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‘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• Generally, contra transactions are of two types : (1) Cash deposited in the bank and (2) Cash withdrawn from the bank.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.

Cash book is a type of subsidiary book in which all cash transactions are recorded. Transactions relating to cash, bank and cash discount are recorded in the cash book.

Cash book is a separate book of the subsidiary books. It works as a ledger and as a journal both. Cash receipts and payment are recorded in the cash book and at the end of the given period cash balance as well as bank balance can also be known from cash book.

With the prior arrangement with bank, when a trader is able to withdraw more amount than the deposited amount, the difference of amount is known as Bank overdraft. In other word, if the total of bank column of payment side of cash book is more than the total of bank column of receipt side, then it is known as Bank overdraft.

• Bank overdraft is liability for business.
• Interest on bank overdraft is an expense for business.
• Bank overdraft account always shows credit balance.
• Current account holder gets the facilities of bank overdraft.

With the help of Bank book,

1. Transactions can be easily reconciled with pass s book or bank statement.
2. Information regarding bank balance or bank overdraft can be known.

When the trader keeps more than one account in a bank or keeps accounts in more than one bank, Bank book is maintained to record the bank transactions easily.

Since bank account is a personal account, it can have debit balance or credit balance, when the total of receipts side of bank column is greater than the total of payment side, the difference (i.e., balance) is called ‘Debit balance’ (i.e., Bank balance). This balance is shown on the payment side as ‘By balance carried forward’.

When the total of payments side of bank column is greater than the total of receipts side, the difference (i.e., balance) is called ‘Credit balance’ (i.e., Bank overdraft). This balance is shown on the debit side of Cash book (receipts side) under bank column as ‘To balance carried forward’.

An account book in which businessman records only banking transactions entered with different banks is called Bank book.

The book kept for keeping a record for the payment of a small expenses is known as Petty cash book.

Petty cash book is a part of cash book. The book (cash book) kept by the petty cashier for keeping a record for payment of petty or small expenses is known as Petty cash book.

Petty cashier prepares the petty cash book, in which separate columns are maintained for various petty or small expenses to be paid by the petty cashier. So that the information of various types of expenses (and total amount) paid by the petty cashier is available.

Petty cash book can be prepared in two types :(1) Simple petty cash book and (2) Petty cash book on Imprest system.

There are three parties in the cheque :

1. Drawer of the cheque (Account holder),
2. Drawee of the cheque (Bank) and
3. Receiver of money.

Bank Book : Majority of cash transactions are done through bank in the present age. When business has account in more than one bank or in a one bank they have more than one accounts, in that case to record the transactions with the bank, a book is prepared which is known as Bank book. Business has an account in more than one bank or in a bank more than one account is there, in that circumstances to get the necessary information quickly and to tally the balances, a bank book having different columns is kept by the businessman.

Illustrations : If the accounts are in the different banks then in the different columns name of bank is to be written, e.g., Dena Bank, Canara Bank, SBI. But if in a one bank more than one accounts are there, then in the different columns A/c no. 1,2,… are to be written. The structure and style of bank book is like the cash book only.

Utilities (Importance) : Utilities of the bank book are as under :

• Easily recorded : The transactions with the banks can be easily recorded, especially, when the volume of transactions through the bank is more.
• Reconciliation : With the help of bank book transactions can be easily reconciled with pass book or bank statement.
• Bank balance : At any given point of time, the bank balance of various bank accounts can be known.
• Liquidity : A constant watch on the different financial transactions entered into through different bank current accounts by the business organisation is possible. With the help of which liquidity of the business can be maintained.

Imprest petty cash book: In this type of petty cash book, some fixed amount is given to the petty cashier, considering the maximum sundry expenses that would have to be paid. This amount with the petty cashier should not be more than the predecided amount, at any time. At the end of this fixed period, the petty cashier gives accounts for the amount spend to the head cashier, who examines these accounts and pays the petty cashier the total amount expended. Thus, the petty cashier has a fixed amount (imprest) at the beginning of every specified period.

1. The full name of NEFT Is National Electronic Fund Transfer.
2. The full name of RTGS is Real Time Gross Settlement.

Above both services are provided to the customer by participating banks in this scheme. Banks charge nominal amount for this service.

Correct option is (d) Trade discount