Cash Book with Triple Column Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

hey guys home card here for simple
snippets in previous tutorial we have
learnt journal now we know that any
business transaction which is routed
through accounts is firstly recorded in
journal in this tutorial we are going to
look subsidiary books and cash book so
here we start in business major
transactions are generally related to
purchase sales and cash hence it would
be convenient to have separate books for
these activities that is their journal
book a book of prime entry is divided
among major activities such divided
books are known as subsidiary books so
for all transactions in journal it would
be difficult to classify the
transactions of purchases sales and cash
and in business it is very much
important to generate reports on
purchases sales cash differently because
these are major transactions of the
business so to cover this the journal
book is divided among various subsidiary
books commonly known as subsidiary books
only it is very important to note that
this subsidiary books are journal only
following as the main subsidiary books
used in the business now in this lecture
cash book we are going to focus so that
I am NOT explaining right now second is
purchase book purchases book is the book
in which all purchases are recorded
purchase written books all purchase
returns are recorded in sales book all
sales are recorded credit sells caches
all sales are recorded in sales book in
sales written books all types of sales
written are recorded bills receivable
books this receivable are recorded in
bills payable book bills people are
recorded and in journal proper remaining
any other transactions which are not
covered by these first seven books are
recorded so here we start with first one
cash book now what is cash book cash
book is a book in which receipts and
payments of money is recorded now there
are three types of cash book - single
column
single-column cash book is a cash book
in which only cash column is there and
receipt and payment of cash is only
recorded in this single column cash book
in double corn cash book generally there
is cash plus discount column so discount
here means discount received and
discount paid booth in triple columnist
cash book cash plus discount plus bank
column is there and in this triple
columnar cash book all the cash receipts
cash payments discount received discount
payments and bank receipts and bank
payments are recorded so if we do an
example on triple columnar cash book we
can solve any example of double column
and single column cash book so let us
take an example of triple columnar cash
book before taking an example we would
first see how cash book look like so
these are the columns in triple columnar
cash book this side is the bed side left
hand side and right hand side is credit
side which is divided by these double
lines marked here with yellow first
column is dead column second is for
particulars third is for laser for you
then discount cash and bank
similarly credit side also have the same
columns here we go date particulars
ledger folio discount here discount is
discount received cash and bank so if
one can solve a question of journal it
is easy to solve question of cash book
because we have already know the three
golden rules of accounting and how
transactions are recorded in journal so
only here we need to deal with the
format of cash book here is one
technique in which we can solve the
question easily now let's remember the
rule for DL account because cash is real
account so real account rule says debit
what comes in credit what goes out so
here in this debit side we are going to
record all the transactions which
increase cash and bank balance and here
in credit we are going to record all
those transactions which reduce cash and
bank balance because credit what goes
out it's so simple so let's start with
an example
the following transactions in a cash
book with three columns that is discount
cash and bank in the books of home car
for the month of June 2017 so first we
would write cash book of Messrs boom car
let me remind you one thing that this
cash book is journal only so if we
record transactions here it is assumed
that transactions are recorded in
journal also so there is no need to
record the transaction in journal in the
way which we have learnt in previous
tutorial now on 1st June cash in hand
rupees 8000 and Bank rupees 10000 we are
going to remember a one golden rule in
this whole example that all cash which
is there with us and increases our cash
and bank balance we are going to write
those in left hand side and all which
reduces we are going to write down in
right hand side we have already
discussed the logic of it
so here we write 2017 on both the sides
June 1st
it is balance as on 1st June so we would
write to balance brought down - is of
8,000 and bank balance is of 10,000 won
2nd June sold goods who Swami and
company rupees 6000 and received a check
of rupees 2000 as park payment so sold
goods to Swami and company of rupees
6000 here the entry would be Swami
account debit - sales account because it
is credit sales and in this entry cash
account is not getting altered so this
transaction of 6000 will not appear in
cash book and this next transaction is
received a check of rupees 2000 as part
payment yes now here the cheque is
received so it would increase our bank
balance by 2000 so we would write it in
the debit of cash book so on June 2nd we
would write to Swami & Company in Bank
column 2000 here another view can be
taken as sold goods - Swami on company
rupees 6000 and received a check of 2000
so one may say that out of this 6000
2000 is part payment so actual credit
Series
of 4,000 so in that case we would record
this 2000 as caches and we would write
here not Swami account but sales account
so both ways are correct you can follow
any one of them but if you follow the
first one then don't forget to write the
assumption that all sales are assumed to
be credit since on 3rd June purchased
goods from Patel rupees 8000 let's trade
discount 2% and paid the amount by issue
of a check here goods are purchased from
Patel and amount is paid by issue of
check so it is cash purchases the amount
would be 8000 minus 2 percent of 8000
and it would reduce our bank balance
because it is issued through check so
any transaction which reduces the bank
balance is written in the right side of
cash book in Bank column so on June 3rd
we would write by purchases an amount
would be 7 8 4 0 1 5th June transferred
rupees 5000 from private banking account
to business bank account here private
banking account is nothing but
proprietors account which is um car in
