66
Question
Cheque received and deposited into bank on the same day is a contra entry.
Cheque received and deposited into bank on the same day is a contra entry.
Open in App
Solution
The correct option is B False
Often, cash is withdrawn from bank for use in office. In such a case the amount is entered in the bank column on the payments side and also in the cash column on the receipts side. In the reverse case of cash being sent to the bank, the amount is recorded in the bank column on the receipts side and in cash column on payments side. The entries that affect both the columns and sides of cash book, i.e. Cash and Bank, are termed as contra entries. It involves both the accounts, i.e. Cash and Bank A/c . For example, Cash withdrawn from bank for office use or deposited in the bank. When a cheque is received and deposited in the bank, it cannot be termed as contra entry, as it involves two accounts: Bank A/c and the account of the party from whom the cheque is received.
Often, cash is withdrawn from bank for use in office. In such a case the amount is entered in the bank column on the payments side and also in the cash column on the receipts side. In the reverse case of cash being sent to the bank, the amount is recorded in the bank column on the receipts side and in cash column on payments side.
The entries that affect both the columns and sides of cash book, i.e. Cash and Bank, are termed as contra entries. It involves both the accounts, i.e. Cash and Bank A/c . For example, Cash withdrawn from bank for office use or deposited in the bank.
When a cheque is received and deposited in the bank, it cannot be termed as contra entry, as it involves two accounts: Bank A/c and the account of the party from whom the cheque is received.
Suggest Corrections
0
Similar questions