Double column cash book or two column cash book consists of two columns of amount on each side to record Cash and Bank Transactions. Rather than keeping cash acoount and bank account apart from each other, double column cash book enables us to keep these two accounts side by side. Thus, it is more convenient to record transactions and we can quickly see how much cash and bank balance we have to altogether.
In other words, by simply adding a bank column to both sides of a single column cash book we can make it a double column or two column cash book.
Advantages of double column or two column cash book
Double Column cash book columns have the following advantages in addition to those of single cash column book
- It is more convenient as cash and bank accounts are kept side by side at one place.
- It is cost and time effective as no separate bank account is required to be maintained.
Format of double column cash book
The following format of double/two column cash book is commonly used by organizations to account for their cash transactions:
Notice that the format of double column cash book is similar to a single column cash book with the exception of an additional column on both sides to record cash discount.
Posting the double column cash book
The following procedure is adopted for posting entries from double column cash book to ledger accounts:
- The entries without discount are posted in the usual manner. See single column cash book.
- The items with discount appearing on the debit side will be posted to the credit of the respective account with the total amount i.e., the actual cash paid and also the discount received.
- The items with discount appearing on the credit side are posted to the debit of the respective accounts with the total amount i.e., the actual cash paid and also the discount received.
- The total of discount column on the debit side of cash book is posted as debit to the discount allowed account.
- The total of discount column on the credit side of cash book is posted as credit to the discount received account.
From the following transactions prepare a two column cash book and post entries therefore to ledger accounts.
Jan. 01: Opening balance of cash $4,500.
Jan. 03: Received cash from R & Co. $3,880 and allowed them a discount of $20.
Jan. 05: Paid cash to H & Co. $3,590 and received a discount of $10.
Jan. 07: Merchandise purchased for cash $940.
Jan. 09: Received interest on investment $365.
Jan. 12: Purchased machinery for cash $4,100.
Jan. 15: Cash sales for the first half of the month $6,500.
Jan. 17: Paid cash for stationary $635.
Jan. 20: Paid for office furniture $710.
Jan. 21: Paid to H & Co. $970 and received a cash discount of $30.
Jan. 28: Cash received from R & Co. $670 and allowed them a discount of $30.
Jan. 31: Cash sales for the second half of the month $7,600.
Jan. 31: Paid for salaries $1,250.