Cash Book – Single Column/Double Column Cash Book 


Welcome to class! 

In today’s class, we will be talking about the cash book. Enjoy the class!

The Cash Book

cash book

By the end of the lesson, you should be able to;

  • Define cash book
  • Identify the format of a double column cash book
  • Explain contra entries
  • Prepare double column cash book

Meaning of Cash Book

The Cash Book is a subsidiary book of account that is used to record the payments and receipts of money (cash or cheques) to or by a business organisation. The cash book is part of the double-entry system. It, therefore, functions both as a ledger and a subsidiary book of account

Types of cash book

  1. Single Column Cash Book
  2. Two Column Cash Book (or Double Column Cash Book)
  3. Three Column Cash Book
  4. Petty Cash Book
  • Single Column Cash Book:

This is the simplest form of Cash Book operated by a business and it is used to record all cash transactions. The cash transactions recorded in the cash book can be for cash sales, cash purchases, payment of cash to suppliers, receipt of cash from customers, acquisition of properties (fixed assets) by cash and all other transactions that involved the receipt and payment of cash.


Prepare a Cash Book from the following information for March 2017                                                                                                     March                                                                                                                     N

1            Balance of cash in hand                                                                         14, 130

2            Received Cash from Adesola a credit customer                                     3, 600

4            Paid rent for the month                                                                          1, 750

5            Paid cash to Lawal, a supplier                                                                 3, 200

9            Cash Sales                                                                                              22, 110

10         Cash Purchases                                                                                      15, 235

12         Cash received from D. Bright as a loan                                                  10, 000

18         Paid Ayodele a supplier on account                                                         6, 250

19         Received cash from Bonik Ventures, a customer                                   14, 000

22         Credit sales to Owoyemi                                                                        42, 000

24         Purchases on credit from F. Lawal                                                         18, 550

26         Paid wages to shop clerk                                                                        4, 500

28         Paid electricity bills                                                                                1, 200

30        Paid carriage on purchases                                                                    2, 500


Cash Book:

Date               Narration             Folio     Amount            Date               Narration      Folio   Amount

2017                                                                  N               2017                                                   N

Mar 1             Balance                    b/d      14, 130            Mar 4             Rent                             1, 750

Mar 2             Adesola                            3, 600           Mar 5             F.Lawal                              3, 200

Mar 9             Sales                                    22, 110            Mar 10           Purchases                   15, 235

Mar 12           D. Bright – Loan                  10, 000            Mar 18           Ayodele                        6, 250

Mar 19           Bonik Ventures                    14, 000            Mar 26           Wages                          4, 500

Mar 28           Electricity                              1, 200

Mar 30           Carriage Inwards                  2, 500

Mar 31           Balance                 c/d        29, 205

.                                                  63,840                                                                       63, 840

Note: The credit sale of March 22 and credit purchases of March 24 are not posted to the cash book because they do not involve the movement of cash. The two transactions can only be posted in the Sales Journal and the Purchases Journal respectively. Students should watch out for transactions like these during examinations.

  • Two Column Cash Book:

As a business grows, the owner will realize the need to open a bank account where the business money can be kept. The business will, therefore, prepare a two-column (or double column) Cash Book to record the movements of money. The Cash Account and the Bank Account will appear side-by-side in the Cash Book.

The rules of double-entry bookkeeping are still applied. Any money received is debited in the Cash Book. If the money is placed in the cash till, it will be entered in the cash column and if it is paid into the bank or received as cheque, it will be entered in the bank column.

Any money paid out is credited in the Cash Book. If the money is paid in cash it will be entered in the cash column and if it is paid by cheque, it will be entered in the bank column.

The Cash Account and the Bank Accounts must be balanced separately at an appropriate interval to determine the Cash in Hand and the Cash at Bank.

  • Contra Entries:

Sometimes surplus cash is paid into the bank, or money may be withdrawn from the bank to the office. Such transactions are known contra entries because they appear on both sides of the Cash Book.

A contra entry occurs when the double-entry records of a transaction occur in the same ledger.

  • To record cash removed from the office and paid into the bank:

Debit Bank Account

Credit Cash Account

  • To record cash withdrawn from the bank for office use:

Debit Cash Account

Credit Bank Account

In each case, the letter “c” is usually entered in the folio column of the cash book to indicate that the double-entry is on the opposite side of the same book.


