CASH

BOOK/PETTY
CASH BOOK
MCQS
MATCH THE COLUMN
BOOKS OF ORIGINAL ENTRY/SPECIAL
PURPOSE BOOKS
• Subsidiary books recording business transaction are known as special
purpose books. Business transactions can be large in number making it
difficult to record all in a single journal. Hence sub-dividing journals make
recording of transactions quick, accurate and efficient. Some examples are
cash book, purchases book, and sales book.
Subsidiary Books
Transactions Further classification
Maintained
Only Cash Simple Cash Book
Cash & Bank Related
Cash & Bank Transactions Double Column Cash book
Transactions
Cash payment of small Petty Cash Book
amount
Credit Sale Sales Book
Credit Purchases Purchases Book
Transaction Other than Cash Sales Returns/ Returns Inward Sales returns Book
&
Purchases Returns /Returns
Bank Purchases Returns Book
outward
Any other transaction Journal Proper
ADVANTAGES OF MAINTAINING
SUBSIDIARY BOOKS

• Division of work
• Leads to Specialization
• Easy to maintain Ledger
• Check on frauds
• Easy to fix responsibility
• Quick availability of required information
CASH BOOK :

• Cash book shows all the transactions related to cash receipts and
payments.
• Cash Book serves two purposes.
• First, all the cash transactions are recorded first time in cash book it
becomes BOOK OF ORIGINAL ENTRY.
• Second, there is no need to prepare Cash a/c in ledger it also play the role
of Principal Book.
• SIMPLE CASH BOOK :
• All the cash receipts are shown in left hand side i.e. Debit side and all the
cash payments are shown in right hand side i.e. Credit side.
• Points to Remember :
• Cash in hand/opening balance of cash is shown in Dr. side of the Cash book
as “to Bal b/d”. Only transactions of cash receipts and payments are
recorded in this book. This book never show a credit balance because one
can’t pay more than the cash one have.
• In a Simple Cash Book only cash receipts and cash payments are recorded.
Credit transactions are not recorded.
• The debit side is always bigger than the credit side since the payments can
never exceed the available cash.
• It is like an ordinary account.
• CASH BOOK WITH BANK COLUMN :
• A two column cash book enables the management to know the cash and
bank balance instantly. In this book, amount column is divided into Cash
and Bank columns.
• Points to Remember :
• Bank column can show a credit balance as banks give overdraft facility to
its reputed customers. If there is an overdraft or credit bank balance “By Bal
b/d”
Date
will be shown in bank
Pariculars
column
LF Cas
h
Ban
k
inDate
credit side.
Particulars LF Cas
h
Ban
k

1/4 To balb/d xx 1/4 By bal b/d xx

x x

• If bank balance increases, the bank column is debited and if decreases bank
column is credited.
 FORMAT

Dr. Cash Book Cr.

Date Particulars [Link] Bank Date Particulars L.F. Cash Bank

.
₹ ₹ ₹ ₹
To Cash (C XXX By Bank (C) XXX
)
 IMPORTANT ENTRIES
• Contra Entries : These entries affect cash and bank columns both at the same
time. To indicate contra entry “C” is mentioned in the L.F. column of the cash
Book.
• Entries relating to cheques :
• When any payment is made by cheque : It will reduce the bank balance and
thus bank column will be credited.
• When any payment is received in the form of cheque and no information about
its deposit into bank is given. In this case it is assumed that the cheque is
deposited into bank on the same day, when it is received & so bank A/c will be
debited.
• When payment is receive in the form of cheque on one day & its is deposited
into Bank on other day i.e. when two dates, one for the receipt of cheque and
the other for deposit. In this case no entry it to be recorded at the time of
receiving the cheque. Entry is to made when cheque deposited in the bank, as
bank column is debited.
Prepare Two Column Cash Book from the following transactions and balance the book on 31st
Jan., 2014:-

2014
Jan. 1 Cash in hand ₹ 50,000; Bank overdraft ₹ 1,90,000.
Jan. 2 Purchased goods from Rajesh Kumar of the list price of ₹ 50,000
at 5% trade discount and payment made by cheque.

Jan. 6 Goods sold for ₹ 80,000 and payment received by cheque.

