Prepare a double column cash book with the help of following information for December 2016:

01	Started business with cash	1,20,000
03	Cash paid into bank	50,000
05	Purchased goods from Sushmita	20,000
06	Sold goods to Dinker and received a cheque	20,000
10	Paid to Sushmita cash	20,000
14	Cheque received on December 06, 2010, deposited into bank
18	Sold goods to Rani	12,000
20	Cartage paid in cash	500
22	Received cash from Rani	12,000
27	Commission received	5,000
30	Drew cash for personal use	2,000

Solution:  

Cash Book
Dr.									Cr.
Date	Particulars	LF	Cash	Bank	Date	Particulars	LF	Cash	Bank
2016					2016
Dec.01	Capital		1,20,000		Dec. 03	Bank	C	50,000
Dec.03	Cash	C		50,000	Dec. 10	Sushmita		20,000
Dec.06	Dinker		20,000		Dec. 14	Bank	C	20,000
Dec.14	Cash	C		20,000	Dec. 20	Cartage		500
Dec.22	Rani		12,000		Dec. 30	Drawings	C	2,000
Dec.27	Commission		5,000		Dec. 31	Balance c/d		64,500	70,000
			1,57,000	70,000				1,57,000	70,000

 

Explanation:  

1. December 03, 2010: Cash paid into bank 

• Particulars: Cash paid into the bank. 

• Contra Entry Explanation: 

• Credit (C): Decrease in the cash account (₹50,000 is credited to the cash account). 

• Debit (D): Increase in the bank account (₹50,000 is debited to the bank account). 

• Purpose: Reflects the movement of cash from the cash account to the bank account. 

2. December 06, 2010: Cheque received and deposited into bank 

• Particulars: Cheque received on December 06, 2010, deposited into the bank. 

• Contra Entry Explanation: 

• Credit (C): No impact on the cash account (since the cheque is received and not paid in cash). 

• Debit (D): Increase in the bank account (reflects the amount of the cheque deposited into the bank). 

• Purpose: Illustrates the banking transaction involving a cheque.