1.Introduction
Government offices handle many financial transactions daily, which are first recorded in journal vouchers. Under the new accounting system, cash receipts and payments are mostly done through the bank. Maintaining a bank cash book helps minimize misuse and misappropriation of cash.
2.Concept and Definition
Bank cash book is a subsidiary ledger used to control cash in government offices. It is also called a multi-columned ledger containing seventeen columns under five different accounts: Cash, Bank, Budget Expenditure, Advance, and Miscellaneous. It is prepared based on journal vouchers under AGF No. 5 format.
2.Specimen of Bank Cash Book
| Date | Ref.N | Particulars | Cash Dr | Cash Cr | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | A/c No | Misc Dr | Misc Cr | Remarks |
|---|
(Fill the table with transactions as needed)
3.Explanation of Columns
1.Date – Date of transaction.
2.Reference number – Serial number/code of journal voucher.
3.Particulars – Brief narration of transaction.
4.Cash Dr – Cash or cheque received.
5.Cash Cr – Payment made in cash.
6.Bank Dr – Cash deposited or bank receipt received.
7.Bank Cr – Payment made through cheque.
8.Cheque number – Number of cheque issued.
9.Balance – Current bank balance after each transaction.
10.Budget Head No. – Head/subhead number of budgeted transaction.
11.Budget expenditure – Amount of budget expenditure including advance.
12.Advance given – Amount of advance paid.
13.Advance cleared – Amount of advance cleared.
14.Miscellaneous account – Code number for miscellaneous transaction.
15.Misc Dr – Debit amount of miscellaneous account.
16.Misc Cr – Credit amount of miscellaneous account.
17.Remarks – Additional information including advance clearance.
4.Objectives of Bank Cash Book
1.Maintain systematic record of cash and banking transactions.
2.Control cash and minimize misuse.
3.Provide financial information for reports.
4.Facilitate estimation of cash requirement.
5.Disclose positions of cash, bank balance, budget expenditure, advance, and miscellaneous transactions.
5.Importance of Bank Cash Book
1.Provides effective control over cash.
2.Estimates cash requirements.
3.Supplies financial information.
4.Detects and prevents errors.
5.Supports transfer of responsibility.
6.Types of Accounts under Bank Cash Book
1.Cash Account – Two columns: debit for receipts, credit for payments.
2.Bank Account – Four columns: debit, credit, cheque number, balance; debit for receipts, credit for payments.
3.Budget Expenditure Account – Includes budget head number and amount, includes advances until clearance.
4.Advance Account – Two columns: advance given and advance cleared.
5.Miscellaneous Account – Three columns: account number, debit, credit; includes petty cash, loans, tax, provident fund.
7.Points to Consider While Preparing Bank Cash Book
1.Prepare journal vouchers for all transactions.
2.Identify the type of account for each transaction.
3.Post transactions chronologically.
4.Debit in JV → debit in bank cash book; credit in JV → credit in bank cash book.
5.Advance given affects budget expenditure, advance, and bank accounts.
6.Clear advance by showing actual expenditure in budget expenditure and advance cleared in bracket.
7.Miscellaneous transactions go to the miscellaneous account.
8.Transactions not affecting cash/bank are not posted.
9.Follow double entry system.
10.Prepare trial balance at month-end.
8.Posting of Transactions
General/Budgeted Transaction Example:
Issued cheque Rs. 5,000 for office supplies.
| Date | Ref.N | Particulars | Cash Dr | Cash Cr | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | A/c No | Misc Dr | Misc Cr | Remarks |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-04-07 | Issued cheque for office supplies | 5,000 | 5,000 |
Advance Transaction Example:
Issued cheque Rs. 10,000 to Mr. Goyal for furniture advance.
| Date | Ref.N | Particulars | Cash Dr | Cash Cr | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | A/c No | Misc Dr | Misc Cr | Remarks |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-04-09 | Issued cheque to Mr. Goyal as advance | 10,000 | 29311 | 10,000 |
Advance Clearance Example:
Mr. Goyal returns Rs. 10,000
| Date | Ref.N | Particulars | Cash Dr | Cash Cr | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | A/c No | Misc Dr | Misc Cr | Remarks |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-04-10 | Advance cleared by returning amount | 10,000 | 29311 | 10,000 | (10,000) |
Miscellaneous Transaction Example:
Establish petty cash fund Rs. 5,000
| Date | Ref.N | Particulars | Cash Dr | Cash Cr | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | A/c No | Misc Dr | Misc Cr | Remarks |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-04-16 | Petty cash fund established | 5,000 | 5,000 | 5,000 |
9.Trial Balance
| S.N | Accounts | L.F | Debit Rs | Credit Rs |
|---|---|---|---|---|
| 1 | Cash Account | 2,30,000 | ||
| 2 | Bank Account | 1,12,000 | ||
| 3 | Budget Expenditure | 1,12,000 | ||
| 4 | Advance Account | 25,000 | ||
| 5 | Miscellaneous Account | 96,000 | ||
| Total | 3,67,000 | 3,42,000 |
10.Closing of Bank Cash Book
1.Monthly Closing – Total all columns except bank balance to get financial info; prepare trial balance.
