Double Column Cash Book
A Double Column Cash Book means there are two columns for amounts on both the Debit (Receipts) and Credit (Payments) sides. This allows a business to record and track two different types of money or discounts at the same time, without needing separate ledger accounts.
These two columns can be combinations such as:
- Cash and Bank
- Two separate Bank accounts (e.g., SBI and HDFC)
- Cash and Discount
- Bank and Discount
In this part, we shall discuss the two most common types: (1) Cash & Bank, and (2) Two separate Bank accounts.
🌟 The Magic of Contra Entries (The 'C' Mark)
A contra entry happens when a single transaction affects both columns of the Cash Book at the exact same time. Because the double-entry accounting is completed entirely on this one page, it does not need to be posted anywhere else in your ledger. We show this by writing a "C" in the L.F. (Ledger Folio) column on both sides.
A contra entry happens when a single transaction affects both columns of the Cash Book at the exact same time. Because the double-entry accounting is completed entirely on this one page, it does not need to be posted anywhere else in your ledger. We show this by writing a "C" in the L.F. (Ledger Folio) column on both sides.
1. Type 1: Cash & Bank Columns
This is the standard format. It tracks physical cash in the office (Cash Column) right next to the money held in the bank (Bank Column).
Advanced Rules: Handling Cheques & Dishonours
- Cheque Received (Assume Deposited): If the problem says "Received a cheque" but gives no further information, assume it was deposited into the bank on the same day. (Debit Bank column).
- Cheque Received (Deposited Later): If a cheque is received today, but deposited on a later date, treat the cheque as Cash on the day it is received. (Debit Cash column).
- Depositing the "Later" Cheque: When that cheque is finally sent to the bank, it becomes a Contra Entry, exactly like depositing physical cash. (Debit Bank, Credit Cash).
- Dishonoured Cheque (Received): If a cheque you received bounces, you must cancel the original receipt by recording it on the payment side. (Credit Bank column).
- Dishonoured Cheque (Issued): If a cheque you issued to a supplier bounces, you must cancel the original payment by recording it on the receipt side. (Debit Bank column).
- Drawings vs. Office Use: Withdrawing from the bank for office use is a Contra Entry. Withdrawing for personal use is recorded normally as a payment under "Drawings".
📝 Practical Question 1: Cash & Bank
Prepare a Double Column Cash Book for July 2026 from the following transactions:
- Jul 01: Opening Balance: Cash Rs. 40,000, Bank Rs. 1,20,000.
- Jul 03: Cheque received from Rohan Rs. 15,000 (Nothing mentioned, assume deposited same day).
- Jul 05: Issued a cheque to supplier, Mr. Gupta Rs. 10,000.
- Jul 08: Received a cheque from customer, Amit Rs. 20,000 (Not deposited today).
- Jul 10: Amit's cheque deposited into the bank.
- Jul 12: Withdrew cash from bank for office use Rs. 5,000.
- Jul 15: Withdrew cash from bank for personal use Rs. 3,000.
- Jul 18: Rohan's cheque (deposited on Jul 03) is dishonoured and returned by the bank.
- Jul 22: The cheque issued to Mr. Gupta (on Jul 05) was bounced by the bank.
Step-by-Step Logic & Explanation
Jul 03: Received Cheque (Assumed Deposited)
Action: Because no future deposit date is mentioned, assume it went to the bank today.
Entry: Debit side ➔
To Rohan's A/c ➔ Put 15,000 in the Bank column.
Jul 08: Received Cheque (Not Deposited)
Action: The cheque is kept in the office, so we treat it like physical cash for now.
Entry: Debit side ➔
To Amit's A/c ➔ Put 20,000 in the Cash column.
Jul 10: Depositing Amit's Cheque (CONTRA ENTRY)
Action: We take the "cash" (cheque) from the office and put it in the bank.
Entry (Dr):
To Cash A/c ➔ 20,000 in Bank col. (Bank receives)Entry (Cr):
By Bank A/c ➔ 20,000 in Cash col. (Office gives)
Jul 12: Withdrew for Office Use (CONTRA ENTRY)
Action: Money leaves the bank and enters the office cash box.
Entry (Dr):
To Bank A/c ➔ 5,000 in Cash col. (Office receives)Entry (Cr):
By Cash A/c ➔ 5,000 in Bank col. (Bank gives)
Jul 18: Rohan's Cheque Dishonoured (Bounce)
Action: We previously debited Bank by 15k. The bank rejected it, so we must reverse the receipt.
Entry: Credit side ➔
By Rohan's A/c ➔ Put 15,000 in Bank column.
Jul 22: Issued Cheque Bounced
Action: We paid Gupta 10k on Jul 05. It bounced, meaning the money never left our bank. Reverse the payment.
