Cash book in accounting meaning

Thus we see that a cash book is the mixture of journal and ledger. A cash book is that unique book of accounts which fulfils the objective of both, a journal and a ledger. Entries in cash book are posted then to the corresponding general ledger. A cash book is a type of day book, recording transactions in date order. Cash book definition, types accounting format of cash book. Cash book financial definition of cash book financial dictionary. A single column cash book to record only cash transactions. Let us make indepth study of the meaning and features of cash book of original entry.

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. What is a cash book definition, explanation and types. Journal in which all cash receipts and payments including bank deposits and withdrawals are recorded first, in chronological order, for posting to general ledger. In larger firms, it is commonly divided into two parts. An accounting book that is composed of cash receipts plus disbursements. Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book. A triplethree column cash book to record cash, bank and purchase discount and sales discount. Cash book is the one in which all the cash receipts and cash payments including the funds that are deposited in the bank and funds which are withdrawn from. Receipts are recorded on the debit the left hand side, and payments are recorded on the credit right hand side. Moreover, a cash book is a substitute for cash account in the ledger. Cash book is a separate book of accounts in which all the cash transactions of the company are entered with respect to the corresponding date and it is different from the cash account where posting is done from the journal. Cash book is regularly reconciled with the bank statements as an internal auditing measure. Definition and explanation of cash book accounting details. Cash book is a book of original entry in which transactions involving cash are to be recorded as and when they occur.

It works as a book of original entry as well as a ledger account. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. There is no requirement to transfer the balances to the general ledger which is required in case of the cash account. The entries in cash book are regarded as one aspect of the double entry system the other aspect is posted to the ledger in the concerned account. A doubletwo column cash book to record cash as well as bank transactions. This balance is posted to the cash account in the ledger. The cash book is used to record receipts and payments of cash. In fact, no separate cash account is opened in the ledger, cash book serves the purpose of the cash account. The entries related to receipt and payment of cash are first recorded in the cash book and then posted to the relevant ledger accounts. When cash is received it is entered on the debit or left hand side. Modem accountants term cash book both as journal and ledger. Entries in the cash book are then posted into the general.