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Class 11 Recording of Transactions – II: cheat sheet
CBSE Accountancy. Single and double column cash books, contra entries, the petty cash book on the imprest system, the purchases, sales and return books, and the journal proper.
Key ideas
- The cash book records receipts on the debit side and payments on the credit side; it is both a book of entry and the cash (and bank) account.
- The cash column can never show a credit balance; the bank column can, when the account is overdrawn.
- A contra entry touches both columns, cash deposited into the bank or cash withdrawn for office use, and is marked C.
- On the imprest system the petty cashier gets a fixed sum, analyses payments by head, and is reimbursed exactly what was spent.
- The purchases and sales books hold only credit purchases and credit sales of goods, at the amount after trade discount.
- Returns go to the purchases return book (debit notes sent) and the sales return book (credit notes sent to customers).
- Anything that fits no other book goes to the journal proper: the opening entry, assets bought on credit, depreciation, an old asset sold on credit.
Remember
| Closing cash | opening cash + cash receipts − cash payments |
| Closing bank | opening bank + bank receipts − bank payments |
| Petty cash reimbursed | amount spent in the period |
| Petty cash in hand | imprest − amount spent |
| Invoice in the purchases or sales book | quantity × rate − trade discount |
| Book totals posted | Purchases A/c Dr. with the total; Sales A/c Cr. with the total; each party with its own amount |
| A supplier’s balance | purchases − returns − payments (a credit balance) |
Watch out
- Entering cash purchases, or furniture bought on credit, in the purchases book.
- Reimbursing the petty cashier the balance left instead of the amount spent.
- Showing a contra entry in only one column.
- Posting the trade discount to an account.
Worked example
Prepare the purchases book of a trader from these credit purchases, and show how it is posted: (1) Coral Crockery: 60 dinner sets at ₹2,150 each, less 5% trade discount; (2) Kite Stationers: 100 notebooks at ₹190 each, less 20% trade discount; (3) Amber Textiles: 20 towels at ₹310 each, less 10% trade discount.
Working: Trade discount is deducted in the book itself and never posted
Answer: (1) Coral Crockery: ₹1,29,000 − 5% = ₹1,22,550 (2) Kite Stationers: ₹19,000 − 20% = ₹15,200 (3) Amber Textiles: ₹6,200 − 10% = ₹5,580 Total ₹1,43,330: Purchases A/c debited with ₹1,43,330; each supplier’s account credited with its net amount.
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