Two Column Cash Book / Double Column Cash Book
Two Column Cash Book / Double Column Cash Book :
Learning Objectives:
-
Define and explain a two/double column cash book.
-
Prepare a two column cash book.
-
What is the difference between a single column cash book and a double column cash book?
Definition and Explanation:
A double column cash book or two column cash book is one which consists of two separate columns on the debit side as well as credit side for recording cash and discount. In many concerns it is customary for the trader to allow or to receive small allowance off or against the dues. These allowances are made for prompt settlement of accounts. In certain business almost all receipts or payments are accompanied by such discounts and in order to avoid unnecessary postings separate columns in the cash book are introduced to record the discounts received or allowed. These discount columns are memorandum columns only. They do not form the discount account. The discount column on the debit side of the cash book will record discounts allowed and that on the credit side discounts received.
Posting:
The cash columns will be posted in the same way as single column cash book. But as regards discount column, each item of discount allowed (Dr. side of the cash book) will be posted to the credit of the respective personal accounts. Similarly each item of discount received will be posted to the debit of the respective personal account. Total of the discount column on the debit side of the cash book will be posted to the debit side of the discount account in the ledger and the total of discount column on the credit side of the cash book on the credit side of the discount account. The discount columns are not balanced like cash column of the tow column cash book.
Format of the Double Column Cash Book:
Debit Side Credit Side
Date | Particulars | V.N. | L.F. | Discount | Cash | Date | Particulars | V.N. | L.F. | Discount | Cash |
Example of Two Column Cash Book:
From the following transactions write up a two column cash book and post into ledger:
1991 | |
Jan. 1 | Cash in hand $2,000 |
” 7 | Received from Riaz & Co. $200; discount allowed $10 |
” 12 | Cash sales $1,000 |
” 15 | Paid Zahoor Sons $500; discount received $15 |
” 20 | Purchased goods for cash $300 |
” 25 | Received from Salman $500; discount allowed $15 |
” 27 | Paid Hussan & Sons $300. |
” 28 | Bought furniture for cash $100 |
” 31 | Paid rent $100 |
Solution:
Cash Book
Debit Side Credit Side
Date | Particulars | V.N. | L.F. | Discount | Cash | Date | Particulars | V.N. | L.F. | Discount | Cash |
1991 1991 |
To Balance b/d To Riaz & Co. To Sales a/c To SalmanTo Balance b/d |
10 15 |
2,000 200 1,000 500 |
1991 |
By Zahoor & Sons By purchase a/c By Hussan&Sons By Furniture a/c By Rent a/c By Balance c/d |
15 |
500 300 300 100 100 2,400 |
||||
25 | 3,700 | 15 | 3,700 | ||||||||
2,400 |
Riaz & Co.
1991 |
By Cash By Discount |
$ |
Sales Account
1991 |
By Cash |
$ |
Salman Account
1991 |
By Cash By Discount |
$ |
Babar Account
1991 |
To Cash |
$ |
|
Zahoor Account
1991 |
To Cash Discount |
$ |
|
Purchases Account
1991 |
To Cash |
$ |
|
Hussan & Sons
1991 |
To Cash |
$ |
|
Furniture Account
1991 |
To Cash |
$ |
|
Rent Account
1991 |
To Cash |
$ |
|
Discount Account
1991 |
To Sundries as per Cash book |
$ 25 |
1991 |
By Sundries as per cash book |
15 |
You may also be interested in other articles from “subdivision of journal” chapter:
- Definition and Explanation of Cash Book
- Single Column Cash Book
- Two Column Cash Book/Double Column Cash Book
- Three Column Cash Book
- Bank Reconciliation Statement
- Petty Cash Book
- Purchases Day Book
- Purchases Returns Book
- Sales Day Book
- Sales Returns Book
- Bills Receivable Book
- Bills Payable Book
- Journal Proper
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taatato
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Interest allowed by the bank ….
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