A contra entry is an accounting entry that affects both the cash account and the bank account at the same time. The word 'contra' means 'opposite' or 'against'. In a double column (or three column) cash book, when one transaction is recorded on both the debit side and the credit side — one in the cash column and the other in the bank column — it is called a contra entry. Such entries are marked with the letter 'C' in the L.F. (ledger folio) column to show that both aspects are already recorded in the cash book and need not be posted to the ledger.
'Contra' means opposite or against.
A contra entry affects both the cash and bank columns at the same time.
It appears in a double (or three) column cash book.
It is marked with the letter 'C' in the ledger folio (L.F.) column.
The 'C' mark shows that the entry is not posted to the ledger again.
Examples: cash deposited into bank, and cash withdrawn from bank for office use.
Cash withdrawn for personal (drawings) use is NOT a contra entry.
A contra entry is a transaction in which both the debit and the credit aspects appear in the cash book itself — one in the cash column and the other in the bank column.
This happens because cash and bank are both recorded in the same cash book. So when money moves between cash and bank, only the cash book is affected, and the entry is recorded on both sides.
A contra entry is identified by the letter 'C' written in the ledger folio (L.F.) column on both the debit and credit sides. The 'C' shows that the transaction is a contra entry and is not posted to the ledger again, because both effects are already in the cash book.
The main transactions that create a contra entry are:
Cash deposited into the bank: • Bank column (debit side) increases. • Cash column (credit side) decreases.
Cash withdrawn from the bank for office use: • Cash column (debit side) increases. • Bank column (credit side) decreases.
Cheque received earlier and deposited into the bank on a later date (in some cases).
Note: Cash withdrawn from the bank for personal (drawings) use is NOT a contra entry, because it does not stay within cash and bank — it goes to the drawings account.
Example: ₹5,000 cash deposited into the bank.
In a double column cash book: • Debit side: Bank column → ₹5,000 (To Cash A/c), with 'C' in the L.F. column. • Credit side: Cash column → ₹5,000 (By Bank A/c), with 'C' in the L.F. column.
Since both the cash and bank columns are part of the same cash book, recording on both sides completes the double entry. That is why a contra entry is not posted again to the ledger — the 'C' mark shows this.
Key point: A contra entry arises only between cash and bank. It cannot occur in a single column cash book (which has only the cash column).
A contra entry is an accounting entry that affects both the cash account and the bank account at the same time. In a double column cash book, when a transaction is recorded on both the debit and credit sides — one in the cash column and the other in the bank column — it is called a contra entry. It is marked with the letter 'C' in the ledger folio column.
The main examples are: (1) cash deposited into the bank — the bank column is debited and the cash column is credited; and (2) cash withdrawn from the bank for office use — the cash column is debited and the bank column is credited. Both involve a movement of money between cash and bank only.
A contra entry is marked with the letter 'C' in the ledger folio (L.F.) column to show that both the debit and credit aspects of the transaction are already recorded in the cash book itself. Because both effects are in the cash book, the entry is not posted to the ledger again, and the 'C' indicates this.
No. Cash withdrawn from the bank for personal use is not a contra entry. It is treated as drawings, so it affects the drawings account, not just cash and bank. A contra entry occurs only when money moves between cash and bank for business purposes, such as withdrawing cash for office use.
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