Guide with Real-Life Contra Entry Example In Tally

 Welcome to our tally blog again\ today's post is all about the contra entry example in tally with a solution and Double Cash Book Format table.

These examples can help you to understand all the primary contra entries and how to solve these kinds of entries.

If you guys are learning tally then you should know about contra entry, how to solve contra entries problem, and how to use it in business.

what are contra entries?

Before starting the example let me tell you how to identify contra entry.

Entries	Is it Contra Entry?	Reasoning
Debit: Bank Account
Credit: Cash Account	Yes	It involves the transfer of cash from cash to the bank.

• Remember:-  Talking about the contra-entry rule, when two opposite accounts (both assets or both liabilities) are used, in which one account is debited and the other is credited, it is called contra-entry.

The upper table follows this rule.

So Let's check out the example:

contra entry example

Example:- On January 15, 2023, a business owner deposited $2,000 cash into the bank from the cash on hand.

Solution:

Debit: Bank Account ($2,000)

Credit: Cash Account ($2,000)

As it is clear from this entry money is transferred from a cash account to the bank account. It increases the bank balance and reduces the cash balance.

Now Take a look at Double Cash Book Format table:

Date	Particulars	LF	Cash Receipts	Cash Payments	Balance
01/01/2023	Opening Balance		$10,000		$10,000
15/01/2023	Contra Entry		$2,000		$12,000
31/01/2023	Closing Balance				$12,000

Where LF is  Ledger Folio (give the page number in a ledger)

In our example, you can clearly see that contra transaction on January 15, 2023. The cash receipt of $2,000 is recorded and the final balance increases to $12,000.

contra entry in the cash book

Date	Particulars	Voucher No.	Debit ($)	Credit ($)	Balance ($)
15/01/2023	Opening Balance	-	-	-	-
15/01/2023	Contra Entry	-	-	2,000	2,000
31/01/2023	Closing Balance	-	-	-	2,000

You can assign a Voucher No for reference and easier identification.

Conclusion

here in this post, we add a contra entry example in tally with the help of it you can understand all the concepts of contra entry in Tally so read it carefully.