Question

What is a contra entry? How can you deal with this entry while preparing a triple column cash book?

Answer 1

Contra entry represents deposits or withdrawals of cash from bank or vice-versa. The purpose of contra entry is to indicate the transactions that affect both cash and bank balances. This entry does not affect the financial positions of a business.

A contra entry is recorded in both sides of a triple column Cash Book in cash & bank columns and is denoted by 'C' in the ledger folio column.