CA Foundation Exam > CA Foundation Questions > Contra entries are passed only whena)double c...
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Contra entries are passed only when
- a)double column cash book is prepared
- b)three-column cash book is prepared
- c)simple cash book is prepared
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Contra entries are passed only whena)double column cash book is prepar...
Contra Entries are Passed when. Cash is deposited into a bank by office: It is a payment by cash and receipt in bank. Therefore, it is to be entered on the credit side of the cash book, in the cash column as “By Bank” and on debit side in the bank column as “To Cash”.when cash is deposited into the bank when cash is drawn from the bank for business purposes when a Cheque Recieved from a debtor on a date subsequent to its receipt is deposited into the bank Contra entries are passed only three-column cash book is prepared
Community Answer
Contra entries are passed only whena)double column cash book is prepar...
Explanation:
Contra entries are passed only when a three-column cash book is prepared. Let's break down the reasons for this:
Three-Column Cash Book:
- In a three-column cash book, there are separate columns for cash, bank, and contra entries.
- The cash column is used for recording cash transactions, the bank column is used for recording bank transactions, and the contra column is specifically used for contra entries.
- Contra entries involve transactions where both cash and bank accounts are affected simultaneously, such as transfers between cash and bank accounts, or withdrawals and deposits into bank accounts.
Significance of Three-Column Cash Book for Contra Entries:
- With a three-column cash book, the contra entries can be accurately recorded and tracked separately from other cash and bank transactions.
- This segregation helps in maintaining clarity and transparency in the accounting records, ensuring that contra entries are properly documented and easily identifiable.
Other Options:
- Option A (double column cash book) and option C (simple cash book) do not provide the specific columns required to differentiate and record contra entries separately.
- In a double column cash book, there are only two columns for cash and bank transactions, making it difficult to distinguish contra entries.
- A simple cash book typically has only one column for all transactions, which does not allow for the detailed recording of contra entries.
Therefore, to accurately handle and document contra entries, a three-column cash book is necessary as it provides the appropriate columns for recording such transactions distinctly.
Contra entries are passed only when a three-column cash book is prepared. Let's break down the reasons for this:
Three-Column Cash Book:
- In a three-column cash book, there are separate columns for cash, bank, and contra entries.
- The cash column is used for recording cash transactions, the bank column is used for recording bank transactions, and the contra column is specifically used for contra entries.
- Contra entries involve transactions where both cash and bank accounts are affected simultaneously, such as transfers between cash and bank accounts, or withdrawals and deposits into bank accounts.
Significance of Three-Column Cash Book for Contra Entries:
- With a three-column cash book, the contra entries can be accurately recorded and tracked separately from other cash and bank transactions.
- This segregation helps in maintaining clarity and transparency in the accounting records, ensuring that contra entries are properly documented and easily identifiable.
Other Options:
- Option A (double column cash book) and option C (simple cash book) do not provide the specific columns required to differentiate and record contra entries separately.
- In a double column cash book, there are only two columns for cash and bank transactions, making it difficult to distinguish contra entries.
- A simple cash book typically has only one column for all transactions, which does not allow for the detailed recording of contra entries.
Therefore, to accurately handle and document contra entries, a three-column cash book is necessary as it provides the appropriate columns for recording such transactions distinctly.
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Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?
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Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Contra entries are passed only whena)double column cash book is preparedb)three-column cash book is preparedc)simple cash book is preparedd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
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