A double column cash book is a Cash Book with two columns on both sides. These two columns are Cash and Bank. In today’s world practically speaking no business can operate without a bank account as the majority of transactions take place with the help of a bank account. It is due to various legal bindings and security reasons that the transactions have to be necessarily routed through a bank account. This makes it inevitable (unavoidable) for a business to maintain a Double column cash book. The transactions related to cash and bank are separately recorded in a cash book this facilitates the availability of bank balance immediately with the business.
Balancing of Double Column Cash Book
Like Single Column Cash Book, Double Column Cash Book is also balanced. Total of Payment side is deducted from the Total of Receipt side, difference amount is written in the Amount Column on the credit side as “Balance c/d”. When both the sides are totaled then “Balance c/d” is written on the debit side as “Balance b/d”, which shows the opening Cash Balance of the next period.
Remember Discount Columns on the Debit as well as Credit side of the book is only totaled not balanced. This is because both discounts allowed and discounts received are nominal accounts and are treated as expenses and incomes of the business respectively. Therefore, being nominal in nature they are never balanced simply totaled.
Ledger in Accounting?
Ledger is the next stage after Journal. After recording all the entries in the Journal, the next step is the posting of the transaction in the respective accounts. These accounts are collectively known as Ledgers.