Cheque deposited into Bank on same day.
Jan. 10 Goods purchased for cash ₹ 19,800.
Jan. 15
Furniture sold for ₹ 1,77,000 and payment received by cheque &
cheque deposited into Bank on same day.

Jan. 18 Salaries paid ₹ 4,500.

Jan. 21 Settled the amount due to Ram ₹ 2,000 by paying cash ₹ 1,910.
Jan. 22 Cash received from Jai ₹ 14,780 in full settlement of his account
of ₹ 15,000.
Jan. 23
Paid Life Insurance premium ₹ 1,500.
Jan. 31 Deposited with bank the entire balance after retaining ₹ 7,000
cash in hand.
DOUBLE COLUMN CASH BOOK
Date Particulars L Cash BanK Date Particulars L Cash BanK
F F
2014 2014
1 jan To Bal b/d 5000 1 jan By bal b/d 190000
0
6 jan To sales A/c 80000 2 Jan By Purchase A/c 47500
15 To Furniture A/c 17700 10jan By Purchase A/c 1980
Jan 0 0
22Ja To Jai A/c 1478 18 By Salaries A/c 4500
n 0 jan
31Ja To bank A/c c 37070 21 By Ram A/c 1910
n Jan
23 By Drawing A/c 1500
Jan
31Jan By Cash A/c c 3707
0
31Jan By bal c/d 7000 151570
6478 29407 6478 29407
Enter the following transactions in the Cash Book with Cash and Bank Columns:−

2016 (₹)
June 1 Cash in hand 800

Bank Overdraft 5,70

0
7 Received a cheque from Bharti 3,25
0
9 Deposited the above cheque into bank
12 Paid to Bhavana by cheque 2,42
5
15 Bharti's cheque returned dishonoured
20 Withdrew from Bank for office use 250

25 Cheque received from Panna Lal and endorsed it in 1,20

favour of Kamal on 28th June 0

30 Income Tax paid by cheque 150

30 Bank charges 25
• 7 June Cheque in hand A/c
• To Bharati A/c Bank A/c
• To Bharati A/c

• 9th June Bank A/c Dr

• To Cheque In hand
 Cash Book
Dr. Cr.

L
Cas
. Cash (Rs Bank (R L. Bank
Date Particulars Date Particulars h (R
F ) s) F. (Rs)
s)
.

2016 2016
June 01 To Balance b/d 800 June 01 By Balance b/d 5,700
June 15 To Bharti 3,250 June 12 By Bhavana 2,425
June 20 To Bank A/c C 250
June 30 Balance c/d 8,550 June 20 By Cash A/c C 250
June 30 Drawings A/c 150
June 30 Bank Charges A/c 25

June 30 Balance c/d 1,05

0

1,050 11,800 1,05 11,80

0 0

July 01 Balance b/d 1,050 July 01 Balance b/d 8,550

Enter the following particulars in the Cash Book with Cash and Bank columns:−

2016
April 1 Balance of cash in hand ₹ 2,000 and at Bank ₹ 12,000.

3 Received cash from Madhav ₹ 1,800.

5 Cash Sales ₹ 1,000
6 Purchases by cheque ₹ 745.
9 Paid into Bank ₹ 1,850.
10 Paid cash for freight ₹ 54.
12 Drew from Bank for office use ₹ 600.
13 Issued a cheque in favour of M/s Arun & Sons for ₹ 985.
16 Paid into Bank ₹ 715.
17 Drew Cash for his son's birthday party ₹ 175.
19 Received a cheque from Navin for ₹ 380 and deposited it into bank on the
same day.
20 Cash Sales ₹ 200.
25 Drew from Bank for office use ₹ 200.
26 Purchased furniture for ₹ 1,000 and payment made by cheque.
27 Navin's cheque dishonoured, Bank charges ₹ 5.
29 Purchased business premises, payment made by cheque ₹ 12,000.
30 Received cheque for ₹ 675 from Harish.
T R A N S A C T I O N D AT E D A P R I L 3 0 , 2 0 1 6 , D O E S N O T C O N TA I N A N Y I N F O R M AT I O N R E G A R D I N G D AT E O F
D E P O S I T I N G T H E C H E Q U E , S O I T H A S B E E N A S S U M E D T H AT T H E C H E Q U E H A S B E E N D E P O S I T E D O N T H E
S A M E D A Y.

