Cash Account

The First question is: "what is Cash". before to answer it, we should have a define of word "Cash". Cash in public area as shops and stores will be mentioned to money but in finance cash term covers any capital in hand, cashier and bank account that you could have to spend same day of request. Cash is king. It is the essential part of business so cash book is a strong matter in financial reports and without it, a business cannot pay its employees' wages or pay for goods or services. Cash book entry is recording cash in the bank account from the bank. Small businesses may sometimes prepare a cash flow statement directly for auditing. More usually, however, the cash flow statement is by deducing the figures from the profit and loss account and balance sheet.



Cash Flow Schematic

Cash Flow Schematic

Cash flow Statement

At its simplest, records the cash inflows and cash outflows classified under certain headings such as cash flows from operating(i.e., trading) activities. All companies(except small ones) must prepare cash elements in line with financial reporting regulations.


Importance of Cash Book<

However some sole traders, partnerships and smaller companies also provide them, often at the request of their bank. As Real-Life shows, banks aware of the importance of cash As well as preparing cash flow statements on the basis of past cash flows, businesses will continually monitor their day-to-day cash inflows and outflows. at the end of financial period, for information of shareholders, capital of company will be reported in a cash book, so it is very important to have clear copy of it every time!.

Managers also prepare cash budgets which look to the future. These are generally used within the business and are not pub- listed externally. Cash management, therefore, concerns the past, present and future activities of a business.

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