Cash book

Presentation by:Anshuman

Manav
Sourabh

Presented t
o-

MR.Manoj
sharma.

CASH
BOOK

Cash book is the special journal which

is used for recording all cash
transactions. It may be defined as the
book in which transactions are
recorded in detailed particulars of all
money received and paid.
Cash book is divided into two parts ;
A) Cash receipt
B) Cash payment

FEATURES OF CASH BOOK

To keep record of only cash transactions
All receipts are recorded in debit side
All payments are recorded in credit side
Chronological (date wise) transaction recording of all
transactions.
Performs function of both journal and ledger.

Format of Cash Book

Debit
D
r.

Date

Receipt
Particular

Lf

Payment
Cash
`

Date

Particular

Lf

Credit

Cr
Cash .
`

Objects or Need of cash book

To find out the total cash

receipts and cash payments
during a given period.
To ascertain the balance of cash
in hand and at bank at any time
without actually counting cash
and examining Bank passbook
To verify the correctness of cash
in hand and bank.

IMPORTANCE OF CASH BOOK

It is both a subsidiary book and a

principal book.
It helps the trader to understand the
cash in hand and cash at bank.
It gives information about
daily closing cash and bank
balance at the end of
each day.

DIFFERENCE BETWEEN CASH ACCOUNT

AND CASH BOOK

CASH ACCOUNT
It is an account in the
ledger.
Cash account is opened in
the ledger and posting is
done in this account from
journal.
When Transactions of
cash are recorded in journal
. it is necessary to open a
cash A/c in ledger.

CASH BOOK
It is separate book maintained
for recording Cash transaction
.
It is book of original entry bec
ause all cash transaction are f
irst of all recorded in cash boo
k and posted from cash book t
o various account in ledger
When transactions of cash ar
e recorded in Cash book, the
re is no necessity to open a C
ash A/c in the ledger.

o
c
s
i

t
n
u

DISCOUNT ALLOWED

Discount allowed is given to

customers by the business when
they pay their accounts quickly.
The discount allowed is put on
the debit side of the cashbook.

DISCOUNT RECEIVED
The business also receive a
discount from its suppliers if
it pays its accounts quickly
and this is called discount
The discount received is put
received.
on the credit side of the
cashbook.

IMPORTANT THING ABOUT DISCOUNT

The discount column in the

CASH BOOK are merely totalled
and not balanced.
Discount account are opened
again in ledger and totals of
discount columns in the CASH
BOOK are posted there.
Discount column is only

Bank Overdraft

Bank Overdraft is the excess amo

unt withdrawn from the bank acc
ount than the amount deposited
in it.
Bank over draft is recorded in the
credit side of the cash book in ba
nk column.

Two (Double) Column Cas

h Book
When discount is allowed on
the receipt of cash and
discount is received when
payment is made to suppliers,
it becomes desirable to add
discount column along with
cash on both sides of the cash

Format of Double Columns Ca

sh Book
Discount received

Discount allowed
Dr
. Dat
e

Receipt
Particulars

L.
F

Payment

Discount

Cash

Dat
e

Particul
ars

L.
F

Cr.

Discount

Cash

Format of Double Columns Ca

sh Book Amount
Amount
Dr
. Date

Receipt
Particulars

Payment
L.F Bank

Cash

Date

Particular
s

R.No.

Cr.
L.
F

Bank

Cash

Some transactions are recorded in a

Cash book and bank book ,i.e., balance
of one decreases and that of the other
increases due to such transactions.
Such transactions are entered on both
sides of the
C cash book. Such entries
are known as Contra Entries. It is
denoted by

Example

Example of contra entrie

Jan 4
`2000from office and deposited in bank
Jan 8 ` 3500 are withdrawn for office use

Dr.

Date

Receipt

Particul L .f
ar
Jan. 4 To cash C

Cash
(`)
-

Jan . 8 To bank C

3500

Bank (`) Date

2000
-

Payment

Particul L .f
ar
Jan.4 By
C
bank
Jan . 8 By
C
cash

Cr

Cash
Bank
(`)
(`)
2000
-

3500

Three Column Cash Book

Three column cash book is a cash book
which has three columns on each side; one
column to record discount allowed, another
to record discount received, another to
record cash transactions and yet another to
record bank transactions. In other words,
we can say that triple or three-column Cash
Book represent two account i.e., Cash
account and bank account .

