Meaning: The two column Cash book so-called because for both debit and credit entries, it has two columns, one for recording cash transactions and the other for bank transactions. It is therefore used for recording mixed cash and bank transaction.
Accounting Entries
All payments in cash are recorded by crediting the cash column of the cash book. If the payment is by cheque the bank column is credited.
When cash is withdrawn from the bank (e.g for paying wages and sundry expenses), the cash column is debited and the bank column is credited with the amount involved.
Example:
Record the following transactions in a two column cash book. Balance the cash book and bring down the balances of cash in hand and cash at bank at the end of the period.
19×9
April 2: Introduced N2,900 cash into the business as capital
April 4: Paid N1,850 of the capital into bank
April 10: Cash purchases N300
April 15: Cash sales N450
April 20: Purchases by cheque N700
April 25: Cash sales N650
April 28: Office expenses paid for in cash N30
April 29: Cash paid into bank N1,000
April 30: Wages paid by cheque N75.
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