Accounting · Cash Book Entries
A financial institution maintains a triple column cash book to record its daily operational liquidity. During the month of March 2025, the bank records a contra entry involving the withdrawal of cash from the central bank account for the purpose of maintaining the statutory cash reserve at the local branch chest. Which of the following statements accurately describes the procedural recording of this specific transaction in the triple column cash book of the branch?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The entry is made on the debit side of the bank column and the credit side of the discount column to reflect the liquidity cost.
- 2The transaction is treated as a nominal expense and recorded in the journal proper instead of the subsidiary books to avoid double counting.
- 3The amount is debited in the cash column and simultaneously credited in the bank column of the same cash book with the letter 'C' marked in the Ledger Folio column.✓
- 4The transaction is recorded only on the credit side in the bank column with a reference to the cash account in the particulars.
Correct answer
The amount is debited in the cash column and simultaneously credited in the bank column of the same cash book with the letter 'C' marked in the Ledger Folio column.
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