1.

Explain : Contra transaction

Answer»

‘Contra transaction’ means such financial transaction, in which cash and bank, both the accounts get affected.

  • Contra transaction is recorded on both the side of cash book.
  • Generally, contra transactions are of two types : (1) Cash deposited in the bank and (2) Cash withdrawn from the bank.
  • Contra transaction affects only ‘cash’ and ‘bank’ account and no other accounts. Hence, the positing of ‘Contra transaction’ is not required. Further, ‘C’ will be written in the L. F. No. column of cash book on both the sides.


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