Mariam is a trader. On 1 March 20–2 the balances in her cash book were:

Cash $100 debit

Bank $494 credit

The following transactions took place in March 20–2:

March 4 Paid for repairs to office equipment by cheque, $293

7 Received a cheque from Nawaz, $110

11 Purchased motor vehicle paying by credit transfer, $5,130

13 Took $1,500 from the bank for personal use

19 Paid $286 to Anwar by credit transfer

21 Paid office expenses in cash, $67

27 Cash sales, $2,150

28 Paid wages in cash, $953

31 Paid all cash into bank except $150

a. Prepare Mariam’s cash book for March 20–2. Balance the book and bring down the balances on 1 April 20–2.

b. Explain the significance of the credit balance on the bank column on 1 March 20–2.

c. Explain why it is not possible to have a credit balance on the cash column.

d. Explain the term ‘contra’. Illustrate your answer with reference to an appropriate entry in the cash book in a.