Question

A contra entry in the Cash Book means that:________.

• A. Debit must be in the Bank Account and the credit in the Cash Account
• B. Debit and credit entries are in any folio but in the Cash Book
• C. Debit and credit entries are on the same folio of the Cash Book
• D. Debit must be in the Cash Account and the credit in the Bank Account

Answer 1

The correct option is C Debit and credit entries are on the same folio of the Cash Book

Contra entry can be:

1.Bank A/c Dr...

To Cash A/c

or

2.Cash A/c Dr...

To Bank A/c

Credit and Debit entries are both taken into consideration into the cash book and not necessarily only bank or only cash entries are reflected.