Prepare a performa of Bank column Cash Book with imaginary figures.
Answers
Answer:
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 checks and works as a bank account. Both the columns are totaled 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.
Format
The format/specimen of a double column cash book is given below:
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
