Question

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.

Answer 1

An entry recorded on both the sides of cash book is known as contra entry.

Explanation:
A contra entry is the entry that involves both the accounts, i.e. Cash and Bank. When cash is deposited in a bank or withdrawn from the bank for office use, such transactions will be recorded on both sides of the Cash Book. Thus, it affects both the columns of the Cash Book, i.e. the cash column as well as the bank column. Thus, an entry recorded on both sides of the Cash Book is known as contra entry.