We are listening many times about cash and money in any business because cash is the base of any business as it is in bank or in hand. so a successful business should keep its cash transactions very clear in a cash book for decision times to get more profits.
What is Cash Book
All accounting transactions should keep in a suitable place in book 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, and credit.
Cash Book Format
Typically, we can find two format for a cash book 1- Official format 2-Shop format.
In official format there are columns Date, Description, Debit and Credit but in shop format there are columns: Date, Description, Income and Expense.
Debit and Credit are used in accounting concepts and professional format but these terms are hard to understand for normal user so in shop format term Income will used for Debit and Expense Will used for Credit.
Types of Cash Book
- Two Column Cash Book
- This type, has two columns as Debit (Income) and Credit(Expense) for Only Cash account so 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
Petty Cash Book
Petty cash is one of big volume account in any business because of much quantity of charge payments for daily charges of offices or..
However, in the most company, petty cash transactions keep in separate book as name petty cash book.
How to Use Cash Book
As you know, cash transactions are too much and everyday too many voucher will be recorded. so it is recommended to enter cash payments and cash receipt at the end of day and before leaving the job. Don't leave them to do in the next day because you will get more delay vouchers day by day so that will grow to huge quantity of vouchers and it will make more mistakes in big time working.
To read more about Cash Book Entry