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WAEC Financial Accounting 1999 Question 8

Question 8

Cash Book

Which of the following is a contra entry?

  1. A.Lodgement of cheques into bank account
  2. B.Lodgement of cash in hand into bank account
  3. C.Withdrawal of cash for private use
  4. D.Treatment of discount received in the cash book.
Show the answer and explanation

Answer: B (Lodgement of cash in hand into bank account)

Explanation

Paying office cash into the bank affects both the cash and bank columns of the cash book: a contra entry.