Class 11 Exam > Class 11 Notes > Balancing and posting a double column cash book
Balancing and posting a double column cash book - Class 11 PDF Download
How to balance double column cash book?
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Balancing and posting a double column cash book
Both cash column and bank column of double column cash book are totaled and balanced at the end of an appropriate period. The process of balancing and posting a cash book has been explained in detail in single column cash book article. The same process is also applicable to a double column cash book.
The following example summarizes the whole explanation given above.
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:
General ledger:
Accounts receivable subsidiary ledger:
Accounts payable subsidiary ledger:
FAQs on Balancing and posting a double column cash book - Class 11
| 1. How do you balance a double column cash book? |  |
Ans. To balance a double column cash book, you need to follow these steps:
1. Add up the total of the cash column on both the debit and credit sides.
2. Calculate the difference between the two totals.
3. Write the difference on the shorter side, either the debit or credit side, as the balancing figure.
4. Add the balancing figure to the shorter side to make it equal to the longer side.
5. Verify that the totals on both sides are equal to ensure the book is balanced.
| 2. What is a double column cash book? | |
Ans. A double column cash book is a type of accounting book that records all cash transactions in a business. It has two money columns on each side, one for cash and the other for bank. The cash column records transactions involving physical cash, while the bank column records transactions involving the bank account. This book helps in maintaining a record of cash and bank balances, as well as tracking cash flow in and out of the business.
| 3. What is the purpose of a double column cash book? | |
Ans. The purpose of a double column cash book is to maintain a systematic record of all cash and bank transactions in a business. It helps in tracking the inflow and outflow of cash, as well as maintaining accurate cash and bank balances. The book also provides a clear picture of the business's financial position, allowing for easy identification of any discrepancies or errors in cash handling. It is an essential tool for financial management and helps in making informed decisions regarding cash and bank transactions.
| 4. What is the difference between a single column cash book and a double column cash book? | |
Ans. The main difference between a single column cash book and a double column cash book is the number of money columns. A single column cash book has only one column on each side to record cash transactions, whereas a double column cash book has two columns on each side, one for cash and the other for bank transactions. While a single column cash book is suitable for small businesses with limited cash and bank transactions, a double column cash book is more comprehensive and suitable for businesses with a higher volume of cash and bank transactions.
| 5. What are the advantages of using a double column cash book? | |
Ans. The advantages of using a double column cash book include:
1. Clear separation of cash and bank transactions: The double column cash book allows for a clear separation of cash and bank transactions, making it easier to track and reconcile both types of transactions.
2. Accurate recording of cash and bank balances: By maintaining separate columns for cash and bank transactions, the book provides an accurate record of cash and bank balances, allowing for better financial management.
3. Easy identification of errors or discrepancies: With separate columns for cash and bank transactions, any errors or discrepancies can be easily identified and rectified, ensuring the accuracy of financial records.
4. Efficient cash flow management: The double column cash book helps in tracking cash flow in and out of the business, allowing for efficient cash flow management and better decision-making.
5. Comprehensive financial reporting: The book provides a comprehensive record of cash and bank transactions, enabling the preparation of accurate financial reports and analysis.
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