Question

Every time cash is paid into bank or withdrawn from bank for office use, entries are made in both bank and cash columns. Such entries are known as ______.

Options

• Contra Entries

• Counter Entries

• Deity Entries

• none

Answer 1

Every time cash is paid into bank or withdrawn from bank for office use, entries are made in both bank and cash columns. Such entries are known as contra entries.

Explanation:

When cash is deposited into the bank or withdrawn from the bank for office use, both cash and bank columns in the cash book are affected.
Such entries are called ‘contra entries’ because the effect of the transaction is recorded on both sides of the same book, cancelling each other’s impact partially.