Where there is only a journal being maintained for the purpose of recording transactions in an organisation, i.e. where there are no subsidiary journals, all transactions are recorded in the journal using journal entries and posted therefrom into the ledger.

In such a scenario, Cash Account and Bank Account imply ledger accounts by the same names.

Some Cash and Bank transactions

June 5th	:	Sold Goods for Cash 50,000
6th	:	Paid into Bank 40,000
7th	:	Paid Ram by cheque 2,880 after discount to clear the due of 3,000
8th	:	Purchased goods for cash 8,000
9th	:	Withdrawn from bank for partners personal use 1,000
10th	:	Received payment from Ghanshyam on account by cheque 12,810. Discount given 190

Journal entries for these transactions

Journal in the books of M/s __ for the period from ____ to _____

Date	Particulars		Amount (Dr)	Amount (Cr)
05/06/	Cash a/c To Sales a/c	Dr	50,000	50,000
	[ Being the amount received on sale of goods vide receipt no:___ dated:__ ]
06/06/	Bank a/c To Cash a/c	Dr	40,000	40,000
	[ Being the amount paid into bank vide counterfoil no:___ dated:__ ]
07/06/	Ram a/c To Bank a/c To Discount Received a/c	Dr	3,000	2,880 120
	[ Being the amount paid to Ram on account receiving a discount thereby by cheque no: ___ dated: ___ ]
08/06/	Purchases a/c To Cash a/c	Dr	8,000	8,000
	[ Being the amount paid towards purchase of goods for cash vide voucher no :___ dated:__ ]
09/06/	Drawings a/c To Bank a/c	Dr	1,000	1,000
	[ Being the amount withdrawn by the partner for personal use from the bank vide cheque no:___ dated:__ ]
10/06/	Bank a/c Discount Allowed a/c To Ghanshyam a/c	Dr	12,810 190	13,000
	[Being the amount received after allowing discount by cheque from Ghanshyam on account vide cheque no:___ dated:__ ]

Ledger Accounts

Cash a/c

Dr Cr
Date	Particulars	Amount	Date	Particulars	Amount
01/06/ 05/06/	To Balance b/d To Sales	12,000 50,000	06/06/ 08/06/ 10/06/	By Bank By Purchases By Balance c/d	40,000 8,000 14,000
	Total	62,000		Total	62,000
11/06	To Balance b/d	14,000

Bank a/c

Dr Cr
Date	Particulars	Amount	Date	Particulars	Amount
01/06/ 06/06/ 10/06/	To Balance b/d To Cash To Ghanshyam	32,000 40,000 12,810	08/06/ 09/06/ 10/06/	By Ram By Drawings By Balance c/d	2,880 1,000 80,930
	Total	84,810		Total	84,810
11/06/	To Balance b/d	80,930

Where subsidiary books are being maintained in the organisation, Cash and Bank transactions are recorded at the same place in a book called "Cash Book". The Cash Book is maintained in a ledger account format. It has got a debit side as well as a credit side. Recording in this book is done in exactly the same manner as posting the journal entry into the ledger.

A Cash Book is a subsidiary book. It has the peculiarity of being both a journal as well as a ledger. If a transaction is entered in the Cash Book, both the recording aspect as well as the posting aspect are complete, i.e. it amounts to writing the journal entry as well as posting into the ledger at the same time.

We know that posting is to be done into two ledger accounts. Writing in the Cash book amounts to completion of posting in the ledger accounts within the cash book i.e. the Cash a/c and Bank a/c. Posting into the other account involved in the transaction has to be done and that cannot be assumed to be complete.

Types of Cash Books

Single Column Cash Book

This is a book where there is only one column by name Cash. This is nothing but a book where Cash a/c is maintained.

Maintaining a single column cash book amounts to eliminating recording the cash transactions in the journal and maintaining only the ledger account (Cash a/c) with regard to cash transactions.

Why not call it a ledger then?

Though in practice while working out problems we prepare the cash book exactly in the same manner as a ledger, it is not so. The narration which we write in a journal entry is also written in the cash book, unlike in the case of a Cash a/c in the ledger where we just write the ledger a/c name.

Cash Book

Dr Cr
Date	Particulars	L/F	Cash	Date	Particulars	L/F	Cash
– 05/06/	To Balance b/d To Sales [Amount received on sale of goods vide receipt no:___ dated:__]	– –	12,000 50,000	08/06/ 09/06/ 10/06/	By Bank [Paid into bank vide counterfoil no:__ dated:__ ] By Purchases [Paid towards purchase of goods for cash vide voucher no :___ dated:__ ] By Balance c/d	– – –	40,000 8,000 14,000
	Total		62,000		Total		62,000
11/06/	To Balance b/d	–	14,000

J/F L/F

There is a column labeled J/F in a ledger which is used for entering the folio (page) number where the journal entry that is basis for the posting has been recorded.