this case so 5000 is considered to be a
capital which is introduced in a
business so here our journal entry would
be cash account debit to capital account
this is increasing our balance of bank
so in the debit of cash book to capital
account 5000 on 10th June issued a check
for rupees 3000 to furniture mud for the
furniture purchased for the last month
in full settlement of rupees 3200 here
there are two transactions first is
furniture purchased for the last month
so when furniture is purchased it is
purchased on credit we would have passed
the journal entry debit what comes in to
credit the giver that is furniture
account debit to furniture mark account
of rupees 3200 here in this month on
10th June we are issuing check for the
full settlement of 3200 and this check
of 3000 would reduce our bank balance so
we would write this transaction in the
credit of cash book so on
10th of June we would write by Furniture
Mart Furniture Mart this receiver
Furniture Mart account debit to cash
account that is bank account in this
case we are giving 3000 in spite of 3200
so 200 is saved which is discount
received for us in totality the journal
entry of this would be by Furniture Mart
account debit to discount received
account 200 to bank account 3000 next on
12 June withdrew for personal use from
bank rupees 8000 so it is nothing my
drawing and reduces the bank balance so
in credit on 12 June by drawings account
8000
on 14 June you should have checked to
petty cashier for rupees 2000 this is
very important transactions so please
listen to it carefully here check is
issued to petty cashier cash is not
going out of the business anywhere but
petty cashier would receive cash from
bank and bank balance would get reduced
so this transaction of 2000 on 14th June
will appear on the both sides of the
cash book here it is how on 14th we
would first say buy cash account because
petty cashier will receive cash here in
leisure folio reference column we would
write see this is contra and in Bank
column bank balance is getting reduced
we would write 2000 here you can
alternatively debit petty cashier's
account also on 14th of June bank
balance is getting reduced so we would
write here to bank account and in cash
column 2000 is coming into the business
so we would write to thousand in cash
column here again we would write see now
what is this significance of si si
refers to contra entry in laser folio
column the reference of laser is given
but here this laser reference will not
have effect because it is crediting in
one side and having debit effect in
another side so that is why we write C
here in case any transaction having to
effect and appearing on both sides of
cash book on 15th zone withdrew for
office use rupees 4000 so here again the
same entry
be there by cash account cash is coming
into the business debit what comes in
rupees four thousand here we would write
C one 15th of June bank balance is
getting reduced to bank account credit
what goes out C cash is coming in so in
cash column four thousand one sixteenth
of June Swami and company in front that
they paid directly into our bank account
the remaining balance amounting to
rupees four thousand so here our bank
balance would get increased because
there is direct Freeman from Swami and
company so we would record this in debit
of cash book so on 16th to Swami on
company credit the giver in Bank column
four thousand because he is paying
directly into her bank account on
nineteenth Bank collected dividend and
credited to our account rupees one
thousand four hundred here our bank
balance would increase hence in debit of
cash book we would set to dividend
received account
1401 28th of June paid insurance premium
for goods rupees three thousand by
cheque insurance premium is paid by
check
so bank balance would get reduced here
on 20th of June by insurance premium
account three thousand one 20th of June
cash sales eight thousand we are
receiving cash for fills which we have
done on 28 June it would increase our
cash balance so to sales account here in
cash column we would write eight
thousand one 25th of June paid salaries
by cheque rupees 800
salary is expense for us so nominal
account rule says debit all expenses we
are debiting salaries account and the
payment is by cheque so that's why it
will come in the credit side of cash
book rupees 800 last transaction is on
30th of June purchased government
securities rupees nine hundred so here
again investments are real account rule
of real account says debit what comes in
so we are debiting investments and
credit what goes out bank balance is
getting reduced so we would write nine
hundred in the credit side of cash book
so here we have covered all the
transaction now it is time to have
totals in both the sides now while
taking the totals just below this by
line you have to write the totals of all
the columns so here we go twenty two
thousand twenty two thousand four
hundred two hundred zero and twenty nine
thousand five forty now here two hundred
first we would see discount column
against discount column so 200 is higher
we would write two hundred on the both
sides now to balance the ledger we would
write here two hundred so that our
totals will match and this second effect
would directly go to profit and loss
account logic of this entry would be as
per nominal account rule debate all
expenses and losses credit all incomes
and gains so discount ratio days income
for us so we are giving its effect in
profit and loss account it is the
transaction of final accounts so this
concept will get more clear men will
soil example on final accounts next is
cash twenty two thousand twenty two
thousand here the balance will come on
the opposite side because it is closing
balance on 30th June we would write it
as buy balance carrot bond please note
that don't assume that this is in credit
of cash book so it is cash going out it
is just a closing balance which we have
written and closing balance always
appears on the opposite side here let's
close the last column which is Bank
column 29 five forty on both the sides
29 five forty here we can see that
twenty nine five forty we have paid in
all but we were having bank balance of
22 four hundred only
so this difference that is difference of
seven thousand one forty rupees is
nothing but no in which we have taken
which is short-term loan it is known as
bank overdraft so it is to balance
carried down we would write so on July
first here it would appear by a balance
brought down bank overdraft of rupees
seven one four zero and on July first
here cash balance will appear as to
balance brought down in cash column
twenty two thousand so that's all guys
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