Page 11 - NOTES- CASH BOOK

Recording of Transactions - II 105

In case of an A/c payee only crossing, the amount of the cheque can be
deposited only in the account of the person whose name appears on the cheque.
When the name of the bank is written between two parallel lines, it becomes a
special crossing and the payment can be made only to the bank whose name
has been written between the two lines.
Though this is rarely done, a cheque can be transferred by the payee (the
person in whose favour the cheque has been drawn) to another person, if it is
not crossed A/c payee only. A bearer cheque can be passed on by mere delivery.
An order cheque can be transferred by endorsement and delivery. Endorsement
means the writing of instructions to pay the cheque to a particular person
and then singing it on the back of the cheque.

& Co. Not Negotiable A/c Payee Only State Bank of India, New Delhi

Fig. 4.4 : Types of crossing
When the number of bank transactions is large; it is convenient to have a
separate amount column for bank transactions in the cash book itself instead of
recording them in the journal. This helps in getting information about the position
of the bank account from time to time. Just like cash transactions, all payments
into the bank are recorded on the left side and all withdrawals/payments through
the bank are recorded on the right side. When cash is deposited in the bank or
cash is withdrawn from the bank, both the entries are recorded in the cash
book. This is so because both aspects of the transaction appear in the cash
book itself. When cash is paid into the bank, the amount deposited is written on
the left side in the bank column and at the same time the same amount is entered
on the right side in the cash column. The reverse entries are recorded when cash
is withdrawn from the bank for use in the office. Against such entries the word
C, which stands for contra is written in the L.F. column indicating that these
entries are not to be posted to the ledger account.

2018-19