When Sam got into work on Friday, his friend Rachel was collecting money for a charity run. Sam donated €20, which he had in his desk at work.
At lunchtime, he checked his online banking and saw that a direct debit of €60 went out of his account to pay his phone bill.
1. What are Sam’s cash transactions? 2. What are Sam’s bank transactions?
Both cash and bank transactions can be recorded in an analysed cash book by including a Bank column and a Cash column.
DR
Date Details 2016
ANALYSED CASH BOOK
F Cash Bank Analysis columns Date €€
CONTRA ENTRIES
Sometimes a debit entry and a credit entry must be made for a single transaction. This is called a contra entry.
For example, if a person withdraws €200 from their bank account in cash, the transaction would be shown in the analysed cash book as €200 coming out of the Bank column on the credit side and as €200 going into the Cash column on the debit side.
Likewise, if a person had €150 cash and decided to pay it into their bank account, the transaction would be shown in the analysed cash book as €150 coming out of the Cash column on the credit side and as €150 going into the Bank column on the debit side.
The letter C is placed in the F column to show when a transaction is a contra entry.