Two columnar cash book
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It has two columns:
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Cash Column, and
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Discount Column
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Cash Column is meant for recording cash receipts and payments while discount column is meant for recording discount received and the discount allowed.
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The discount column on the debit side represents the discount allowed while discount column on the credit side represents the discount received.
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Cash column of the cash book serves both the functions of a book as well as an account but discount column does not serve the function of a discount account.
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A separate discount account has to be opened in the ledger in which total debits and credits from the cash book are posted.
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Sometimes, two separate discount accounts are kept in the ledger-one for discount allowed and the other for discount received.
| Dr.
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Cr.
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Dt.
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Particulars
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L.F.
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Discount
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Cash
|
Dt.
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Particulars
|
L.F.
|
Discount
|
Cash
|
| 0
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|
|
|
|
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|
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Exercise 2
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Enter the following items in the two-column cash book.
2010
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August 1 Rahul commences business with cash Rs.10,000.
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He pays Rs.2,300 for goods purchased; Rs.500 for furniture purchased; Rs.400 for office equipment
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2 He pays rent Rs.100; pays legal cost Rs.10.
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3 He sells goods for cash Rs.1,800.
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4 He sells goods to Naveen on 5 days’ credit Rs.800
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5 He pays wages Rs.15; cartage Rs.5
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6 He buys goods for cash Rs.700 and pays a creditor Suresh Rs.425 in settlement of a claim of Rs.430.
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7 He receives cash from Naveen Rs.798 in full settlement of debt.
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8 He sells goods for cash Rs.50.
Solution
| Dr.
|
Cr.
|
|
Date
|
Particulars
|
L.F.
|
Discount
|
Cash
|
Date
|
Particulars
|
L.F
|
Discount
|
Cash
|
|
Aug.1
3
7
8
Aug 9
|
To Capital
To Sales
To Naveen
To Sales
To balance b/d
|
|
2
_____
2
_____
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10,000
1,800
798
50
_____
12,648
_____
8,193
|
Aug 1
2
5
6
8
|
By Purchases
By Furniture
By Office equipment
By Rent
By Legal Expenses
By Wages
By Cartage
By purchases
By Suresh
By balance c/d
|
|
5
_____
5
_____
5
|
2,300
500
400
100
10
15
5
700
425
8,193
_____
12,648
____
|
|
Last modified: Thursday, 14 June 2012, 10:30 AM
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