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Date: October 25, 2022
types of cash book: What is Cash Book? Types of Cash Book

cash receipts journal

The description of the corresponding transaction type is recorded under this heading. For example, to record a cash sales transaction, one will write “sales” under the particular column. Subsequently, the cash book balances are compared against the bank statements and reconciled in case of discrepancies.


The total amount column is followed by number of columns for recording the heads of items which are most common in the business enterprise. The last, but not the least, cash book is to be balanced. As already stated, a separate cash account in ledger is not opened when a cash book is maintained.

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January-1 Opening balances of cash and bank of Rs 30,000 and Rs 160,000 respectively. Enter the following transactions in the cash book of Square Limited. Both Cash book and Passbook are used to record financial transactions. The three column cashbook is sometimes referred to as the triple cashbook, treble cashbook or the 3 column cashbook.

Because most businesses now deal in checks as a result of improvements in the financial sector, the inclusion of a deposit entry in a cash journal aids in the accurate comprehension of payments. All petty payments are to be classified into different heads and different columns are maintained. Simple cash book contains only one amount column on each side for recording cash receipts and cash payments. Maintaining detailed records of your firm’s cash transactions in a cash book is extremely vital. In addition to serving as an important accounting record, it helps companies in keeping track of their financial position at all times.

In the particular column heads of the items are to be mentioned. In ‘V .No’ column, voucher number of the transactions are recorded. ‘L.F.’ column shows where the posting of these items have been made in respective ledgers.

Format of Cash Book | Accounting

However, with numerous aspects to consider, monitoring your payables and documenting all the financial activities can be an exceptionally overwhelming undertaking. If you are looking forward to streamlining your daily financial workflows, a cash book would be a perfect choice. This document allows you to capture daily cash flows and organize your ledger entries. A cash account with a brokerage requires that all transactions be payable with funds available in the account at the time of settlement. Chaitra-24 Deposited the remaining cash balance except Rs 2,000 into the bank.

  • January-1 Opening balances of cash and bank of Rs 30,000 and Rs 160,000 respectively.
  • At the end of the period, the petty cashier submits to the head cashier a statement of expenditures that are incurred by him.
  • The balance of the cash book and cash of a cash box must be equal.
  • This ensures the accuracy of the cash book and detects »misuse or misappropriation of cash.

The most popular formats are the two and three column formats as detailed below. Follows the same procedure in posting transactions to ledger from cash book. Every business organization, whether a small entity or a large company, needs to maintain and prepare the records of its daily transactions. Similarly, while making a cash payment for any expense or purchase, the company receives a cash memo known as payment voucher, which is recorded under the V.No. The multi-column cash book having multiple columns on both the sides of the cash book. For debit posting ledger folio Nos. of the corresponding credit accounts are given in the ‘L.F.

A cash book is a separate ledger in which cash transactions are recorded, whereas a cash account is an account within a general ledger. A cash book serves the purpose of both the journal and ledger, whereas a cash account is structured like a ledger. Details or narration about the source or use of funds are required in a cash book but not in a cash account. If a cash book is not maintained and cash transactions aren’t recorded in the journal, unnecessary time and labor would be required to debit and credit the cash account for every cash transaction. Some businesses maintain cash books instead of cash receipts journals and cash payments journals. The triple column cash book is a compact form of cash book in which all the three columns, i.e., cash, bank and discount, are included.

This cash book is usually maintained by organizations where it is a general practice to give or receive discounts. The main difference between a cash book and a journal is that a cash book tracks payments and receipts. A cash receipts journal tracks all financial transactions. In order for a cash book to be accurate and up-to-date, it is important to record all transactions as soon as they happen. If money is received on Monday, but not recorded until Wednesday, the cash book will be inaccurate. As cash book is another kind of ledger, it has double entry in the cash book.

This type of cash book is usually prepared by the business. A detailed cash book has its own unique way of recording transactions. Keep reading to learn which type would make the most sense for you or your business. When recording transactions in a cash book, many things need to be considered. These include the date, the description, the amount and more.

Benefits of a Cash Book

A cash book is set up as a subsidiary to the general ledger in which all cash transactions made during an accounting period are recorded in chronological order. It is also much faster to access cash information in a cash book than by following the cash through a ledger. Cash book is the books of original entry which records the cash receipts and cash payments incurred during a particular period. All receipts and payments whether is received through Cheque, Cash, Bank Transfer, Postal order, Bank overdraft are recorded in the cash book. A cash receipts journal records all the money received by the business, such as cash sales and customer payments.


