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Accountancy - Double column cash book (Cash book with cash and discount column) | 11th Accountancy : Subsidiary Books - II Cash Book

Chapter: 11th Accountancy : Subsidiary Books - II Cash Book

Double column cash book (Cash book with cash and discount column)

It is a cash book with cash and discount columns.

Double column cash book (Cash book with cash and discount column)

It is a cash book with cash and discount columns. As there are two columns, i.e., discount and cash columns, both on debit and credit sides, this cash book is known as ‘double column cash book’.

The double column cash book is prepared on the lines of simple cash book. It has only one additional column, i.e., discount column on each side. Discount column represents discount allowed on the debit side and discount received on the credit side.

In the discount columns, cash discount, i.e., cash discount allowed and cash discount received are recorded. The net amount received is entered in the amount column on the debit side and the net amount paid is entered in the amount column on the credit side. For the seller who allows cash discount, it is a loss and hence it is debited and shown on the debit side of the cash book. For the person making payment, discount received is a gain because less payment is made and it is credited and shown on the credit side of the cash book.

The cash columns are balanced. Discount columns are not balanced, since debit represents discount allowed and credit represents discount received. They are totalled, separately.

The format of double column cash book is given below:


 

Balancing the double column cash book

The cash columns should be balanced as usual and the balance should be carried forward to the next date or period.

However, discount columns are not to be balanced. They are to be totalled on the debit side and credit side separately. The total of discount column on the debit side represents total discount allowed to customers and is debited to discount allowed account. Total of discount column on the credit side represents total discount received and is credited to discount received account. The periodical totals of discount columns are posted as under:

·        Debit Discount allowed account as ‘To Sundry Accounts as per Cash book’, with the periodical total of the discount allowed column.

·        Credit Discount received account as ‘By Sundry Accounts as per Cash Book’ with the periodical total of the discount received column.


Illustration 3

Enter the following transactions in a cash book with cash and discount columns:

2017                                                                                        Rs.   

Jan 1 Cash in hand                                              11,500       

Jan 5 Paid to Ramanathan by depositing in cash deposit machine   300   

     Discount allowed by him                                 10     

Jan 8 Purchased goods for cash                                     400   

Jan 10         Cash received from Rajagopal                             980   

          Discount allowed                              20     

Jan 15         Sold goods for cash                                              400   

Jan 21         Paid cash to Shanthi                                   295   

          Discount received                              5       

Jan 25         Paid wages by cash                                              50     

Jan 31         Paid to Sanjeev Rs. 390 in full settlement of his account           400      

Solution


 

Posting from double column cash book

Following is the procedure for posting entries from double column cash book:

Cash columns: Debit the accounts mentioned on the credit side and the credit is to Cash A/c with the amount mentioned in cash column; credit the accounts mentioned on the debit side and the debit is for Cash A/c with the amount mentioned in cash column.

Discount columns: Debit the concerned personal account mentioned on the credit side and the credit is to Discount received A/c with the amount mentioned in the discount received column. Credit the concerned personal account mentioned on the debit side and the debit is for Discount allowed A/c with the amount entered in the discount allowed column.

 

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