FORMAT
Discount received

Discount allowed

Dr.

DATE

PARTICULAR

L
.
F

DISC
OUNT

CAS
H

BANK

DATE

PARTICULAR

L DISC
. OUN
F T

CASH

Cr
BAN
.

Cr.

Dr.
Date

Particulars

L.F.

Discount

Cash

Bank

Date

Particulars

L.F.

Discount

Cash

Bank

2013
Jan.1

To Balance
b/d

1,550

Jan 1

To Sales a/c

1,315

Jan 3

To Cash a/c

Jan 4

To A Hussan

Jan 8

To Cash

Jan 10

To Hayat Khan

Jan 12

To Sales a/c

Jan 31

To Cash

Jan 31

To Bank

13,575

Jan 1

By Office
Equip.

Jan 3

By Bank

Jan 6

By
Purchases
a/c

Jan 8

By Bank

Jan 16

By Salman

Jan 27

By Gulzar

650

1,500

Jan 30

By Salaries
a/c

1,750

775

Jan 31

By Bank

Jan 31

By Cash

500

2,550
c

2,550
15

775

250

750
c

500
1,005

2,550
5

By
Balanced
c/d
2013
feb 1

To balance
b/d

1,865

14,330

Jan 12
Jan 4
Received
from
A. `1,500
Hussanwho
a cheque
for
Purchased
office
typewriter
for
cash
`750;
Sold
merchandise
to
Divan Bros.
for
paid
by
cheque which
Jan 31
10
Received
from
Hayat
Khan`915
aby
cheque
for
`775
in
full
settlement
Drew
Paid
from
to
bank
Gulzar
for
Ahmad
office
use
`250.
cheque
`650
Jan
Jan
27 by
Paid
Salman
by cheque,
discount
received
`5 of his
Jan
Jan.1
16
Jan
6
Paid
cheque
for
merchandise
purchased
worth
`1,005
Deposited
cash
`
500
Jan
3
Paidinto
salaries
by
cheque
`1,750
Jan8 Deposited
30 Deposited
into
bank
the
cheque
of
Hayat
Khan.
Jan31
was
deposited
in
the
bank.
Jan
bank
the
cheque
received
from
A. Hussan.
`2,550
in part
payment
of his account
cash
sales
`315
account and allowed him discount `15.

915

775
250
1,865

14,330

Some important Transaction

Endorsement of a cheque :-Sometimes, a ch
eque received from a customer is not deposited
into bank, but it may be given to some other per
sons i.e., endorsed. On receipt, it will be entered
in the cash column on the debit side. On endors
ement, it will be entered in the cash column on t
he credit side
Bank charges :- Bank usually charges some am
ount for the services rendered to its customers.
Such charges will be recorded on the credit side
as By Bank Charges` and the amount will be rec
orded in the bank column.
.

 Bank charges on dishonored cheque

s:- Expenses charges by the bank on
dishonored cheques will be added int
o the amount of dishonored cheques i
tself.
Amount directly deposited by a custo
mer into our Bank A/c:- When the info
rmation of such a deposit is receive b
y the trader, it will be recorded on the
debit side of the cash book and amou
nt will be entered in the bank column.

Internet allowed by the bank:Internet allowed (credited) by the

bank increases the balance at bank.
The entry for such interest is,
therefore, recorded on the debit side
in the bank column.
Internet charges by bank:when interest is charged (debited) by
the bank on the amount of bank over
draft, the entry is recorded on the
credit side in bank column.

Petty Cash Book

The petty cashier is given a definite sum,
says `2,500, at the time beginning of a ce
rtain period. this amount is called 'impres
t amount'.
The petty cashier goes on paying all petty,
say after a month, the chief cashier reimb
urses the amount actually spent by the pe
tty expenses out of this impress amount
and records them in the petty cash book

etty Cash Book (Forma

 Cash column of the cash book, will always have a

debit balance, because cash payment cannot be
mare than the cash in hand.
Bank column of the cash book can either debit b
alance, because in bank column in the cash book
represents bank account.
Bank account will have a credit balance if it is ov
erdrawn and will otherwise have a debit balance.