Question

The contra entry is passed only if______.

• A. double column cash book is prepared
• B. three column cash book is prepared
• C. single column cash book is prepared
• D. petty cash book is prepared

Answer 1

Answer: (A), (B)

The correct options are
A double column cash book is prepared
B three column cash book is prepared

A contra entry refers to an entry involving Bank account and Cash account both and is passed in the Double column or Triple column cash book. In a contra entry, either bank account is debited and cash account is credited or vice versa. It involves only cash and bank account and no other account.

The examples of contra entry are cash deposit in the bank, cash withdrawal from the bank, etc. While recording a contra entry, we write 'C' in the ledger folio column because we do not need to post it to any other ledger account.

Thus, the correct options are A and B.