Page 260 - Account 10

vi. In case of the posting of petty cash expenditures, it is recorded only at the time of
reimbursement.
vii. In case of advance given, it should be posted in three accounts which are bank A/c,
budget expenditure A/c and advance A/c.
viii. In case of advance clearance, it should be posted twice in the budget expenditure
account and advance cleared A/c. While posting in expenditure A/c, the amount of
real expenditure should be shown outside the bracket and the amount of advance
cleared should be shown inside the bracket.
ix. In order to check the numerical correctness (accuracy), a trial balance may be
prepared after preparing this book. The total amount should agree to assure its
accuracy. Otherwise, the difference of trial balance should be equal to the difference
between advance given and cleared.
x. The inter-head transfer of budget will not affect the budget release, cash and bank
accounts and, hence, it will not appear in the bank cash book. But the inter office
transfer of budget will be appeared in it as it affects the budget release, cash or bank
account for the time being, to both the offices.
xi. All the columns, which contain amount are totalled monthly except that of bank
balance and carried forward to the beginning of next month and finally annual
closing is made.

6. Preparation of Bank Cash Book
A bank cash book is based on the journal vouchers of the transactions. Thus, the
posting should be made according to the nature of goshwara primary entries. The process
of posting of the different types of journal vouchers are discussed below:
A. General Journal Voucher
General journal voucher refers to the actual expenditure, for which immediate
payment is made through the bank for the receipt of goods or services. The entry is,
Dr. B.E. (Budget head of expense)
Cr. Treasury Single Account (TSA)

Thus, the posting is made in the budget expenditure column i.e. amount is mentioned
without bracket and Cr. side of ‘bank A/c’ with the same value.

B. Advance Journal Voucher
Advance Journal voucher refers to the payment of amount through a bank to a
certain person/party for incurring the expenditure in the near future. It is the payment
before receiving the goods or services. Thus, until expenditure is made on the specified
heading, it is not regarded as budget expenditure. Thus, it should be entered twice-once
at the time of giving advance and the next at the time of clearing it.
While giving advance:
Dr. Person (advance for ........... (budget head)
Cr. Treasury Single Account (TSA)

Thus, the amount is posted in three places i.e. the budget expenditure A/c (openly,
without bracket), in the ‘given column’ of advance expenditure A/c and in the Cr. column
of bank A/c.

260 Aakar’s Office Practice and Accountancy - 10 Bank Cash Book 261