Prepare Double column Cash book of a trader, Mr. Biswajit for January 2018 based on the provided transactions.
Understand the Problem
The question asks for the preparation of a Double Column Cash Book for a trader named Mr. Biswajit for the month of January 2018. It provides a list of transactions including cash in hand, cash at bank, and various receipts and payments that need to be recorded accordingly.
Answer
The final closing balances for Mr. Biswajit will be calculated as: - Cash balance: $Total\ receipts - Total\ payments$ - Bank balance: $Total\ bank\ receipts - Total\ bank\ payments$
Answer for screen readers
The final closing balances for Mr. Biswajit in January 2018 will depend on the specific values of receipts and payments provided in the problem. The closing balances would be represented as:
- Cash balance: $Total\ cash\ in - Total\ cash\ out$
- Bank balance: $Total\ bank\ in - Total\ bank\ out$
Steps to Solve
- Identify the columns in the cash book
A double column cash book has two main sections: one for cash transactions and the other for bank transactions. The typical columns are:
- Date
- Particulars
- Cash In (Receipts)
- Cash Out (Payments)
- Bank In (Deposits)
- Bank Out (Withdrawals)
- Record the opening balances
Start by entering the opening balance for cash and bank at the top of the appropriate columns. For Mr. Biswajit, record:
- Cash in hand: Amount specified in the problem
- Cash at bank: Amount specified in the problem
- Enter receipts into the cash and bank columns
Go through the list of transactions and enter each receipt in the cash in column or bank in column. Record:
- The date of the transaction
- The particulars (description of the receipt)
- The amount received
- Enter payments into the cash and bank columns
Next, go through the payment transactions and record them in the cash out column or bank out column. Note:
- The date of the transaction
- The particulars (description of the payment)
- The amount paid
- Calculate balances
After recording all transactions, calculate the total for each of the cash and bank columns. Deduct total payments from total receipts to find the ending balance for both cash and bank.
- Draw final balances
Finally, at the bottom of the cash book, draw lines to separate the ending balances of cash and bank. This will be your closing balance for Mr. Biswajit for January 2018.
The final closing balances for Mr. Biswajit in January 2018 will depend on the specific values of receipts and payments provided in the problem. The closing balances would be represented as:
- Cash balance: $Total\ cash\ in - Total\ cash\ out$
- Bank balance: $Total\ bank\ in - Total\ bank\ out$
More Information
A cash book is a useful financial tool for traders as it helps to track daily cash flow, analyze expenses, and better manage financial resources.
Tips
- Forgetting to include all transactions can result in inaccurate balances.
- Mixing up cash and bank transactions can lead to confusion, so carefully categorize each transaction.
- Not properly totaling the receipts and payments before calculating the balance can lead to errors; always double-check your addition and subtraction.
AI-generated content may contain errors. Please verify critical information
