How to Make Entries in Cash Book? - 36 Cases

Whatever may be the type of cash book, entries are passed according to the rules of Double entry. Following main points are to be considered while making entries in cash book:

Summary of Transactions to be recorded in Cash Book

No.TransactionCash Dr.Bank Dr.Cash Cr.Bank Cr.
1Started business with cash.      *
2Started business with cash and bank balance.      *     *
3Borrowed loan from State Bank of India.     *
4Borrowed loan from a friend.      *     *
5Purchased machinery for cash.      *
6Purchased machinery on cash basis, paid by cheque.     *
7Purchased goods, 50% payment made by cheque.     *
8Sold goods for cash.      *
9Sold goods, 50% payment received in cash.      *
10Payment of an installment of SBI’s loan.      *     *
11Deposited into Canara bank.(Contra Entry)     *     *
12Withdrew from bank for office use. (Contra Entry)      *     *
13Withdrew from bank for domestic use.     *
14Payment of rent by cheque.     *
15Repayment of friend's loan , by cheque.     *
16Cash received from Mahesh for commission.      *
17Received bank draft.     *
18Collection of cash from debtors after discount.     *
19Payment to creditors after discount.     *   *
20Interest on bank deposit.     *
21Expenses paid in advance (when these are paid).     *    *
22Cheque deposited into bank.     *
23Cheque deposited into bank, dishonoured.     *
24Cheque issued to customer, later dishonoured.     *
25Interest on bank deposit.     *
26Bill receivable discounted with bank.     *
27Bill receivable discounted later dishonoured.     *
28Bank charges.     *
29Cheques received sent to bank on the same day.     *
30Cheques received sent to bank (next day).     *
31Opening Cash balance.     *
32Opening Bank balance.     *
33Bank overdraft (Opening)     *
34Closing cash balance     *
35Closing bank balance     *
36Closing bank Overdraft     *

Note:

Cheque received should be debited to Cheques-in-hand. If this cheque is deposited into bank on the same day, It should be debited to Bank. However, if this cheque is deposited into bank the next day, following journal entry is to be passed:

Bank a/c Dr.

To Cheques-in-hand.

How to Make Entries in Cash Book? - 36 Cases

Petty Cash Book