Double Column Cash Book | Format, Calculation, and Example (2024)

A double column cash book, also known as a two column cash book, consists of two columns on each side to record cash and bank transactions.

Rather than separating cash and bank accounts, a double column cash book enables accountants to maintain the two accounts side by side.

This allows for greater convenience when recording transactions. In particular, we can quickly see overall balances.

Simply by adding a bank column to both sides of a single column cash book, we can turn it into a double column (or two column) cash book.

Advantages of Double Column Cash Book

Compared to single column cash books, double column cash books have the following advantages:

• Convenience: Cash and bank accounts are kept side by side in one place.

• Cost- and time-effective: No separate bank account needs to be maintained.

Format/Specimen of Double Column Cash Book

The format of a double column cash book is similar to a single column cash book. The exception is that an additional column is included on both sides to record cash discount.

An overview of the format of a double column cash book, which is commonly used by organizations to account for their cash transactions, is shown below.

Posting the Double Column Cash Book

The following procedure is used to post entries from a double column cash book to ledger accounts:

1. Entries without discounts are posted in the usual manner, as in a single column cash book.
2. Entries with discounts that appear on the debit side are posted to the credit of the respective account with the total amount (i.e., actual cash paid and also discount received).
3. Entries with discounts that appear on the credit side are posted to the debit of the respective account with the total amount (i.e., actual cash paid and also discount received).
4. Total of the discount column on the debit side is posted as debit to the discount allowed account.
5. Total of the discount column on the credit side is posted as credit to the discount received account.

Example

Prepare a double column cash book using the following transactions, and post the entries, therefore, to ledger accounts.

For the year 2016, the transactions are as follows:

• Jan. 01: Opening balance of cash $4,500

• Jan. 03: Received cash from R & Co. $3,880 and allowed them a discount of $20

• Jan. 05: Paid cash to H & Co. $3,590 and received a discount of $10

• Jan. 07: Merchandise purchased for cash $940

• Jan. 09: Received interest on investment $365

• Jan. 12: Purchased machinery for cash $4,100

• Jan. 15: Cash sales for the first half of the month $6,500

• Jan. 17: Paid cash for stationery $635

• Jan. 20: Paid for office furniture $710

• Jan. 21: Paid to H & Co. $970 and received a cash discount of $30

• Jan. 28: Cash received from R & Co. $670 and allowed them a discount of $30

• Jan. 31: Cash sales for the second half of the month $7,600

• Jan. 31: Paid for salaries $1,250

Solution

General Ledger

Accounts Receivable Ledger

Accounts Payable Ledger

Cashbook Exercises

• Multiple choice questions (MCQs)

• Fill in the blanks quiz with answers

• Short questions with answers