25.

CASH BOOK
The topic entails:
- Explaining meaning of cash book and the types of transactions recorded
in the cash book.
- Discussing the purpose of a cash book
- Types of cash book when used and format
- Explain the concept contra-entry.
- Preparation of the various types of cash books.

1. The following cash book relates to Baraka enterprises

Date Details Cash Bank Date Details Cash Bank

2004 2004
Jan 1 Bal. b/d 10,000 Jan Bal b/d 15,000
Jan 10 Sales 18,500 1 Bank 12,000
Jan 15 Cash 12,000 Jebet 6,000
Bal. c/d 3,000 Jan Bal. c/d 10,500
28,500 15,000 15 28,500 15,000

Jan
20

2. State the transactions that took place on the above cashbook on the following
dates
Jan 1
Jan 10
Jan 15
Jan 20
3. Identify four uses of the cash book.

4. The following transactions took place in the business of Kiprono during the
first week of Jan.
2003
Jan 1st Balance brought down
Cash = Kshs12,000.00
Bank= Kshs.35,000
Jan 2nd Sold an old piece of furniture for Kshs.8,000 cash
Jan 3rd Cash sales Kshs.10,000 paid directly to the bank
Jan 4th Purchased goods worth Kshs.20,000 , paid Kshs.5,000
cash and the balance
to be paid later
th
Jan 5 Kiprono took cash Kshs.1,500 for personal use
Jan 6th Bought goods worth Kshs.15,000 paying partly by cheque
Kshs.10,000 and

PSE
 the balance in cash
Required: Prepare Kiprono’s two column cash book for the month of
January and balance it of
5. The following transactions relate to Kabela Traders for the month of Dec.
2004.
2nd Dec cash sales shs.30,000
8th Dec. Banked shs.15,000
10th Dec. withdrew shs.10,000 from bank for office use
Prepare a cash book

6. Ondiko Traders had Kshs. 100000 cash in hand and Kshs.243000 cash at bank
during the month
of March 2008. The following transactions took place in that month:
March 3 – paid rent Kshs.5000 cash
March 11- cash sales Kshs.14000
March 14-purchased equipment worth Kshs. 37000 paying by cheque
March 20- Deposited shs. 30000 into bank from cash till
March 31- Took Kshs. 10000 cash for personal use
Prepare Ondiko traders’ two- column cash book for March 2008

7. Record the following transactions in a double column cash book of JABER

traders and balance
it off as at 12th June 2009:-

June 1: Balances : Cash shs.5500

Bank shs.18000 (Cr)
June 3: Purchases shs.4500 was made being paid by cheque shs.4000,
balance later
June 7: Sold goods for cash shs.6000
June 12: took shs.7000 to bank
June 13: Credit purchases from Ombogo shs.3000
June 14: paid Alweny shs.1000 cash
8. State the meaning of the following terms as used in a cash book:
a) Contra- entry

b) Folio column

PSE
9. The following information was obtained from Laban traders during the month
of February 2010
Feb. 4: goods returned by Otange traders amounted to kshs. 4 000, credit note
no.214
8: Akamba traders returned goods worth kshs. 15 000 and was issued
with credit note no.316
15: received goods worth ksh.6,000 from punch line traders. Credit note
510
28: goods returned by Viva traders’ kshs. 9 600. Credit note no. 440
Prepare the relevant journal for Laban traders

10. Omondi had the following transaction in the year ending 30th June 2008:-

Shs
st
Debtors as at 1 July 2007 113 000
Cash received from debtors in the year 651 500
Debtors as at 30th June 2008 138 500
Bad debts in the year 1 700
Discounts allowed in the year 2 600
Cash sales 800 000
Calculate the total sales for the year

11. Give three documents from which information entered in cash receipts and
cash payments
Journals may be obtained

12. The following information was available for the year 2009:-
2009 Accrued rent Prepaid rent
Jan 1 Shs.20,000 Shs.40,000
Dec 31 Shs.36,000 Shs.3400
Rent expense paid in the course of the year amounted to shs.121,200.
Prepare the rent account and show the amount charged to profit and loss
account

25. -CASH BOOK

1. On March 2007, Doris had cash in hand shs.87,000 and cash at bank
shs.25,000. During this
month, the following transactions took place:
March 2nd : Cash sales shs.60,000
3rd: Paid salaries shs.101,500 by cheque

PSE
 7th : Received a cheque of shs.76,000 from Henry after allowing a
cash discount of 5%
13th: Bought office furniture by cheque shs.86,000
17th: Settle marital account for shs.34,200 in cash having deducted
shs.8,000 cash discount
20th: Received a cheque for shs.165,000 in respect for cash sales
22nd: Paid wages shs.25,000 in cash
24th: Withdrew shs.32,000 for bank for office use
25th : Withdrew shs.4,000 cash for personal use
29th: Received shs.17,000 cash form Alvin in settlement of his account
less shs.1000
cash discount
st
31 : Deposited all the money into the bank except shs.24,600
Required: Prepare a three column cash book duly balanced

