Cash Book

JKSSB FAA Exam Notes with PYQ, MCQ & Statement-Based Questions

1. Meaning

A Cash Book is a subsidiary book (Book of Original Entry) that records all cash and bank transactions of a business in chronological order.

• It serves the dual purpose of a Journal (original entry) and a Ledger (Cash/Bank Account) — no separate Cash Account or Bank Account is opened in the ledger when a Cash Book is maintained.
• It always shows a Debit balance (or Nil) — cash cannot show a credit balance, since we cannot pay more cash than we have.
• Receipts are recorded on the Debit (left) side; Payments are recorded on the Credit (right) side.

2. Types of Cash Book

3. Single Column Cash Book

Records only cash receipts and cash payments. Format similar to a normal ledger account (Dr. and Cr. sides) with Date, Particulars, L.F., and Amount columns.

Balancing: Since it can never show a credit balance, the balance is always Debit (representing cash in hand) or Nil.

Specimen Format — Single Column Cash Book

Solved Example — Single Column Cash Book

Q. Prepare a Single Column Cash Book from the following: 1st Jan — Cash in hand ₹6,000; 3rd — Cash Sales ₹4,000; 7th — Paid to Ram ₹2,500; 15th — Received from Shyam ₹1,500; 20th — Paid Rent ₹800; 28th — Paid Salaries ₹1,200.

Solution:

Closing Cash Balance = ₹7,000 (Dr.)

4. Double Column Cash Book (Cash + Discount)

Has two amount columns on each side: Cash column and Discount column.

• Discount Allowed appears on the Debit side (an expense/loss to us, given to debtors when they pay).
• Discount Received appears on the Credit side (a gain to us, received from creditors when we pay).
• Discount columns are NOT balanced like the cash column — they are simply totalled and posted to the Discount Allowed A/c (debit total) and Discount Received A/c (credit total) in the ledger.

Specimen Format — Double Column (Cash + Discount) Cash Book

Solved Example — Double Column (Cash + Discount) Cash Book

Q. Prepare Cash Book with Discount column: 1st — Cash balance ₹5,000; 5th — Received from Ajay ₹2,850, discount allowed ₹150; 10th — Paid to Vijay ₹1,900, discount received ₹100; 18th — Cash Sales ₹3,000.

Solution:

Closing Cash Balance = ₹9,000 (Dr.); Discount Allowed A/c debited ₹150; Discount Received A/c credited ₹100

5. Double Column Cash Book (Cash + Bank)

Some exams also test the Cash + Bank variant (without discount) — has Cash and Bank columns on each side, following the same contra-entry logic as the Triple Column Cash Book, but without a Discount column.

Specimen Format — Double Column (Cash + Bank) Cash Book

6. Triple Column Cash Book (Cash + Bank + Discount)

The most important and most tested format — has three columns on each side: Discount, Cash, and Bank.

Key Rules

• Contra Entries: transactions that affect BOTH cash and bank simultaneously (e.g., cash deposited into bank, cash withdrawn from bank for office use) are recorded on BOTH sides of the Cash Book — denoted by 'C' in the L.F. column. They are NOT posted to the ledger again (self-balancing).
• Cash deposited into bank → Credit (Cash column) + Debit (Bank column).
• Cash withdrawn from bank for office use → Debit (Cash column) + Credit (Bank column).
• Cheque received and deposited same day → Debit (Bank column) directly.
• Cheque received but NOT deposited same day → Debit (Cash column) first [treated like cash]; when later deposited → Contra entry.
• Dishonour of cheque (received earlier, deposited, now bounced) → Credit (Bank column), because the earlier debit to bank is now reversed.
• Cheque issued by us and dishonoured → Debit (Bank column), reversing the earlier credit.
• Bank charges, interest allowed/charged by bank, direct deposits/withdrawals by bank → recorded only in the Bank column (single entry, since the other aspect goes to a ledger account, e.g., Bank Charges A/c, Interest A/c).

7. Specimen Format — Triple Column Cash Book

(Date and L.F. columns omitted here for width; include them in your actual answer sheet as: Date | Particulars | L.F. | Disc. | Cash | Bank on each side. Contra entries are marked 'C' in the L.F. column.)

(Dr. side = Receipts; Cr. side = Payments; 'C' marks contra entries which are not posted elsewhere)

8. Petty Cash Book & Imprest System

A Petty Cash Book is maintained to record small, frequent expenses (postage, stationery, conveyance, refreshments etc.) so the main Cash Book is not overloaded with minor entries.

Imprest System

• A fixed sum of money (the 'imprest amount') is given to the Petty Cashier at the start of a period.
• The Petty Cashier spends out of this amount and maintains records under analytical (columnar) headings.
• At the end of the period, the Chief Cashier reimburses exactly the amount spent, restoring the petty cash balance back to the original imprest amount.
• Advantage: better control, reduced workload for the main cashier, and clear analysis of petty expenditure by category.

Specimen Format — Analytical Petty Cash Book

(Each analytical column total is posted to its respective expense ledger account; the 'Total' column is balanced like a normal cash account.)

