If payment is made through cheque and cheque is dishonoured, the entry on the debit side of the cash book is made by entering the amount of dishonoured cheque in the bank column and name of the party in the particular column of the cash book.On 30-1-2008, goods were sold to Vijay for Rs. These transactions should be indicated by the contra sign ‘C’ in the ‘Ledger Folio’ column against both sides of the cash book.When a business enterprise receives cash discount, only net amount (i.e., the amount after deducting the discount) paid shall be recorded on the credit side under the cash column, if the payment is made in cash. Therefore, the cash book is credited by $72. 3,600, given to Payal on 12-01-2008 for making the payment settling her account of Rs. (iv) The seller submits all the forms received by him on goods sold/services rendered on credit basis to his bank, generally daily.For this purpose, entry on the credit side of the cash book is made by entering the amount of dishonoured cheque in the bank column and name of the party in the particular column of the cash book.Amount deposited in bank is recorded on the debit (receipt) side of bank column showing increase in bank and credit (payment) side under the cash column showing decrease in cash.It is treated as cash received on the date of receipt and recorded in the cash column on receipts side. Similarly, commission charged by the bank is treated as selling expenses and recorded on the credit (payment) side of the cash book under the bank column.To Discount Allowed A/c (with the amount of discount allowed earlier)When a business enterprise allows cash discount then only net amount received (i.e., the amount after deducting the discount) shall be recorded on the debit (receipts) side under the cash column, if the payment is received in cash. Some of the popular cards are HSBC, SBI Cards, BOB Card, ICICI Bank Card, HDFC Cards and Andhra Bank Card etc.A bearer cheque received from a party and not deposited in the bank, can be given to any third party for making the similar payment to the latter. It is very much evident from the above discussion, cash book is both journal and ledger as it contains all features of journal and ledger and serves purposes of both.The owner can know the accurate cash the position of his business from the cash book. This, credit balance of bank is known as bank overdraft. The amount will be recorded on the receipts side in bank column and on the payments side in the cash column.
4,500, received from Kabir on 30.1.2008, had been dishonoured. 45,000 was taken from the IDBI.Differences between Cash Balances of Bank and Cash Book(ix) Interest, Commission or Other Charges by the Bank:Cash Book of Original Entry: Meaning and FeaturesUpon receiving the information that the customers have deposited any payment into the bank of the business enterprise, the entry shall be recorded in the bank column on the debit (receipt) side of the cash book.The entry will be made in the bank column on the credit (payment) side of the cash book when the bank debits the account of business enterprise on account of interest, commission or other charges for the services rendered by the bank.Read Accounting Notes, Procedures, Problems and SolutionsBank overdraft is an arrangement made with the bank under which a business enterprise can withdraw beyond its bank balance but upto an agreed limit. (xii) Bills Sent for Collection Collected by the Bank:On 23-01-2008, a business enterprise receives a cheque of Rs. The amount is debited to card holder’s account immediately in case of Debit card whereas in case of credit card, the card holder has to pay the amount in full or part. 50,000 to Babu, bank intimated that the business enterprise had exercised the overdraft facility and drawn Rs.