CONTRA ENTRY
Contra is a latin word which shows that cash has been withdrawn from the office and deposited in the bank or withdrawals of cash from bank for office use.
It is an entry involving the payment of cash into the bank and is denoted by “C” in the folio column.
It may simply be defined as the transfer of an account to the identical side of another account.
a. Payment of cash to bank.
When too much cash is in the office, the whole or part of it can be paid into the bank.
Effect Action Required
Cash balance is decreased Cr. Cash column
Bank balance is increased Dr. Bank column
E.g: Jan. 1 cash balanced N300
Jan. 2 cash paid into the bank amounted to N710
Dr Cash Book Cr
| Date | Particulars | Folio | Cash | Bank | Date | Particulars | Folio | Cash | Bank |
| Jan. 1 | Cash | C | 300 | Jan. 1 | Bank | C | 300 | ||
| Jan. 2 | Cash | C | 710 | Jan. 2 | Bank | C | 710 |
Note: “C” must be put on both sides to represent contra entry.
b. Withdrawals from bank for office use.
When there is no sufficient cash in the office to meet payments, cash can be withdrawn from bank. When this occurs, the effect and action will be started below.
Effect Action Required
Bank balance will decrease Cr. Bank column
Cash balance will increase Dr. Cash column
E.g: Jan. 4 withdrew cash N800 from bank for office use.
Dr Cr
| Date | Particulars | Folio | Cash | Bank | Date | Particulars | Folio | Cash | Bank |
| Jan. 4 | Bank | C | 800 | Jan. 4 | Cash | C | 800 |
Read our disclaimer.
AD: Take Free online baptism course: Preachi.com 