March 08: Purchased stationary for cash, $25.
March 12: Purchased merchandise for cash, $525.
March 13: Sold merchandise(goods) for cash, $1,800.
March 17: Cash taken from office for personal purpose, $40.
March 19: Cash paid for merchandise purchased, $630.
March 22: Received a cash from Peter & Co. $4000
March 25: Paid a cash to Daniel Inc. for $270.
March 26: Bought furniture for cash for office use, $175.
March 28: Paid office rent by cash, $120.
March 29: Cash sales, $650.
Prepare single column cash book under T format and running balance method Balance T account.
Cash book(running balance method)
Required: Record the above transactions in a double column cash book
2005 $
March 1 Cash in hand 80,000
March 1 Bank Balance 120,000
March 3 Received a cheque from Osman 24,000
March 4 Deposited Osman's cheque with bank --
March 8 Withdrawn from bank for business use 20,000
March 10 Goods sold for cash 30,000
March 15 Goods bought for cash 80,000
March 18 Goods sold for cash 60,000
March 20 Paid to Rahim by cheque 26,000
March 30 Deposited into bank 16,000
March 31 Paid salary in cash 10,000
March 31 Paid rent by cheque 6,000
Enter the following transactions in a double column cash book/two column cash book.
March 01: Cash balance $1,450 (Dr.), bank balance $1,500 (Dr.).
March 02: Paid Mark & Co. by cheque$120.
March 04: Received from John & Co. a cheque amounting to $400.
March 08: Purchased stationary for cash, $25.
March 12: Purchased merchandise for cash, $525.
March 13: Sold merchandise(goods) for cash, $1,800.
March 15: Cash deposited into bank, $850.
March 17: Withdrew from bank for personal expenses, $40. (Not contra entry)
March 19: Issued a cheque for merchandise purchased, $630.
March 20: Drew from bank for office use, $150. (cash balance increase bank balance
decrease)
March 22: Received a cheque from Peter & Co. and deposited the same into bank
immediately, $880.
March 25: Paid a cheque to Daniel Inc. for $270.
March 26: Bought furniture for cash for office use, $175.
March 28: Paid office rent by cheque, $120.
March 29: Cash sales, $650.
March 30: Withdrew from bank for office use, $145.
March 31: Paid salary to employees by cheque, $300.
Cash Book (double column)
Dr(Receipt) Cr (Payment)
Date Description Cash$ Bank$ Date Description Cash$ Bank$
Mar 1 Balance b/d 50000 30000 Mar 8 Cash(contra) 5000
Mar 3 Osman 2000 18000 Mar 15 Purchase 10000
Mar 8 Bank(contra) 5000 Mar 20 Rahim 3000
Mar Sales 20000 Mar 30 Bank(contra) 6000
10
Mar Sales 30000 Mar.31 Salary 8000
18
Mar Cash(contra) 6000 Mar 31 Rent 5000
30
Mar 31 Balance c/d 83000 41000
107000 54000 107000 54000
1.4 Balance b/d 83000 41000
Cash Book (double column)
Dr(Receipt) Cr (Payment)
Date Description Cash$ Bank$ Date Description Cash$ Bank$
Mar 1 Balance b/d 50000 30000 Mar 8 Cash(contra) 5000
Mar 3 Osman 2000 18000 Mar 15 Purchase 10000
Mar 8 Bank(contra) 5000 Mar 20 Rahim 3000
Mar 10 Sales 20000 Mar 30 Bank(contra) 6000
Mar 18 Sales 30000 Mar.31 Salary 8000
Mar 30 Cash(contra) 6000 Mar 31 Rent 5000
Mar 31 Balance c/d 83000 41000
107000 54000 107000 54000
1.4 Balance b/d 83000 41000
Enter the following transactions in a double column cash book/two column cash book.
