CONTRA ENTRY

We know, for each transaction one account is debited and another account is credited. Thus the two entries are not seen in one account side by side. But in the case of a transaction involving cash account and bank account both the entries will be recorded in double column or treble column cash book. In other words, both the entries connected with the transaction will be seen side by side in cash book. Such an entry is called contra entry. Thus when both the debit and credit aspects of a transaction are recorded on both sides of same account, it is called contra entry. In recording such a transaction the letter “C” is written in “L.F.” column instead of ledger folio number on both sides of Cali Book. This means that both the aspects of the transaction have been recorded and there is no need to post it in ledger. In this

connection, the distinction between contra entry and other entries in cash book may be noted. The double entry work of contra entries is completed in Cash Book — they need not be posted.

Contra entry will be passed in the following cases:

  1. When cash is deposited in the bank:

Bank A/c………… Dr.

To Cash A/c

Bank column — debit side — cash column credit side.

  1. When cash is withdrawn for business use:

Cash A/c…………. Dr.

To Bank A/c

Cash column — debit side — Bank column credit side.\

3.        When the cheque received from the debtor and the same is deposited in

the Bank on any future date:

Bank A/c………….. Dr.
To cash A/c

Bank column — debit side — cash column credit side.

Similar Accounting Articles:

This entry was posted in Financial Accounting and tagged , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>