Entry: Debit side ➔
To Gupta's A/c ➔ Put 10,000 in Bank column.Solution 1: Cash & Bank Double Column
| Dr. (Receipts) | Cr. (Payments) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Date | Particulars | L.F. | Cash (Rs.) | Bank (Rs.) | Date | Particulars | L.F. | Cash (Rs.) | Bank (Rs.) |
| Jul 01 | To Balance b/d | 40,000 | 1,20,000 | Jul 05 | By Gupta's A/c | - | 10,000 | ||
| Jul 03 | To Rohan's A/c | - | 15,000 | Jul 10 | By Bank A/c (Deposit) | C | 20,000 | - | |
| Jul 08 | To Amit's A/c | 20,000 | - | Jul 12 | By Cash A/c (Withdraw) | C | - | 5,000 | |
| Jul 10 | To Cash A/c (Deposit) | C | - | 20,000 | Jul 15 | By Drawings A/c | - | 3,000 | |
| Jul 12 | To Bank A/c (Withdraw) | C | 5,000 | - | Jul 18 | By Rohan's A/c (Bounce) | - | 15,000 | |
| Jul 22 | To Gupta's A/c (Bounce) | - | 10,000 | Jul 31 | By Balance c/d | 45,000 | 1,32,000 | ||
| Total | 65,000 | 1,65,000 | Total | 65,000 | 1,65,000 | ||||
| Aug 01 | To Balance b/d | 45,000 | 1,32,000 | ||||||
2. Type 2: Two Bank Columns (e.g., SBI & HDFC)
If a business operates heavily through banks and has multiple current accounts, they can replace the Cash column with a second Bank column. This allows them to monitor both bank balances simultaneously.
⚠️ Understanding Bank Overdrafts:
Unlike a physical cash box, a bank account can have a negative balance if you withdraw more than you have (if the bank allows it). This is called a Bank Overdraft.
Unlike a physical cash box, a bank account can have a negative balance if you withdraw more than you have (if the bank allows it). This is called a Bank Overdraft.
- An opening overdraft is recorded on the Credit side
(By Balance b/d). - If payments exceed receipts during the month, the closing balance will fall on the Debit side
(To Balance c/d)to make the columns equal.
📝 Practical Question 2: Two Banks & Overdraft
Prepare a Cash Book for August 2026 highlighting an overdraft situation:
- Aug 01: Opening Balances — SBI Rs. 80,000 (Dr.); HDFC Rs. 10,000 (Cr. / Overdraft)
- Aug 05: Transferred funds online from SBI to HDFC Bank Rs. 15,000
- Aug 10: Purchased furniture and paid by HDFC cheque Rs. 20,000
- Aug 15: A customer (Rahul) directly deposited into the SBI account Rs. 30,000
- Aug 20: Interest allowed (received) by SBI Rs. 1,000
- Aug 25: Interest on loan deducted directly by HDFC Rs. 2,000
Step-by-Step Logic & Explanation
Aug 01: Opening Balances
SBI: Positive balance. Record on Dr. side ➔
To Balance b/d (80,000 in SBI).HDFC: Overdraft (Liability). Record on Cr. side ➔
By Balance b/d (10,000 in HDFC).
Aug 05: Transfer from SBI to HDFC (CONTRA ENTRY)
Entry (Dr):
To SBI A/c ➔ 15,000 in HDFC col. (HDFC receives money)Entry (Cr):
By HDFC A/c ➔ 15,000 in SBI col. (SBI gives money)
Aug 10: Purchased Furniture via HDFC
Action: Payment going out of HDFC bank.
Entry: Credit side ➔
By Furniture A/c ➔ Put 20,000 in HDFC col.
Aug 15: Customer Direct Deposit to SBI
Action: Money directly coming into the SBI account.
Entry: Debit side ➔
To Rahul's A/c ➔ Put 30,000 in SBI col.
Aug 20 & 25: Bank Interests
SBI Interest (Received): Debit side ➔
To Interest A/c (1,000 in SBI).HDFC Interest (Deducted): Credit side ➔
By Loan Interest A/c (2,000 in HDFC).
Aug 31: Balancing (Finding the Overdraft)
SBI (Positive): Total Dr (1,11,000) > Total Cr (15,000). Balance = 96,000. Write
By Balance c/d on Cr side.HDFC (Overdraft): Total Cr (32,000) > Total Dr (15,000). The payments exceeded the receipts! Balance = 17,000. Write
To Balance c/d on the Dr side to balance the columns.Solution 2: Two Bank Columns
| Dr. (Receipts) | Cr. (Payments) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Date | Particulars | L.F. | SBI (Rs.) | HDFC (Rs.) | Date | Particulars | L.F. | SBI (Rs.) | HDFC (Rs.) |
| Aug 01 | To Balance b/d | 80,000 | - | Aug 01 | By Balance b/d (OD) | - | 10,000 | ||
| Aug 05 | To SBI A/c (Transfer) | C | - | 15,000 | Aug 05 | By HDFC A/c (Transfer) | C | 15,000 | - |
| Aug 15 | To Rahul's A/c | 30,000 | - | Aug 10 | By Furniture A/c | - | 20,000 | ||
| Aug 20 | To Interest A/c | 1,000 | - | Aug 25 | By Loan Interest A/c | - | 2,000 | ||
| Aug 31 | To Balance c/d (OD) | - | 17,000 | Aug 31 | By Balance c/d | 96,000 | - | ||
| Total | 1,11,000 | 32,000 | Total | 1,11,000 | 32,000 | ||||
| Sep 01 | To Balance b/d | 96,000 | - | Sep 01 | By Balance b/d (OD) | - | 17,000 | ||
Interactive Double Column Ledger
| Dr. (Receipts) | Cr. (Payments) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Date | Particulars | L.F. | Col 1 | Col 2 | Date | Particulars | L.F. | Col 1 | Col 2 |
| Enter your first transaction above to begin. | |||||||||
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