2. Enter the following transactions in the petty cash book of Makavale stores for
the month of
July 2009 using the following analysis columns: Telephone and postage;
office
stationery, traveling expenses and office expenses. The business operates the
petty cash book
on an imprest system of 4000/= replenished on weekly basis
July 1st – received a cheque from the cashier to start the imprest
1st – paid for taxi hire 250/= and 130/= for office cleaning
2nd – bought postage stamps for 210/= and a ball of string for use
in the office 100/=
3rd – postage of a parcel cost 100/= and paid a telephone bill
900/=
4th – purchased envelopes for 150/= and one ream of
photocopying paper 500/=
5th – paid for bus fare 500/= and made a telephone call costing
50/=
6th – purchased a window cleaning cream for 250/= and bus fare
200/=
8th – Received a cheque to replenish the imprest
8th – bought various office stationary for 400/=

PSE
 9th – purchased postage stamps for 210/= and paid 950/ telephone
bill
10th – paid train fare 600/= and taxi fare 250/=
11th – paid for office cleaning 150/=
12th – purchased two reams of writing paper 600/= and office
dusters 300/=
14th – obtained a cheque from the cashier to replenish the imprest
Required:. Prepare the petty cash book for the two weeks

3. Mumji Enterprises maintain a petty cash book on an imprest system with

weekly float of Kshs.40,000.
The following information relates to the week ended 7th June 2009:-
1st cash in hand was Ksh.7000
1st receives reimbursement from the chief cashier
1st paid wages Ksh.5500, bus fare Ksh.1250,Sugar sh.220 and stamps
shs.150
2nd Bought stationery Ksh.5000
3rd Paid postage shs.200
4th Bought tea leaves shs.80 and shs.2000 for type writer repair
5th Bought coffee shs.340 and milk shs.800
7th Bought a ribbon for type writer shs.500, stencils shs.350 and bus
fare shs.900
Required: - Prepare a petty cash book duly balanced on 7th June with the
following columns.
Traveling, Wages, Stationary, Postage, tea and miscellaneous

4. The following transactions relate to Furaha traders for the month of July,2008

July 1 : Balance brought down cash sh.16,250 and Bank Shs.19,847

July2 : Sold goods worth Shs.1,348 to Patel and received a calculator
in exchange
July 5 : Paid transport by cheque Shs.2,000
July 6 : Issued a cheque to Kerio Traders setting an invoice for
Shs.10,000 deducting 2%

PSE
 cash discount
July 10: Transfer Shs.15 000 from cash till to bank
July 12: Sold goods for cash Shs.12,000 less 2% cash discount
July 13: Sold goods to Onyango on credit worth Shs.15, 000
July 14: The owner of the business withdrew Shs.3000 in cash to buy
a present for his
daughter
July 16 : Received a cheque from Kuria Shs.2,500 less 5 % cash
discount
July 22 : Bought furniture from Babu Traders on credit worth
Shs.16,500 and cash
discount of 10% if payment is made within 2 weeks
July 24: Withdrew cash from bank for office use Shs8,000
July 26: The owner brought into the business Shs.9,000 cash
July 27: Issued a cheque to Babu Traders for amount due
July 28: Sold goods to Kuria worth Shs.5,000 for Shs.3,800 and
received payment by
cheque
July 30: Banked all cash and remained with Shs.100 in the cash till
Required; Prepare Furaha Traders three column cash book for the month
of July, 2008
5. During the month of March 2010 the petty cashier of Nyangija distributors
made the following payment after receiving an imprest of shs12, 000 from the
general cashier.
March 3 traveling 3500
March 6 office expenses 1000
March 8 postage 1200
March 15 staff tea 800
March 19 stationery 2000
March 22 office expenses 800
March 24 staff tea 1000
March 26 sundry expenses 700
March 31 F. Benson a creditor 900

PSE
 Required : Using the analytical columns below prepare a petty cash book of
Nyangija distributors
 Traveling
 Office expenses
 Postage
 Stationery
 Staff tea
 Sundry expenses
 Ledger accounts

6. A petty cashier of Mugirango traders operates his petty cash book on an

imprest system
of sh. 2500. On I February 2009, he had cash in hand of Sh. 500 and was
reimbursed the
difference by the main cashier to restore his cash float. The following
transactions took
place during the same month of February 2009:
Feb 2nd paid taxi fare sh.150 and wages sh250
4th Bought five reams of paper for sh25 each and stamps for sh.30
7th Paid wages sh.250 and bought envelopes for sh.40
20th Bought tea for staff sh.70 and paid for water bills sh.56
28th Paid for electricity sh.80 and stamps sh.40
Required: Prepare a petty cash book using the following analysis columns;
• Wages
• Traveling
• Stationery
•Postage
• Miscellaneous

PSE