9. Solved Example — Triple Column Cash Book

Q. Prepare a Triple Column Cash Book from the following transactions for March 2024:

Solution (key postings):

• 1st — Balance b/d: Cash ₹10,000 (Dr.); Bank ₹5,000 (Cr., since overdraft)
• 3rd — To Sales A/c: Cash ₹8,000 (Dr.)
• 5th — Contra: Cash ₹6,000 (Cr.); Bank ₹6,000 (Dr.)
• 8th — To Ramesh: Cash ₹4,800 (Dr.); Discount ₹200 (Dr. column)
• 12th — By Suresh: Bank ₹5,850 (Cr.); Discount ₹150 (Cr. column)
• 18th — Contra: Bank ₹2,000 (Cr.); Cash ₹2,000 (Dr.)
• 25th — By Rent A/c: Bank ₹1,500 (Cr.)
• 28th — By Bank Charges A/c: Bank ₹100 (Cr.)

Final Balances: Cash = 10,000 + 8,000 + 4,800 + 2,000 − 6,000 = ₹18,800 (Dr.)

Bank = 6,000 + 2,000 (Dr. side) − 5,000 (opening OD) − 5,850 − 1,500 − 100 − 2,000 = Bank Overdraft of ₹6,450 (Cr. balance c/d)

10. PYQ-Style Statement-Based Questions

PYQ Type 1 — Contra Entry Identification

Q. Which of the following is a contra entry?

• (a) Cash sales ₹5,000
• (b) Cash deposited into bank ₹10,000
• (c) Rent paid by cheque ₹2,000
• (d) Discount allowed ₹300

Answer: (b) Cash deposited into bank — affects both Cash and Bank columns, hence a contra entry, denoted by 'C' in L.F. column.

PYQ Type 2 — Missing Figure (Balancing)

Q. Opening cash balance ₹5,000. During the month, total cash receipts were ₹45,000 and total cash payments were ₹38,000. Find the closing cash balance.

Solution: Closing Balance = Opening Balance + Receipts − Payments = 5,000 + 45,000 − 38,000 = ₹12,000

PYQ Type 3 — Bank Overdraft Opening Balance

Q. A Triple Column Cash Book opens with Cash balance ₹8,000 (Dr.) and Bank overdraft ₹3,000. Total bank receipts during the month were ₹20,000 and total bank payments were ₹15,000. Find the closing Bank balance.

Solution: Bank Balance = Opening (Dr./Cr.) + Receipts − Payments

Opening Bank = −3,000 (overdraft, i.e., Cr. balance)

Closing Bank = −3,000 + 20,000 − 15,000 = +2,000, i.e., Bank balance of ₹2,000 (Dr.)

(Tests understanding that overdraft is a negative/credit opening balance in the Bank column.)

PYQ Type 4 — Discount Columns

Q. From a Triple Column Cash Book, the Discount Allowed column total is ₹850 and Discount Received column total is ₹620. What entries are passed in the ledger?

Solution:

• Discount Allowed A/c — Debited with ₹850 (posted from the total of the Dr. side discount column)
• Discount Received A/c — Credited with ₹620 (posted from the total of the Cr. side discount column)

(Discount columns are never individually balanced like Cash/Bank columns — only totalled and posted.)

PYQ Type 5 — Cheque Received but Not Deposited

Q. A cheque of ₹5,000 is received from a customer on 10th March but deposited into the bank only on 15th March. In which column should the entry be made on 10th March, and what entry is passed on 15th March?

Solution:

10th March: Debit the Cash column with ₹5,000 (treated as cash until banked).

15th March: Contra entry — Credit Cash column ₹5,000, Debit Bank column ₹5,000.

PYQ Type 6 — Cheque Dishonour

Q. A cheque for ₹3,000 received from Mohan and deposited into bank was later dishonoured. How is this recorded in the Cash Book?

Solution: Credit the Bank column with ₹3,000 (reversing the earlier debit entry when the cheque was deposited), since the amount is no longer realised.

PYQ Type 7 — Imprest Reimbursement (Petty Cash)

Q. A Petty Cashier is given an imprest of ₹2,000 on 1st April. During April, he spends ₹1,650 on various petty expenses. How much will the Chief Cashier reimburse on 1st May to restore the imprest?

Solution: Reimbursement = Amount spent = ₹1,650 (so that petty cash balance is restored to the fixed imprest of ₹2,000).

11. Tough-Level Statement-Based Questions (JKSSB Pattern)

Tough Q.1 — Full Triple Column Reconstruction

Q. From the following, prepare a Triple Column Cash Book and find the closing balances of Cash and Bank for the month of April 2024:

Solution (step-by-step):

• 1st — b/d: Cash ₹12,000 (Dr.); Bank ₹20,000 (Dr.)
• 4th — To Anil A/c: Bank ₹6,000 (Dr.) [cheque deposited same day → direct bank entry]
• 6th — To Sales A/c: Cash ₹9,500 (Dr.)
• 9th — Contra: Cash ₹8,000 (Cr.); Bank ₹8,000 (Dr.)
• 12th — By Bharat A/c: Bank ₹3,920 (Cr.); Discount ₹80 (Cr. column)
• 15th — By Anil A/c (dishonour): Bank ₹6,000 (Cr.) [reverses the 4th entry]
• 20th — By Drawings A/c: Bank ₹1,500 (Cr.)
• 24th — To Chetan A/c: Cash ₹4,880 (Dr.); Discount ₹120 (Dr. column)
• 28th — By Rent A/c: Bank ₹2,000 (Cr.)
• 30th — By Bank Charges A/c: Bank ₹60 (Cr.)

