Cash Book – Meaning, Types of Cash Book, explanation, examples

Cash Book— Every service activity ultimately lead to cash, therefore, recording of transaction including cash should be taped in a separate journal. This journal is called cash book. It might be specified as the record of transaction associating with invoice of and payment in money.

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Significance of Money Book

A Cash Book is a special journal which is utilized for recording all cash invoices and all cash payments. The Money Book is larger in the sense that it is designed in the form of a Money Account and records cash receipts on the debit side and cash payments on the credit side.

Cash Book

Therefore, all money transaction started to be recorded separately in a book called the cash-book, which later on started to be utilized to tape-record bank book and discount rate deal too besides cash deal by doing so day-to-day checking of cash in hand and periodical checking of cash in hand and periodical checking of bank balance was rendered fast and easy. Cash-book is a book of initial entry, the use of cash-book as a subsidiary book is typically given with. It is an integral part of ledger. But however, it serves the double function of journal along with ledger.

In Basic Words– Cash transactions are straightaway recorded in the Money Book and on the basis of such a record, ledger accounts are prepared. Therefore, the Cash-Book is a subsidiary book. The Money Schedule itself serves as the cash account and the bank account; the balances are entered in the trial balance straight. The Cash-Book, for that reason, is part of the journal. Hence, it has likewise to be dealt with as the primary book. The Cash-Book is hence both a subsidiary book and a principal book.

A money book has the following functions:

  • ( a) Only cash deals are tape-recorded in chronological order in the money book.
  • ( c) All cash invoices are taped on the debit side and all cash payments are recorded on the credit side.

    Kinds Of Cash Book

    There are different kinds of Cash-Book as follows:

    ( i) Single Column Money Book- Single Column Cash book has one amount column on each side. All money receipts are recorded on the debit side and all money payments on the payment side, this book is absolutely nothing however a Money Account and there is no requirement to open separate money account in the ledger.

    ( i) Double Column Money Book- The Double Column Cash Book having two amounts. Columns on each side as under:

    • ( a) Money and discount rate columns
    • ( b) Cash and bank columns
    • ( c) Bank and discount rate columns

    ( iii) Triple Column Cash Book- Triple Column Cash Book has three amount columns, one for money, one for Bank and one for discount rate, on each side. All money receipts, deposits into book and discount rate allowed are recorded on debit side and all money payments, withdrawals from bank and discount got are recorded on the credit side.

    ( iv) The multi-column cash book having multiple columns on both the sides of the cash book.

    ( v) The petty Money Book.

    Is the Cash Book Journal or Journal?

    • Cash Book is a book of initial entry since deals are tape-recorded for the first time from the source documents.
    • The cash book is journal in the sense that it is created in the type of a Money Account and records money receipts on the debit side and cash payments on the credit side.

    Advised

    • Trial Balance
    • Minor Cash-Book
    • Journal
    • Double Entry System
    • Dual Element Concept

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