  1. List four features of the Cash Book
  2. Explain using a suitable example the meaning of the term – Contra Entries
  • Illustration:

The following information has been extracted from the books of C.Bintu for January 2015

Jan 1  Balance brought forward from last month:

                    Cash in hand N9, 000

                    Cash at Bank N6, 800

Jan 2           Paid rent by cash N2, 500

Jan 4           Cash sales N7, 400

Jan 7            Cash paid into the bank N10, 000

Jan 8            Bought office furniture, paying by cheque N7, 000

Jan 9              We paid C. Asafo by cheque N1, 200

Jan 15           Cash drawings by proprietor N1, 000

Jan 20           J.Oloye paid us by cheque N4, 000

Jan 21           Cash sales paid directly into the bank N8, 500

Jan 25           Sold goods for cash N15, 000

Jan 27           Withdrew N5,000 from the bank for business use

Jan 29           Paid wages in cash N14, 000

Jan 30           Paid motor expenses by cheque N3, 000

Jan 31           We banked all the cash in our possession except for N2, 000 in the cash till

You are required to prepare the Cash Book of the trader for January 2015


Cash Book:

Date        Narration      Folio    Cash           Bank              Date           Narration                  Folio        Cash       Bank

2015                                             N                 N                  2015                                                                 N            N

Jan 1        Balance            b/f       9,000          6,800             Jan 2               Rent                                         2,500

Jan 4        Sales                            7,400                                Jan 7              Bank                           c            10,000

Jan 7       Cash                 c         10,000                                Jan 8             Office furniture                          7,000

Jan 20     J.Oloye                          4,000                                Jan 9             C.Asafo                                                     1,200

Jan 21     Sales                             8,500                                Jan 15           Drawings                                    1,000

Jan 25     Sales                           15,000                                Jan 27           Cash                            c                5,000

Jan 27     Bank                c            5,000                               Jan 29           Wages                                         14,000

Jan 31     Cash                c            6,900                               Jan 30           Motor Expenses                            3,000

Jan 31     Bank               c              6,900

Balance                        c/d            2,000        20,000

.                                                    36,400      36,200                                                                                     36,400        36,200

The balance on the cash column will always be brought down as a debit balance at the start of the next month. The only exception to this is when there is no cash left in the cash account in which case the balance will be nil.

It is not possible to have a credit balance on a Cash Account.

The bank may, however, allow the business to have a bank overdraft. This means that the bank allows the business to pay out more from its bank account than the money they have deposited with the bank. The bank will charge interest on the amount overdrawn.

In the Cash Book, the bank account (i.e. bank column) is balanced in the usual way and the balance will be brought down on the credit side. This represents the amount the business owes the bank and is a liability.


  1. Business Accounting 1 Exercise 12.1 and 12.2
  2. Simplified and Amplified Financial Accounting Exercise 5x and 6 Page 67

Reading assignment

  1. Simplified and Amplified Financial Accounting Page 59 – 71
  2. Business Accounting 1 Page 90 – 96
General evaluation
  1. Explain the principle of the double-entry system
  2. List eight users of accounting information
  3. List eight books of account that are used to keep accounting records
  4. State four differences between book-keeping and accounting
  5. Explain the term ‘contra entries’

Weekend assignment

  1. Which of the following subsidiary books involves cash movement Sales Day Book     B. Purchases Day Book     C. Returns Inwards Book     D. Cash Book
  2. Which of the following books of original entry also serves as a ledger A. Purchases Day Book Cash Book     C. The Journal    D. Sales Day Book
  3. The lodgement of business cash into the business bank account is an example of bank reconciliation     B. self-balancing ledger    C. contra entry    D. reversal entry
  4. Nwoye buys goods and pays by cheque. The entries in the books of Nwoye is debit Purchases; Credit Cheque    B. Purchases; Credit Bank     C. Bank; Credit Purchases    D. Cheques; Credit Purchases
  5. A debit entry in the Cash Account and a corresponding credit entry in Aliu’s Account indicate a sales of goods to Aliu for cash     B. purchase of goods from Aliu for cash    C. receipt of cash from Aliu    D. payment of cash to Aliu


  1. List three source documents that are used in preparing the Cash Book
  2. Explain the term ‘Bank Overdraft’


In our next class, we will be talking more about Discounts.  We hope you enjoyed the class.

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