2.Yearly Closing – Close all accounts, prepare closing voucher, submit reports to central office.
Important Questions
Q1
The following are the financial transactions of District Education Office, Janakpur for the month of Shrawan 207:
a) Shrawan 1 – Received a bank order for initial imprest fund equal to one sixth of total budget expenditure Rs. 18,00,000 of last fiscal year.
b) Shrawan 3 – Issued a cheque of Rs. 20,000 for purchase of office supplies.
c) Shrawan 7 – Issued a cheque of Rs. 25,000 in favour of Section Officer, Mr. Rajan Kumal for purchase of office furniture.
d) Shrawan 10 – Issued a cheque of Rs. 1,000 for establishment of petty cash fund in favour of Accountant, Miss Devika.
e) Shrawan 18 – Mr. Rajan Kumal presented a bill of Rs. 25,000 after purchasing furniture and his advance was cleared.
f) Shrawan 24 – Out of total salary of the month Rs. 1,32,000 including government contribution to provident fund and dearness allowance of Rs. 40,000, distributed by cheque after deducting Rs. 24,000 for provident fund, Rs. 15,000 for provident fund loan and Rs. 2,000 for income tax.
g) Shrawan 25 – The deducted amounts were deposited into concerned offices through cheque.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-04-01 | Bank order received for revolving fund release | 3,00,000 | 3,00,000 | |||||||||
| 2074-04-03 | Issued cheque for purchase of office supplies | 20,000 | 2,80,000 | |||||||||
| 2074-04-07 | Furniture purchased advance given to Section Officer, Mr. Rajan Kumal | 25,000 | 29311 | 2,55,000 | 25,000 | |||||||
| 2074-04-10 | Issued cheque for establishment of petty cash fund | 1,000 | 2,54,000 | 1,000 | ||||||||
| 2074-04-18 | Mr. Rajan Kumal’s advance cleared | 29311 | 2,54,000 | (25,000) | ||||||||
| 2074-04-24 | Issued cheque for distribution of salary and allowance | 1,31,000 | 21111 | 1,23,000 | ||||||||
| 2074-04-25 | Deducted amounts deposited into concerned offices through cheque | 41,000 | 21113 | 82,000 |
Q2
District Education Office, Biratnagar transactions for month of Bhadra 207:
a) Bhadra 1 – Received Rs. 2,50,000 as bank order for office revolving fund.
b) Bhadra 5 – Issued cheque Rs. 30,000 for computer equipment.
c) Bhadra 8 – Issued cheque Rs. 10,000 to accountant for petty cash.
d) Bhadra 12 – Paid advance Rs. 50,000 to Section Officer for office renovation.
e) Bhadra 20 – Advance of Rs. 50,000 cleared after submission of bills.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-05-01 | Bank order received for office revolving fund | 2,50,000 | 2,50,000 | |||||||||
| 2074-05-05 | Issued cheque for computer equipment | 30,000 | 2,20,000 | |||||||||
| 2074-05-08 | Issued cheque for petty cash | 10,000 | 2,10,000 | 10,000 | ||||||||
| 2074-05-12 | Advance paid to Section Officer for renovation | 29312 | 2,10,000 | 50,000 | ||||||||
| 2074-05-20 | Advance cleared by submission of bills | 29312 | 2,10,000 | (50,000) |
Q3
District Health Office, Kathmandu transactions for month of Ashwin 207:
a) Ashwin 2 – Received bank order Rs. 3,00,000 for initial fund.
b) Ashwin 6 – Issued cheque Rs. 40,000 for medical supplies.
c) Ashwin 10 – Petty cash issued Rs. 5,000.
d) Ashwin 15 – Advance Rs. 20,000 paid to procurement officer.
e) Ashwin 22 – Advance cleared Rs. 20,000.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-06-02 | Bank order received for initial fund | 3,00,000 | 3,00,000 | |||||||||
| 2074-06-06 | Issued cheque for medical supplies | 40,000 | 2,60,000 | |||||||||
| 2074-06-10 | Issued petty cash | 5,000 | 2,55,000 | 5,000 | ||||||||
| 2074-06-15 | Advance paid to procurement officer | 29313 | 2,55,000 | 20,000 | ||||||||
| 2074-06-22 | Advance cleared | 29313 | 2,55,000 | (20,000) |
Q4
District Education Office, Pokhara transactions for month of Kartik 207:
a) Kartik 1 – Received bank order Rs. 2,00,000 for office revolving fund.
b) Kartik 4 – Issued cheque Rs. 25,000 for stationery purchase.
c) Kartik 8 – Issued cheque Rs. 15,000 as advance to Section Officer for furniture.
