Glossary
Contra entry
A single transaction that affects both the cash and bank columns of the cash book.
What it means
An entry recorded on both sides of the cash book because it moves money between cash and bank within the business.
Example
Paying office cash into the business bank account is a contra entry.
Why it matters
Recognising contras avoids double-counting money that has simply moved location.
In practice
A contra entry lives entirely inside the cash book. Both halves of the double entry sit in the same book, so it is marked with the letter C in the folio column. It usually records money moved between office cash and the bank account.
For example, the business pays RM700 of till cash into the bank. You credit the cash column and debit the bank column with RM700. The total money held has not changed, only its location. Because both entries are in the cash book, no separate posting to another ledger is needed.
Do not confuse this cash-book contra with the contra (set-off) entry used when a person is both a customer and a supplier. There, an amount owed in the sales ledger is set against an amount owed in the purchases ledger. That second type reduces two personal accounts, not the cash and bank columns.
If both kinds of contra are muddling you, one of our teachers can show each one side by side with a worked example. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 3.4 Control accounts (page 13).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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