Exam layout
Two-column cash book format
A two-column cash book records cash and bank transactions side by side, acting as both a book of prime entry and the cash and bank ledger accounts.
The standard format
- Debit side: money received into cash or bank
- Credit side: money paid out of cash or bank
- Cash column and bank column on each side
- Contra entries for transfers between cash and bank
- Balances carried down for cash and bank
Filled example
| Balance b/d | RM 2,000 |
| Receipts from customers | RM 3,500 |
| Total debit | RM 5,500 |
| Payments to suppliers | RM 2,800 |
| Wages | RM 1,200 |
| Balance c/d | RM 1,500 |
| Total credit | RM 5,500 |
Notes
- The cash book is both a book of prime entry and a ledger account.
- Discounts are not shown here unless a third column is added.
- Transfers between cash and bank are contra entries appearing on both sides.
Building and reading this format
A two-column cash book records the cash a business holds and the money in its bank account in a single book. Each side has a cash column and a bank column.
It replaces separate cash and bank accounts in the ledger, and it is also a book of prime entry. Both cash and bank are assets, so money received goes on the debit side and money paid out goes on the credit side.
Start with the opening balances on the debit side, for example RM300 cash in hand and RM4,500 at the bank on 1 January. Enter each receipt with its date, the name of the other account, and the amount in the cash column or the bank column. A customer paying RM800 by cheque goes in the bank column.
A small cash sale of RM120 goes in the cash column. The column records how the money arrived.
Payments work the same way. Rent paid by cheque of RM1,000 goes in the bank column. Wages paid in notes of RM250 go in the cash column.
At the end of the period, balance each column separately. The cash column gives cash in hand.
The bank column gives the bank balance. If the account is overdrawn, the bank balance is a credit balance carried down.
A contra entry arises when money moves between cash and bank inside the business, for example paying surplus cash into the bank. Both accounts are in the same book, so one transaction makes two entries. Paying RM200 of cash into the bank is credited in the cash column and debited in the bank column.
Mark each with a "C" in the folio column. The double entry is complete in the cash book, so nothing is posted elsewhere.
The closing balances show liquidity at a glance. The cash column shows what is available for small payments. A credit balance in the bank column warns that the account is overdrawn.
Marks are lost by putting an item in the wrong column, such as a cheque in the cash column. Recording only one half of a contra entry, or both halves on the same side, breaks the double entry.
Balancing the two columns together into one figure is also wrong. Balance cash and bank separately, and show the balances brought down and carried down.
Clear dates, narratives, correct column choice and two separately balanced columns make a cash book that is accurate and easy to follow.
If contra entries and column choices slow you down in exams, one of our teachers can drill them with you on past-paper cash books until they are automatic. Book a trial class
Related how-to
These formats are standard accounting practice with our own figures. Check your board's exact requirements on the exam boards page.
Practise the two-column cash book
Share your own attempt in the trial class and the teacher will mark the layout line by line. One-to-one and online, from RM75/hr.
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