Both sides have the affected two accounts, namely the Cash and Bank account columns. Note that there is a Dr or debit side and a contra-side or Cr Credit side in each contra voucher in Tally.Take the first transaction, which is a contra entry example in Tally. All debit transactions denoted as Dr (debit side) on top will have a destination account referred to as a ‘To ….’ entry while the destination account has a credit or Cr (credit side) on top of the column and have a ‘By……’ entry. Traditionally, contra entries have the two accounts affected, the Cash account and the Bank account. (Cashbook with Cash and Bank column) (Dr) (Cr) Take a look at the below contra entry example of a double-entry cash book of M/S Mohan Enterprises to understand its format and the recording of contra entries.ĭouble column cash book of Mohan Enterprises Hence, the double entries method is employed wherein the transactions are recorded double lying side by side to avoid confusion. What is contra entry format? As already seen, when two accounts are affected, you will need to pass two entries, namely from one account to another, in a single entry book. Withdrew cash of Rs 10,500/- for personal use. The transaction affects two accounts, namely the Bank account and Cash a/c. The transaction affects two accounts, namely the Bank account and Petty Cash a/c.ĭeposited cash of Rs 15,000/- to the official bank account. Withdrawn from ATM of office bank account towards petty expenses Rs 5,000/. Paid rent for March by cheque of Rs 18,500/.

Made a cash purchase of stationery worth Rs 1,250/. The transaction affects only one account, namely the Bank a/c. Mr Shyam deposits a cheque for Rs 8000/- to our bank account. A cheque received is the same as cash received.

Received cheque from M/s QuickPay Rs 9,500 and deposited the cheque into the bank. The transaction affects only one account, namely the Cash a/c. The transaction affects 2 cash accounts, namely the Petty Cash a/c and Cash a/c.

Transferred Rs 2,500 cash to the petty cash account. Just as a reminder, a contra entry affects both the bank and cash accounts. Let us go ahead and tabulate some daily transactions in a business and try to identify the contra entries with a reason as to why they are contra entries based on the above paragraph’s definition. Īlso Read: 3 Golden Rules of Accounting, Explained with Best Examples So, now you have just discovered what a contra entry means and the meaning of a cash voucher or the need to record the movement of money from one cash account to another cash account using a contra entry. When you look at the transaction from an accounting point of view, the cash has moved from the petty cash account to the petty expenses account. When such payments are made, you use a contra voucher, a petty cash voucher, to account for the money spent. This account holds a small amount of money for daily small expenses like buying small stationery items, paying for courier charges, ordering refreshments etc. This money comes out of an account called the ‘Petty Cash Account’. While at work, you order refreshments for the team. A transfer of cash from a cash account (a/c) to another cash account:Ī question that often leaves people wondering is the definition of movement from one cash account to another cash account? Consider an example.You can further understand the meaning of contra entry b y looking at what it comprises of: Thus, all transactions involving the bank account an d cash are called contra entries. When looking at such transactions, the entry appears, which is called a contra voucher. However, when one makes such transactions, it is always for a purpose and has a destination account. Contra Entry meaningĪ transaction involving your bank account and cash are generally reflected in the books of accounts. So, let’s discover what contra entry and contra voucher means. If you have to maintain an account of your money, you would need a contra voucher to record such transactions. For example, let’s say you transferred money from one of your accounts to another bank account belonging to you or withdrew money using the ATM from your account etc. On a daily basis, one carries out many transactions termed contra entry in the books of accounts.

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