Cash Book
Dr. Cr.
Cas
Cash Bank Bank (Rs
Date Particulars L.F. Date Particulars L.F. h (
(Rs) (Rs) )
Rs)
2016 2016
Apr. 01 Balance b/d 2,000 12,000 Apr. 06 Purchases A/c 745
1,800 Bank A/c C 1,8
Apr. 03 Madhav Apr. 09
50
Apr. 05 Sales A/c 1,000 Apr. 10 Freight A/c 54
Apr. 09 Cash A/c C 1,850 Apr. 12 Cash A/c C 600
Apr. 12 Bank A/c C 600 Apr. 13 M/s Arun & Sons 985
Apr. 16 Cash A/c C 715 Apr. 16 Bank A/c C 715
Apr. 19 Navin 380 Apr. 17 Drawings A/c 175
Apr. 20 Sales A/c 200 Apr. 25 Cash A/c C 200
Apr. 25 Bank A/c C 200 Apr. 26 Furniture A/c 1,000
Apr. 30 Harish 675 Apr. 27 Navin (380 + 5) 385
Apr. 30 Balance c/d 295 Apr. 29 Business Premises A/c 12,000
Balance c/d 3,0
Apr. 30
06
5,80 15,91 5,8
15,915
0 5 00
May 01 Balance b/d 3,006 May 01 Balance b/d 295
Enter the following transactions in the Cash Book with Cash and Bank Columns ∶−

2017
April 1 Balance of Cash in hand ₹400, overdraft at Bank ₹5,000.
4 Invested further capital ₹10,000 out of which ₹6,000 deposited into the
bank.
5 Sold goods for cash ₹3,000.
6 Received from Ghanshyam ₹8,000; discount allowed to him ₹200.
10 Purchased goods for Cash ₹5,500.
11 Paid to Ram Vilas, our creditor ₹2,500; discount allowed by him ₹65.
13 Commission paid to our agent ₹530.
14 Office furniture purchased from Keshav in cash ₹200.
14 Rent paid ₹50.
14 Electricity charges paid ₹10.
16 Drew cheque for personal use ₹850.
17 Cash sales ₹2,500.
18 Collection from Atul ₹4,000, deposited in the bank on 19th April.
19 Drew from the bank for office use ₹500.
24 Dividend received by cheque ₹50, deposited in the bank on the same
day.
25 Commission received by cheque ₹230, deposited in the bank on 28th
April.
29 Drew from the bank for salary of the office staff ₹1,500.
29 Paid salary of the manager by cheque ₹500.
30 Deposited cash in the bank ₹1,000
 Cash Book
Dr. Cr.
Cash Bank (Rs Cash Bank (R
Date Particulars L.F. Date Particulars L.F.
(Rs) ) (Rs) s)
2017 2017
Apr. 01 Balance b/d 400 Apr. 01 Balance b/d 5,000
Apr. 04 Capital A/c 4,000 6,000 Apr. 10 Purchases A/c 5,500
Apr. 05 Sales A/c 3,000 Apr. 11 Ram Vilas 2,500
Apr. 10 Ghanshyam 8,000 Apr. 13 Commission A/c 530
Apr. 17 Sales A/c 2,500 Apr. 14 Furniture A/c 200
Apr. 18 Atul 4,000 Apr. 14 Rent A/c 50
Apr. 19 Cash A/c C 4,000 Apr. 14 Electricity Charges A/c 10
Apr. 19 Bank A/c C 500 Apr. 16 Drawings A/c 850
Apr. 24 Dividend A/c 50 Apr. 19 Bank A/c C 4,000
Apr. 28 Cheques- in-Hand 230 Apr. 19 Cash A/c C 500
Apr. 30 Cash A/c C 1,000 Apr. 29 Salary A/c 1,500
Apr. 29 Salary to Manager 500
Apr. 30 Bank A/c C 1,000
Apr. 30 Balance c/d 8,610 2,930
22,40 22,40
11,280 11,280
0 0
May 01 Balance b/d 8,610 2,930
Prepare a Two Column Cash Book :−
HOME WORK

