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Standard XII
Accountancy
Question

Transaction recorded both on debit and credit side of cash book is known as contra entry.
  1. True
  2. False

A
False
B
True
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Solution
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In cash book, cash transactions (transactions affecting cash in hand) are recorded in the cash column and bank transactions (transactions affecting cash at bank) are recorded in the bank column. On the debit side , receipts of cash and checks are recorded, that is, items that increase the cash balance or the bank balance. On the credit side, payments of cash and checks are recorded, that is, items that decrease the cash balance or the bank balance .
A contra entry in the cash book is one which does not require further entries in other ledger accounts. This is because for the given transaction, both entries are made in the cash book itself, the transaction affecting both the cash account and the bank account. Transaction recorded on both debit and credit side of cash book is known as contra entry.

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Similar Questions
Q1
Transaction recorded both on debit and credit side of cash book is known as contra entry.
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Q2
An entry recorded on both sides of cash Book is known as _______ entry.
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Q3
Select the most appropriate alternatives from those given below :

An entry recorded on both sides of cash book is known as ________ entry.
a) opening
b) rectifying
c) transfer
d) contra.
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Q4
If the debit and credit aspects of a transaction are recorded in the cash book it is a:
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Q5

State whether the following statements are TRUE or FALSE :

1. Total of payments side can be greater than total of receipts side in case of bank column.
2. Purchase of asset or stationery on credit is recorded in purchase book.
3. When goods are returned by buyer to seller, buyer sends a debit note.
4. Cheque received and deposited into bank on the same day is a contra entry.
5. Simple petty cash book is not very popular.
6. Interest on overdraft charged by bank is recorded in the cash column.
7. It is not necessary to record dishonor of cheques in the cash book.
8. Cheque book facility is available for fixed deposit account.
9. Businessman generally operates savings bank account.
10. A cash book is both a journal as well as ledger.
11. Cash book is a book of original entry.
12. Cash discount allowed is recorded on the debit side of cash book
13. Credit transactions are never recorded in cash book.
14. Endorsed cheques are always recorded on the payment side in the bank column.
15. A person who endorses the cheque is known as endorser.

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