Cash column: Dr. total = 12,000 + 9,500 + 4,880 = 26,380; Cr. total = 8,000 → Closing Cash = ₹18,380 (Dr.)

Bank column: Dr. total = 20,000 + 6,000 + 8,000 = 34,000; Cr. total = 3,920 + 6,000 + 1,500 + 2,000 + 60 = 13,480 → Closing Bank = ₹20,520 (Dr.)

(This question tests 5 concepts together: contra entry, cheque deposited same day, cheque dishonour, drawings, and bank charges — a classic tough-level combination question.)

Tough Q.2 — Overdraft Throughout

Q. A firm's Bank column opens with an overdraft of ₹15,000. During the month, cheques issued totalled ₹40,000 and cheques/cash deposited into bank totalled ₹28,000. What is the closing Bank balance and its nature?

Solution:

Closing Bank Balance = Opening (Cr./OD) − Payments... expressed algebraically: Opening OD (−15,000) − Cheques issued (40,000, Cr. side) + Deposits (28,000, Dr. side)

= −15,000 − 40,000 + 28,000 = −27,000

Closing Balance = Overdraft of ₹27,000 (Cr. balance c/d in Bank column)

Tough Q.3 — Reverse Engineering (Find Opening Balance)

Q. A Cash Book shows a closing cash balance of ₹9,200. During the month, total cash receipts (excluding opening balance) were ₹52,000 and total cash payments were ₹47,300. Find the opening cash balance.

Solution:

Closing Balance = Opening Balance + Receipts − Payments

9,200 = Opening Balance + 52,000 − 47,300

Opening Balance = 9,200 − 52,000 + 47,300 = ₹4,500

Tough Q.4 — Discount + Contra Combined

Q. In a Triple Column Cash Book, the Discount Allowed column total is ₹1,200 and Discount Received column total is ₹950. Additionally, there were two contra entries of ₹5,000 and ₹3,000 (cash deposited into bank and cash withdrawn from bank respectively). Explain the ledger postings required for ALL of these items.

Solution:

• Discount Allowed A/c — Debited with ₹1,200 (from Dr. side discount column total)
• Discount Received A/c — Credited with ₹950 (from Cr. side discount column total)
• Contra entry of ₹5,000 (cash deposited) — NO further ledger posting needed; already complete within the Cash Book itself (Dr. Bank, Cr. Cash)
• Contra entry of ₹3,000 (cash withdrawn from bank) — NO further ledger posting needed; already complete within the Cash Book itself (Dr. Cash, Cr. Bank)

(Key tough-level trap: students often wrongly try to post contra entries again to the ledger — contra entries are self-contained and require NO separate ledger posting.)

Tough Q.5 — Multiple Dishonours

Q. A cheque of ₹4,000 received from Deepak and deposited was dishonoured. Also, a cheque of ₹2,500 issued by the firm to Naresh was dishonoured. Show how both are recorded in the Triple Column Cash Book.

Solution:

• Deepak's cheque dishonoured (was an inflow, now reversed) → Credit Bank column ₹4,000 (By Deepak A/c — Dishonoured Cheque)
• Naresh's cheque dishonoured (was an outflow, now reversed since payment failed) → Debit Bank column ₹2,500 (To Naresh A/c — Cheque Dishonoured)

(Rule: dishonour of a RECEIVED cheque = credit bank (reduces bank balance since money never actually came in); dishonour of an ISSUED cheque = debit bank (increases bank balance since money never actually went out).)

12. Quick MCQs (Objective/PYQ Style)

13. Exam Strategy Tips (JKSSB FAA)

• Always identify contra entries first when solving Triple Column Cash Book problems — mark them with 'C' and post on both sides simultaneously.
• Remember discount columns are NEVER balanced — only totalled and transferred to Discount Allowed/Received Accounts.
• Watch for opening bank overdraft — it starts as a credit balance in the Bank column, a common trap in tough-level papers.
• Cheque received but not yet banked = treat as cash first; only becomes a bank entry (via contra) on the date of deposit.
• Dishonour of a cheque always reverses the earlier entry — received cheque dishonoured = credit bank; issued cheque dishonoured = debit bank.
• For Petty Cash imprest questions, remember: Reimbursement Amount = Amount Spent (not a fixed number), to restore the original imprest balance.

These notes are structured for quick revision + practice. Recommend cross-solving additional Triple Column Cash Book and Petty Cash problems from previous JKSSB Accounts/Finance Assistant papers for speed and accuracy.

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