Enter the following transactions in a Two Column Cash Book :−

(i) Commenced business with cash ₹50,000
(ii) Deposited in Bank 40,000
(iii) Received c ash from Mohan ₹950 in full settlement of a debt of ₹1,000
(iv) Bought goods for cash ₹10,000
(v) Bought goods by cheque ₹15,000
(vi) Sold goods for cheque for ₹20,000 and deposited in Bank on the same
day
(vii) Paid to Arun by cheque ₹1,900 in full settlement of his account of ₹2,000
(viii) Drew from Bank for office use ₹1,000
• Ans Cash bal 1950/bank bal 42100
Enter the following transactions in the Two Column Cash Book of Mr. Mohan:-

2018 ₹

Jan. 1 Cash in Hand 2,200

Cash at Bank 50,000

3 Purchased goods for ₹ 75,000; Trade Discount 20%; CGST 6%, SGST 6%; Payment
made by Cheque

4 Sold goods for ₹ 40,000; Trade Discount 15%; IGST 12%; Payment received by
Cheque
5 Received a cheque from Naresh 1,000
8
Cheque received from Naresh endorsed to Suresh in full settlement of his account
of ₹ 1,050
10 Paid Life Insurance premium of Mr. Mohan 100
13
Received a cheque from Pawan in full settlement of his account of ₹ 750. 700
16 Pawan's cheque returned dishonoured by bank –
20 Deposited into Bank, balance of Cash in excess of ₹ 250

Answer Cash Bal Bank bal 22,730

250
Prepare a Two Column Cash Book :−HW

2013 (₹)
Jan. Cash in hand 5,000
1.
Bank Overdraft 1,000
2. Paid Wages 1,500
3. Deposited into Bank 2,000

4. Cash sales 7,500

5. Sold goods for cheque whcih was deposited in bank on the same day 5,000
6. Purchased goods from Hari on credit 4,000
7. Drew from Bank for personal use 1,000
8. Paid to Hari in full settlement 3,500
9. Received from Ram,who owes ₹5,000, ₹2,000 only on account.

Answer Cash bal Bank bal 5,000

7,500
 Prepare a Two Column Cash Book from the following transactions ∶−

2016
May 1 Cash at office ₹ 72.

Bank overdraft ₹ 1,250.

4 Received from Prem Chand a cheque for ₹ 1,875 in full settlement of his account
of ₹ 1,900. The cheque was banked on the same day.
5 Bought goods and paid by cheque ₹ 500.
6 Narinder settled his account of ₹ 700 by a cheque. This was banked on the same
day.
9 Paid to Manohar Lal by a cheque for ₹ 420. Discount received ₹ 80.

12 Cash sales to date ₹ 400 of which ₹ 300 were banked.

17 Sold old typewriter for cash ₹ 320.
20 Received a cheque for ₹ 400 from Naresh in full settlement of his account of ₹
460. The cheque is endorsed to Suresh on 24th May in full settlement of his
account of ₹ 420.
25 Received a cheque from Hari Prakash for ₹ 150. The cheque is endorsed to Raj
Prakash on 27th May; Discount received ₹ 30.
28 Withdrew from Bank for office use ₹ 100 and for personal use ₹ 100.

29 WIthdrew (from office) for payment of private bills ₹ 425.

30 Paid by cheque salaries ₹ 160 and rent ₹ 100.
31 Bank charges as per Pass Book ₹ 5.

Answer Cash Bal 167 Bank Bal 240

PETTY CASH BOOK

• Business has to incur small expenses which are

repetitive in nature. To save the time and
efforts of head cashier, business appoints a
petty cashier. He is entrusted with the duty of
paying these expenses.
ADVANTAGE OF PETTY
CASH BOOK
• Saving of time and efforts of Head cashier
• Control on Petty expenses.
• Less chances of fraud
 ANALYTICAL PETTY CASH
BOOK
Petty Cash Book

Amount Date Particulars Vouche Amoun Postag Statione Conveyan Telephone Miscella
Receive To Cash r No. t Paid₹ e ry ce and Telegr neous
d By Stationery 500 am
5000 By Conveyance 200 500
200
IMPREST SYSTEM OF PETTY CASH
BOOK