In a cash book that column is replaced by a L/F. The entry is the cash book itself being a journal, there is no separate journal entry that would be the basis for the entry in the cash book. The L/F column is used to enter the folio (page) number within the ledger where the ledger account that is being posted there is located.

Double Column Cash Book

This is a book where both the Cash a/c and the Bank a/c are maintained together in the same book.

The debit and credit sides of the book have two columns each. The debit side columns represent the debit side of Cash a/c and Bank a/c as their labels indicate and the credit side columns represent the credit side of Cash a/c and Bank a/c as their labels indicate.

This is nothing but the Cash and Bank accounts shown side by side together.

The above transactions recorded in a double column cash book

Cash Book

Dr Cr
Date	Particulars	L/F	Cash	Bank	Date	Particulars	L/F	Cash	Bank
01/06/ 05/06/ 06/06/ 10/06/	To Balance b/d To Sales To Cash To Ghanshyam	– – C –	12,000 50,000	32,000 40,000 12,810	06/06/ 08/06/ 08/06/ 09/06/ 10/06/	By Bank By Ram By Purchases By Drawings By Balance c/d	C – – –	40,000   8,000 14,000	2,880   1,000 80,930
	Total		62,000	84,810		Total		62,000	84,810
11/06	To Balance b/d	–	14,000	80,930

Contra Entry - "C" in L/F Column

A contra entry, in case of double/triple column cash book implies an entry relating to a transaction whose second affect is also present in the same book (ledger). It is an indication that the two ledger accounts affected by the transaction are present in the same book.

We come across Contra entries in a cash book when the two accounts affected by the transaction are cash a/c and Bank a/c.

Journal in the books of M/s __ for the period from ____ to _____

Date	V/R No.	Particulars		L/F	Amount (Dr)	Amount (Cr)
06/06/	–	Bank a/c To Cash a/c	Dr	– –	40,000	40,000
		[ Being the amount paid into bank vide counterfoil no:___ dated:__ ]

Triple Column Cash Book

This is a book where details relating to four accounts i.e. Cash a/c, Bank a/c, Discount Received a/c and Discount Allowed a/c are maintained together in the same book.

Cash Book

Dr Cr
Date	Particulars	L/F	D/A	Cash	Bank	Date	Particulars	L/F	D/R	Cash	Bank
01/06/ 05/06/ 06/06/ 10/06/	To Balance b/d To Sales To Cash To Ghanshyam	– – C –	190	12,000 50,000	32,000 40,000 12,810	06/06/ 08/06/ 08/06/ 09/06/ 10/06/	By Bank By Ram By Purchases By Drawings By Balance c/d	C – –   –	120	40,000   8,000 14,000	2,880   1,000 80,930
	Total		190	62,000	84,810		Total		120	62,000	84,810
11/6	To Balance b/d	–		14,000	80,930

Note

Unlike the Cash and Bank columns, the DA (Discount Allowed) column and DR (Discount Received) column are not two sides of the same account.

• D/A column represents the debit column from the Discount Allowed account and
• D/R column represents the credit column from the Discount Received account.

The credit side from the discount allowed account and the debit side from the discount received account do not have any postings and as such ignoring their presence or use would not affect the accuracy of information collected or accounting.

These columns are never to be balanced. Only their totals are drawn and shown in the total cell.

How we record transactions having their effect on the cash and bank accounts would be dependent on whether we are maintaining the cash book or not.

If we are not using the Cash Book (subsidiary book), then a journal entry should be recorded for each transaction and then it should be posted into the relevant ledger accounts affected by the transaction.

If we are using the Cash Book (subsidiary book) then, for each transaction, an entry in the form of a ledger posting (including narration) is entered into the cash book. Since cash book acts as both a journal as well as a ledger, this act would amount to completing recording the transaction in the journal and posting the same to the cash a/c or the bank a/c as the case may be.

What remains is the posting in the second ledger account other than the cash a/c or the bank a/c that is already assumed to have been posted, affected by the transaction. Once that posting is completed, the transaction can be considered to have been recorded and the relevant ledger postings made.

When the transaction involves both the cash a/c and the bank a/c, the second posting would also be done in the "Cash Book" itself marking them as Contra entries with an upper case 'C' in the ledger folio column.

In learning this topic, we will be concerned about the Bank account being maintained in the accounting books of the organisation. The bank account is addressed

• Bank a/c
• Bank Column
• Bank Column of Cash Book
• Cash Book Bank Column

In all these cases we should understand it to be a reference to the Bank a/c in the organisations books.