d) Kartik 15 – Petty cash established Rs. 3,000.
e) Kartik 20 – Advance cleared Rs. 15,000 after submission of bills.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-07-01 | Bank order received for revolving fund | 2,00,000 | 2,00,000 | |||||||||
| 2074-07-04 | Issued cheque for stationery purchase | 25,000 | 1,75,000 | |||||||||
| 2074-07-08 | Advance paid to Section Officer for furniture | 29314 | 1,75,000 | 15,000 | ||||||||
| 2074-07-15 | Petty cash fund established | 3,000 | 1,72,000 | 3,000 | ||||||||
| 2074-07-20 | Advance cleared | 29314 | 1,72,000 | (15,000) |
Q5
District Education Office, Bhaktapur transactions for month of Mangsir 207:
a) Mangsir 2 – Received bank order Rs. 4,00,000 for office fund.
b) Mangsir 6 – Issued cheque Rs. 50,000 for furniture purchase.
c) Mangsir 10 – Petty cash Rs. 10,000 issued.
d) Mangsir 15 – Issued cheque Rs. 30,000 as advance for office renovation.
e) Mangsir 25 – Advance cleared Rs. 30,000.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-08-02 | Bank order received for office fund | 4,00,000 | 4,00,000 | |||||||||
| 2074-08-06 | Issued cheque for furniture purchase | 50,000 | 3,50,000 | |||||||||
| 2074-08-10 | Petty cash issued | 10,000 | 3,40,000 | 10,000 | ||||||||
| 2074-08-15 | Advance paid for office renovation | 29315 | 3,40,000 | 30,000 | ||||||||
| 2074-08-25 | Advance cleared | 29315 | 3,40,000 | (30,000) |
Q6
District Education Office, Lalitpur transactions for month of Poush 207:
a) Poush 3 – Received bank order Rs. 3,50,000 for initial fund.
b) Poush 7 – Issued cheque Rs. 60,000 for office supplies.
c) Poush 12 – Advance paid Rs. 25,000 to Section Officer for training.
d) Poush 18 – Petty cash Rs. 7,000 established.
e) Poush 22 – Advance cleared Rs. 25,000.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-09-03 | Bank order received for initial fund | 3,50,000 | 3,50,000 | |||||||||
| 2074-09-07 | Issued cheque for office supplies | 60,000 | 2,90,000 | |||||||||
| 2074-09-12 | Advance paid to Section Officer for training | 29316 | 2,90,000 | 25,000 | ||||||||
| 2074-09-18 | Petty cash fund established | 7,000 | 2,83,000 | 7,000 | ||||||||
| 2074-09-22 | Advance cleared | 29316 | 2,83,000 | (25,000) |
Q7
District Education Office, Dhangadhi transactions for month of Magh 207:
a) Magh 1 – Received bank order Rs. 2,50,000 for office revolving fund.
b) Magh 5 – Issued cheque Rs. 35,000 for furniture.
c) Magh 10 – Issued cheque Rs. 5,000 for petty cash.
d) Magh 15 – Advance Rs. 15,000 paid to Section Officer.
e) Magh 20 – Advance cleared Rs. 15,000.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-10-01 | Bank order received for revolving fund | 2,50,000 | 2,50,000 | |||||||||
| 2074-10-05 | Issued cheque for furniture | 35,000 | 2,15,000 | |||||||||
| 2074-10-10 | Issued petty cash | 5,000 | 2,10,000 | 5,000 | ||||||||
| 2074-10-15 | Advance paid to Section Officer | 29317 | 2,10,000 | 15,000 | ||||||||
| 2074-10-20 | Advance cleared | 29317 | 2,10,000 | (15,000) |
Q8
District Education Office, Birgunj transactions for month of Falgun 207:
a) Falgun 1 – Received bank order Rs. 5,00,000 for office fund.
b) Falgun 6 – Issued cheque Rs. 80,000 for office furniture.
c) Falgun 10 – Petty cash Rs. 10,000 established.
d) Falgun 15 – Advance Rs. 40,000 paid to Section Officer.
e) Falgun 25 – Advance cleared Rs. 40,000.
Required: Posting into bank cash book
| Date | Ref.N | Particulars | Bank Dr | Bank Cr | Ch.No | Bal | B.H.N | Amt | Given | Cleared | Misc Dr | Misc Cr |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2074-11-01 | Bank order received for office fund | 5,00,000 | 5,00,000 | |||||||||
| 2074-11-06 | Issued cheque for office furniture | 80,000 | 4,20,000 | |||||||||
| 2074-11-10 | Petty cash fund established | 10,000 | 4,10,000 | 10,000 | ||||||||
| 2074-11-15 | Advance paid to Section Officer | 29318 | 4,10,000 | 40,000 | ||||||||
| 2074-11-25 | Advance cleared | 29318 | 4,10,000 | (40,000) |
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