• Under this system, Head cashier gives a fixed amount

to petty cashier for a definite period. At the end of
given period, Head cashier reimburses the amount
actually spent by the petty cashier resulting the same
amount with petty cashier which he had in the
beginning of the period
IMPREST SYSTEM
Conveyance
Printing & Stationery
Postage
Wages
Cartage
[Link]
 Prepare a Petty Cash Book on the Imprest System from the following:

2017
April 1 Received ₹ 10,000 for Petty Cash.
3 Paid Cartage ₹ 800.
4 Paid Bus Fare ₹ 400; Speed Post ₹ 200.

6 Paid for Stationery ₹ 700.

7 Paid for Courier Services ₹ 300.
9 Paid for Taxi fare ₹ 800; Wages ₹ 300.

10 Paid for Wages ₹ 400; Charity ₹ 500

11 Paid for Newspaper bill ₹ 600.

12 Paid for soap ₹ 320; Speed post charges ₹
300.
13 Paid for Postage ₹ 780.
14 Paid for Repairs of Chairs ₹ 500.
15 Paid for Refreshment to customers ₹ 900.
Amount Date V. No. Particulars Total Conveya Printing & Posta Wages Cartage Misc.
Rec₹ 2017 Payment nce Stationery ge Exp.
April ₹
10,000 1 To Cash A/c
3 By Cartage A/c 800 800
4 By Bus Fare A/c 400 400
4 By Postage A/c 200 200
6 By Stationery A/c 700 700
7 By Courier Services 300 300
A/c
9 By Taxi Fare A/c 800 800
9 By Wages A/c 300 300
10 By Wages A/c 400 400
10 By Charity A/c 500 500
11 By News Paper A/c 600 600
12 By Misc Exp A/c 320 320
12 By Postage A/c 300 300
13 By Postage A/c 780 780
14 By Repairs A/c 500 500
15 By Refreshment A/c 900 900
7,800 1,200 700 1,580 700 800 2,820
15 By Balance c/d 2,200
10,000 Total 10,000
2,200 16 To Balance b/d
7,800 16 To Cash A/c
Record the following transactions in a Petty Cash Book with suitable columns. The book is kept on imprest
system, amount of imprest being ₹ 4,000.

2017
April 1 Petty cash in hand ₹ 540, Received cash to
make-up the imprest.

Paid for office cleaning ₹ 100.

April 4 Paid railway fare ₹ 320, bus fare ₹ 280, wages
₹ 150.
April 5 Bought shorthand notebooks for office ₹ 370.

April 7 Paid carriage on parcels ₹ 150, paid for wages

₹ 220.
April 10 Bought stamps for ₹ 300, envelopes for ₹ 450
and an accounts register for ₹ 400.

April 12 Paid for repairs ₹ 200, gave tips to office peon

₹ 150.
April 13 Gave charity ₹ 100, served tea to customers ₹
250.
April 15 Paid for wages ₹ 160, rewards to servant ₹
100.
 Petty Cash Book
Amount Date V. Particulars Total Travelling/ Printing & Postage Enterta Repair Misc.
Rec ₹ 2017 No. Payme Conveyan Stationery inment Exp.
Sept nt ₹ ce
1349 7 To balance b/d
3651 7 To Cash
7 By postage 123 123
7 By stationery 321 321
7 By Entertainment 54 54
8 By Travelling/convey 126 126
8 By misc Exp 11 11
8 By Entertainment 72 72
9 By repairs 1567 1567
10 By postage 174 174
10 By Entertainment 127 127
10 By travelling 673 673
11 By stationery 41 41
11 By Entertainment 12 12
12 By Misc Exp 201 201
12 By Travelling 51 51
12 By Postage 483 483
12 By Repairs 30 30
4066 850 362 780 265 1597 212
12 By Bal C/d 934
5000 Total 5000
934 13 To Bal b/d
Record the following transactions in a Petty Cash Book drawn with suitable columns and then balance the
same: HW

