SS1 First Term Financial Accounting Lesson Note – Analytical Cash Book

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WEEK EIGHT (8)   

TOPIC: ANALYTICAL CASH BOOK

CONTENTS:

• Two column Cash Book
• Three columns Cash Book
• Analytical petty cash book
• Petty Cash transactions to the ledgers

TWO COLUMN CASH BOOK

In this type of cash book, two separate accounts cash and bank are combined for the sake of convenience. There will be separate columns for date, particulars, folio, cash and bank.

Cash column: cash receipts and payments are recorded.

Bank column: All payments made by cheque and money received and paid into the bank are recorded.

CONTRA ENTRIES:

The word contra is a Latin word meaning opposite. In some cases, in business, there may be excess cash in hand which needs to be paid into the bank for official use.

These are known as contra entries because both sides of the cash book will have entries concerning each transaction. Contra entries are denoted by “c” or “cc” in the folio columns and on the ledger. A bank that is credited in the cash book will be debited, while cash debited on the cash book will be credited.

ILLUSTRATION 3:

Enter the following transactions in a double column cash book of TUCKSHOP INT’L Enterprises from the following particulars:

–                 N

May 1         Cash in office                                          –              260.00

May 1         Cash at Bank                                           –              1,800.00

May 3         Received bank cheque from Aboh          –              160.00

May 5         Cash Sales to date                                   –              500.00

May 6         Paid cash into bank                                 –              650.00

May 8         Paid Attabor by cheque                           –              140.00

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