Question

Double column cash book
June10 discounted a bill of exchange at 1% through bank 5000

Answer 1

Answer:

rs 4950 will be debited to bank column of cash book

To B/R A/c 4950

Answer 2

Answer:

A double column cash book is a type of ledger that records both cash transactions and bank transactions in two separate columns. In this way, it provides a comprehensive record of all financial transactions and helps in keeping track of cash inflows and outflows.

Regarding the given transaction on June 10, a bill of exchange for 5000 was discounted at 1% through the bank. This means that the owner of the bill received an advance payment for the bill from the bank, after deducting the discount rate. This transaction is recorded in the bank column of the double column cash book, as it involves a transaction with the bank. The entry will be recorded as follows:

Debit Bank Column: 5000

Credit Bank Column: 4950 (5000-1% of 5000)

The debit entry in the bank column represents the advance payment received by the bill owner, while the credit entry represents the amount paid by the bank after deducting the discount rate.

By recording transactions in a double column cash book, it becomes easier to reconcile bank statements and track the financial status of a business. Moreover, this type of ledger provides a clear picture of cash transactions, bank transactions, and their effect on the overall financial position of a business.

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