Cash Book


Almost any set of accounting records involves the receiving in and paying out of money, sometimes cheques, sometimes cash and sometimes both will be recorded in cash book entries. If there are only a very few entries, it may all be recorded in the bank account and cash account in the nominal ledger.

but due to the number of entries it is usual to maintain a separate book (A separate cash account in ledger book) by cash book entry.

Sometimes bank and cash are combined in one book and sometimes two books are kept. actually cash is blood and energy of an business. so that, A clear and updated of cash book statement is very important for managers.

When you can have a perfect cash flow statement if you recorded exact and true journal entries of cash transactions.

What is Cash Book

As the cash books are a medium of posting to the Nominal ledger, they are books of prime entry. Sometimes the cash book is just a posting medium and sometimes a running balance is maintained as an integral part of the system. so recording a clear journal of cashes is very important to have the best cash flow reports.

Cash flow in businesses

Parts of Cash book

All accounting transactions should be recorded and keep in a suitable section in ledger book, there many types of transactions between products, customers and suppliers. so that, relations of these transaction will be by cash or credits. Transactions of items of products and services will be kept in sales day book and purchase book and therefore all money transactions will keep in cash book. so any cash payment and cash receipt will record in cash book.

Cash book is a separate accounting book that includes columns as:

  • Date
  • Accounts
  • Description
  • Debit
  • Credit

Any record with debit amount means cash amount will store in cash account and reverse.

Example of Cash book

  • Report of cash payment in a purchase voucher
    • As you see here, 5460 USD has been paid for a purchase and this amount of cash has been reduced from cash account (Cash in Hand)
    • Sample of cash receipt voucher in iGreen accounting

Sample of cash receipt voucher in iGreen

Types of Cash Book

  • Two Column Cash Book
    • This type, has two columns as Debit (Income) and Credit(Expense) for Only Cash account, therefore it mentions to All money in hand and bank
  • Triple Column Cash Book
    • This type, has three columns as Debit, Credit, and a column for cash type ( cash in hand or cash in bank). Benefit of this type of cash book is to recognize where is cash? in hand or in bank and we can have more clear reports and statement of cash flow
Triple Columns format of cash book

Triple Columns

Petty Cash Book

In general, petty cash is one of big volume account in any business. Actually of much quantity of charge payments for daily charges of offices or.., therefore in the most company, petty cash transactions keep in separate book as name petty cash book.

How to Use Cash Book

There are too much cash transactions everyday. We recommend to enter vouchers of cash payments and receipt at the end of day.

For this reason, Don’t leave them to do in the next day. else delayed vouchers will grow to huge quantity and it will make more mistakes in big time working.

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