2017 (₹)
Jan. 1 Petty cashier is given a monthly
imprest amount of ₹ 10,000. He
spent last month ₹ 9,200 and got
the balance from the head
cashier today.
Jan. 2 Paid for Wages 600
Jan. 3 Paid for sundry expenses 100
Jan. 5 Paid for stationery 700
Jan. 9 Paid for courier charges 200
Jan.12 Stamps purchased 750
Jan.14 Paid wages to casual labour 500
Jan.16 Stationery purchased 400
Jan.19 Paid for general expenses 610
Jan.20 Paid for cartage 800
Jan.22 Paid for advertising 900
Jan.24 Paid for postage 400
Jan.25 Paid for Taxi Fare 840
Jan.27 Paid for entertainment 600
Jan.29 Paid for carriage 500
Jan.31 Paid for petty repairs 700
Enter the following transactions in a petty cash book in analytical form. The book is kept on imprest
system, amount of imprest being ₹ 5,000. HW

2016
April 3 Petty Cash in hand ₹ 420.
Received cash to make-up the
imprest.
Bought stamps for ₹ 300.
April 5 Paid for office cleaning ₹ 200 and
repairs to furniture ₹ 250.
April 7 Paid bus fare ₹ 440, railway fare
₹ 330, wages ₹ 200.
April 8 Paid for charity ₹ 350
April 9 Bought shorthand note book for
office ₹ 250, Carriage on parcels
₹ 280.
April 10 Bought envelopes ₹ 450, served
refreshments to customers ₹ 150.

April 12 Paid for conveyance ₹ 300.

Wages ₹ 200. Stapler pins ₹ 280.

April 15 Gave tips to office peon ₹ 250.

 PREPARE TWO COLUMN CASH BOOK FROM THE
FOLLOWING TRANS ACTIONS: TEST MIN 15 MARKS 6
March
2018
1 Cash in hand Rs 15000, Cash At bank Rs 50000
3 Received cheque from Dolly Rs 2000 and allowed her discount Rs 75
Cheque In Hand
To Dolly
4 Bank Charges for Month Rs 100
5 Cheque received from Dolly Deposited into Bank
Bank A/c
To Cheque In Hand
7 Sold goods to Ashok Rs 2000 , allowed cash discount of Rs 200 and
Cash Received Immediately.
15 Cheque received from Dolly Got Dishonoured
20 Withdrawn from Bank Rs 5000
23 Received Cheque for Rs 500 From Mukesh , which was endorsed to
Nitin
28 Interest Debited by bank Rs 300
31 Deposited with bank the entire balance after retaining Rs 2000 at
 Double Column Cash Book
Dr. Cr.
Cash Bank L.F Cash Bank
Date Particulars L.F. (₹) Date Particulars (₹)
(₹) . (₹)
2018
March 1 To bal B/d (1/2) 15000 50000 By bank Charges 100
March 4 A/c (1/2)

To Cheque in 2000 March By Dolly A/c (1/2) 2000

March 5
hand A/c(1/2) 18
1800 March By cash A/c(1/2) C 5000
March 7 To Sales A/c (1/2)
20
C 5000 March By Interest A/c(1/2) 300
March 20 To bank A/c(1/2)
28
C 19800 March By Bank A/c (1/2) C 19800
March 31 To Cash A/c(1/2)
31
March By Bal C/d (1) 2000 64400
31

21800 71800 21800 71800

April 1 To Bal b/d 2000 64400
SPECIAL PURPOSE SUBSIDIARY
BOOKS

• Purchases Book
• In this book, only those transactions are recorded which are related to credit
purchases of goods in which the business deals in. Recording is made on
the basis of Bills/ Invoices issued by the Suppliers.

• Transactions not recorded in purchases Book

• Purchases of goods for cash.
• Purchases of Assets meant for long term, not for resale
• Sales Books/Sales Journal
• In this book, transactions for credit sales of goods are recorded. The source
documents for this book is duplicate copy of invoice/bills issued to the
customers.

• Transactions not recorded in Sales Book

• Sales of goods for cash.
• Sales of Assets.
• Purchases Returns/Returns Outward Book
• This book includes only those transactions which are related to returns
of goods bought on credit. The goods may be returned due to various
reasons such as goods bought being defective, supply of inferior
quality goods etc. Entries in this book are made on the basis of Debit
Note. A Debit note contains the name of the supplier to whom good
are returned, details of goods returned.

• Sales Returns Book

• This book includes all the returns by customers of credit sales of
goods. The Credit Note is used for recording entries in this book. The
credit note contains the details of customers and goods returned