Transaction recorded both on debit and credit side of cash book is known as.................

Contra entry

The correct answer is option 2- Contra entry.

A contra entry refers to a specific type of entry that involves transactions where both sides of the entry are recorded within the same account.

Entries in respect of cheques received should be made in the bank column of the cash book. When a cheque is received, it may be deposited into the bank on the same day or it may be deposited on another day. In case, it is deposited on the same day the amount is recorded in the bank column of the cash book on the receipts side. If the cheque is deposited on another day, in that case, on the date of receipt it is treated as cash received and hence recorded in the cash column on the receipts side. On the day of deposit to the bank, it is shown in the Bank Column on receipt (Dr.) side and in the Cash Column on the payment (Cr.) side. This is a contra entry.