This is since all monetary receipts are documented in ageneral ledger. It is similar to the chequing account kept in the logbook. In reality, if a separate cash book is kept, no need to include a cash flow in the journal.

Difference between a Cash Book and a Pass Book

Sharma Sports Goods Co. follows the imprest system of petty cash under which, Rs 6,000 was handed over to the petty cashier as on 1st March 2011. The cash book may become very bulky and the cashier may be overburdened. Applying the rule of ‘management by exception’ the main cashier should not be disturbed for small and petty items. In the ‘Particular’ column, the nomenclature of the accounts, from where cash is received or paid, gets recorded.

column cash books

Column’ of the debit side and for credit posting ledger folio Nos. of the corresponding debit accounts are given in the ‘L.F. For a cash transaction one of the accounts must be cash account. A cash journal is named so since the financial or bank operations are documented in sequential sequence when they are occurring. Its layout is comparable with the ledger, and the amount is drawn out similarly to the ledgers. As a result, the cash journal serves as both a book and a ledger.

Meaning of cash book for businesses

This advanced model is inclusive of an extra https://1investing.in/ on each side of the document. With the additional column, a 3-column cash book allows you to document cash discounts resulting from borrowing as well as discounts received from creditors. Unlike the above model, the 2-column cash book features an additional column which is generally used for documenting bank transactions. When goods are sold in Cash, the company have to issue a Cash memo to the customer against cash receipts from the customers. In this respect, the company has to print out a cash memo book in the duplicate page with a pre-numbered.

  • The petty cashier starts his petty cash book on 1st February with a cash balance of Rs. 5000.
  • Because the cash book is updated continuously, it will be in chronological order by transaction.
  • Book refers to a compiled record of the information available in the written or printed form.
  • Baisakh-30 Mr. Sabin brought additional capital of Rs 5,000 and deposited into the bank.

In certain businesses, cash books are revised frequently. A cash journal’s most striking characteristic is that it can’t have an outstanding balance. If a transaction involves both cash and bank accounts, it is entered on both sides of the cash book, one in the cash column and other in the bank column, though on opposite sides. There are is called contra entries and word ‘C’ is indicated against that item in L.F. Columns e.g. when cash is withdrawn from the bank, it is recorded on the debit side in cash column and on the credit side in the bank column. Similarly, when cash is deposited with the bank, the amount is recorded on the debit side in bank column and on the credit side in the cash column.

Proper maintenance of the cash book influences the cashier’s morality, which refrains him from stealing cash. For all these features of the cash book, it is called a journal. Cash Book is a book in which an account is kept of the receipts and disbursements of money. If you are a business and you want to start using a bank cash book, you will need to speak with your bank. They will be able to provide you with the necessary forms and help you get started.

What is the difference between a cash book and a journal?

Any defalcation of money from the business can even be detected while verifying cash book. In Simple Words –Cash transactions are straightaway recorded in the Cash Book and on the basis of such a record, ledger accounts are prepared. But the Cash Book itself serves as the cash account and the bank account; the balances are entered in the trial balance directly. The Cash-Book is thus both a subsidiary book and a principal book.

‘Amount’ column shows the money value of the transactions. After knowing the rule for recording a transaction, it is essential for us to learn the procedure for recording the transactions in the simple cash book. It can be observed from the above format that the columns on ‘Receipts Side’ of the cash book are similar to the columns appearing on ‘Payment Side’. Apart from the main cash book, petty cash book may also be prepared to enter the petty expenses, i.e., expenses involving small amount. It functions as a subsidiary of the general ledger, as it entails both cash and bank accounting records. This type of cash-book is very simple because it is similar to the cash account.

Since it is types of cash book of cash and bank accounts, no posting for cash and bank accounts is necessary. Like other ledger accounts Cash Book is balanced at a regular interval . A day book-cum-ledger kept for making entry of the cash transactions as well as posting to the cash and bank accounts is called Cash Book. It is a unique book of account that combines journal and ledger. Cash Book is a journal for making primary entry of all cash transactions. A cash book is kept like a ledger account, with receipts entering the debit column and payments moving to the credit column.


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