Double column cash Book opened bank account with DBI
Answers
Answer:
A two column cash book is one in which there are two columns on each side. One is used to record cash transactions, the second is used to record bank transactions or discount. When a trader keeps a bank account it becomes necessary to record the amounts deposited into bank and withdrawals from it.
Answer:
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.
Explanation:
Example
The Edward Company uses a double column cash book to record its cash and bank related transactions. It engaged in the following transactions during the month of March 2018:
March 01: Cash balance $1,450 (Dr.), bank balance $1,500 (Dr.).
March 02: Paid Mark & Co. by check $120.
March 04: Received from John & Co. a check amounting to $400.
March 05: Deposited into bank the check received from John & Co. on March 04.
March 08: Purchased stationary for cash, $25.
March 12: Purchased merchandise for cash, $525.
March 13: Sold merchandise for cash, $1,800.
March 15: Cash deposited into bank, $850.
March 17: Withdrew from bank for personal expenses, $40.
March 19: Issued a check for merchandise purchased, $630.
March 20: Drew from bank for office use, $150.
March 22: Received a check from Peter & Co. and deposited the same into bank immediately, $880.
March 25: Paid a check to Daniel Inc. for $270.
March 26: Bought furniture for cash for office use, $175.
March 28: Paid office rent by check, $120.
March 29: Cash sales, $650.
March 30: Withdrew from bank for office use, $145.
March 31: Paid salary to employees by check, $300.
Required: Record the above transactions in a double column cash book and post entries therefrom into relevant ledger accounts.
Solution
Cash book:
Example
The Edward Company uses a double column cash book to record its cash and bank related transactions. It engaged in the following transactions during the month of March 2018:
March 01: Cash balance $1,450 (Dr.), bank balance $1,500 (Dr.).
March 02: Paid Mark & Co. by check $120.
March 04: Received from John & Co. a check amounting to $400.
March 05: Deposited into bank the check received from John & Co. on March 04.
March 08: Purchased stationary for cash, $25.
March 12: Purchased merchandise for cash, $525.
March 13: Sold merchandise for cash, $1,800.
March 15: Cash deposited into bank, $850.
March 17: Withdrew from bank for personal expenses, $40.
March 19: Issued a check for merchandise purchased, $630.
March 20: Drew from bank for office use, $150.
March 22: Received a check from Peter & Co. and deposited the same into bank immediately, $880.
March 25: Paid a check to Daniel Inc. for $270.
March 26: Bought furniture for cash for office use, $175.
March 28: Paid office rent by check, $120.
March 29: Cash sales, $650.
March 30: Withdrew from bank for office use, $145.
March 31: Paid salary to employees by check, $300.
Required: Record the above transactions in a double column cash book and post entries therefrom into relevant ledger accounts.
Solution
Cash book:
please chek the pictures
