Double column cash book

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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

  1. It is more convenient as cash and bank accounts are kept side by side at one place.
  2. 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:

double column cash book

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:

  1. The entries without discount are posted in the usual manner. See single column cash book.
  2. 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.
  3. 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.
  4. The total of discount column on the debit side of cash book is posted as debit to the discount allowed account.
  5. The total of discount column on the credit side of cash book is posted as credit to the discount received account.

Example

From the following transactions prepare a two column cash book and post entries therefore to ledger accounts.

Year: 2016
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.

Solution

two column cash book

General ledger

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Accounts receivable ledger

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Accounts payable ledger

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Cash book exercise:

7 thoughts on “Double column cash book”

  1. Itu says:

    i think you guys can be very helpful to me because i can now understand the things i didn’t get quite well. Thank you so much. Hope to come back again and again

    1. hamza jumanne says:

      yes i catch new things

  2. Salaudeen Oluwaseun says:

    started business with 2,500 in the bank and 500 cash… My friends and I argued about the side that is giving and the side that is receiving… I will need you to shed more light on this, I argued that capital is receiving and they said it is giving out.. If it giving why do we record it on the Dr side of the cash book and not on the credit side

    1. salam muhideen says:

      because,the money was in your ,you hav not started the business ,,,that is why ….

  3. Jennifer B Miranda says:

    Started business with cash and furniture for 20000 and 50000 respectively . How to post them to double column cash book.

    1. salam muhideen says:

      you will post them in debit side,the 20000 will be post in cash side while the 50000 will in bank side….

  4. MANGENI Wilber says:

    I started a business with cash balance of 50000 on debt side and bank balance of 10000 on credit side , so how do I record this one

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