What is cash book and types

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what is cash book and types

Kinds of Cash Books: Simple, Two Column, Three Column, Petty etc.

Importance of cash book A business must have strict financial rules and accounting system to perform, record, report and control the cash and banking transactions. Proper recording and accounting of cash and banking transactions are important to achieve the following objectives:. Single column cash book Single column cash book records only cash receipts and payments. It has only one money column on each of the debit and credit sides of the cash book. All those cash receipts are entered or posted on the debit side and the cash payments are entered or posted on the credit side of the cash book. One more column for amount is provided on the debit side of single column cash book and one on the credit side of Single Column Cash Book. In any account, we can only have one half of a double entry.
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CA - CPT - Cash Book and types of Cash Book

Explain the meaning and types of Cash Book?

Meaning of Cash Book. A Cash Book is a special Journal which is used for recording all cash receipts and all cash payments. All cash transactions are first entered in the cash. Practically, the Cash Book is substitute for Cash Account in the ledger. On the debit side all cash receipts and discount allowed are recorded.

Definition : A cash book is that unique book of accounts which fulfils the objective of both, a journal and a ledger. Like a journal, it is the first book which records all the cash transactions of the business. It also acts as a subsidiary book to post all the cash transactions, similar to a cash account in the ledger. It can be broken down into two words, i. Cash is a real monetary instrument like currency, i. Book refers to a compiled record of the information available in the written or printed form.

A cash book is like a subsidiary book. It is a special book that will record only one type of transactions — cash transactions. In an organization thousands of cash transactions occur in a year and journalizing them all is tedious work.
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Cash Book Format

Here we detail about the three types of cash book, i., Before talking about the cash book, we would briefly explain what is cash. Cash is a current asset which consists of items used in day to day financial transactions as medium of exchange.

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. Though cash book is considering as an original book of entry, it is also considered as an integral part of the ledger. Cash book is the book which serves the purposes of both journal and ledger. The details of every transaction are described in the cash book. Point to be noted that the balance of the cash balance always be a debit balance because a person can not pay more than he had.

A cash book is a financial journal that contains all cash receipts and disbursements, including bank deposits and withdrawals. Entries in the cash book are then posted into the general ledger. 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. Larger organizations usually divide the cash book into two parts: the cash disbursement journal which records all cash payments, and the cash receipts journal, which records all cash received into the business. The cash disbursement journal would include items such as payments made to vendors to reduce accounts payable , and the cash receipts journal would include items such as payments made by customers on outstanding accounts receivable or cash sales. A cash book and a cash account differ in a few ways.

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