2005 $
March 1 Cash in hand 80,000
March 1 Bank Balance 120,000
March 3 Received a cheque from Osman 24,000
March 4 Deposited Osman's cheque with bank --
March 8 Withdrawn from bank for business use 20,000
March 10 Goods sold for cash 30,000
March 15 Goods bought for cash 80,000
March 18 Goods sold for cash 60,000
March 20 Paid to Rahim by cheque 26,000
March 30 Deposited into bank 16,000
March 31 Paid salary in cash 10,000
March 31 Paid rent by cheque 6,000
Cash: 107 000 -24000 =83000
Bank : 54000 – 13000 =41000
Solution:
Double Column Cash Book
Date Particulars Cash $ Bank $ Date Particulars Cash $ Bank $
2005 2005
Mar. 1 Balance b/d 80,000 120,000 Mar. 4 Bank A/c 24,000
(Being cheque deposited)
3 Osman A/c 24,000 8 Cash A/c 20,000
(Being cheque (Being cash withdrawn from
received) bank)
4 Cash A/c 24,000 15 Purchase A/c 80,000
(Cheque deposited (Being goods bought)
with bank)
8 Bank A/c 20,000 18 Cash A/c 16,000
(Being cash drawn
from bank)
10 Sales A/c 30,000 20 Rahim A/c 26,000
(Being goods sold (Cheque issued)
'for cash)
18 Sales A/c 60,000 31 Salary A/c 10,000
(Being goods sold (Being salary paid)
for cash)
30 Cash A/c 16,000 31 Rent A/c 6,000
(Being cash (Being rent paid by cheque)
deposited)
31 Balances c/d 84,000 108,000
214,000 160,000 214,000 160,000
April. 1 Balance b/d 84,000 108,000
Example 2:
Enter the following transactions of M. Rauf in a Double Column Cash Book and post them to
concerned accounts in ledger:
2005 $
Jan. 1 Cash in hand 100,000
Jan. 1 Cash at Bank 60,000
Jan. 3 Cash Sales 40,000
Jan. 4 Paid M. Arshad by a cheque 14,000
Jan. 6 Received a cheque from Babar 8,000
Jan. 8 Cash deposited into bank 19,000
Jan. 8 Babar's cheque deposited into bank --
Jan. 10 Drew from bank for office use 15,000
Jan. 11 Drew from bank for personal use of owner 24,000
Jan. 12 Cash purchases 57,000
Jan. 15 Received a cheque from S. Rashid 10,000
Jan. 16 Rashid's cheque endorsed to Shakeel --
Jan. 17 Paid Arshad Khan by a cheque 36,000
Jan. 18 Rashid's cheque returned dishonored --
Jan. 19 Our cheque to Arshad Khan was dishonored --
Jan. 21 Received interest from bank 1,400
Jan. 24 Cash sales 33,00
Jan. 27 Incidental charges debited by bank 700
Jan. 31 Salary paid by cheque 14,000
Solution:
Cash Book (double column)
Date Particular Cash $ Bank $ Date Particular Cash $ Bank $
2005 2005
Jun. 1 Balance b/d 100,000 60,000 Jan. 4 M. Arshad A/c 14,000
3 Sales A/c 40,000 8 Bank A/c 19,000
6 Babar A/c
1
8,000 8 Bank A/c 8,000
8 Cash A/c 19,000 10 Cash A/c 15,000
8 Cash A/c
2
8,000 11 Drawing A/c 24,000
10 Bank A/c 15,000 12 Purchase A/c 57,000
15 S.Rashid's A/c
3
10,000 16 Shakeel A/c 10,000
19 4
Arshad Khan 36,000 17 Arshad Khan A/c 36,000
A/c
21 Interest A/c
5
1,400 27 Bank charges A/c 700
24 Sales A/c 33,000 31 Salary A/c 14,000
31 Balance C/d 112,000 20,7000
206,000 124,400 206,000 124,400
Feb. 1 Balanced b/d 112,000 20,700
