The document discusses the key aspects of a cash book, which is used to record all cash receipts and payments. It notes that a cash book has two parts - cash receipts and cash payments. Transactions are recorded chronologically with receipts on the debit side and payments on the credit side. The cash book serves as both a journal and ledger. It allows the business owner to ascertain cash and bank balances without physically counting amounts. The document also discusses features of double-column and triple-column cash books, which include additional columns for discounts, and contra entries that affect both cash and bank balances.

3. 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

4. FEATURESOF CASHBOOK
• 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.
Cr
Date Particular Lf Cash Date Particular Lf Cash .
` `

5. 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.

6. 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.

8. Discountallowedisgiventocustomersbythebusiness
whentheypaytheiraccountsquickly.
 Thediscountallowedisputonthedebitsideofthe
cashbook.

9. DISCOUNT RECEIVED
Thebusinessalsoreceiveadiscountfromits
suppliersif it paysits accountsquicklyandthis
iscalleddiscount received.
Thediscountreceivedisput onthecreditside
ofthe cashbook.

10. ThediscountcolumnintheCASHBOOKaremerely
totalled andnot balanced.
Discountaccountareopenedagaininledgerand
totals ofdiscountcolumnsintheCASHBOOKare
posted there.
 Discountcolumnisonlymemorandumcolumnand
notbasedondoubleentry system.

11. Two(Double)ColumnCashBook
When discountisallowedonthe receiptof
cashanddiscountisreceivedwhenpayment
ismadeto suppliers,it becomesdesirableto
adddiscountcolumnalongwith cashonboth
sidesof the cash book.

12. FormatofDoubleColumnsCashBook
Dr Cr.
.Date Particulars L. Discount Cash Date Particula L. Discount Cash
F rs F
` ` ` `

13. FormatofDoubleColumnsCashBook
Particula
rs
L.F
Ban
k
Cas
h
Dat
e
Particul
ar s
R.No. L.
Ban
k F
Cas
h
` ` ` `
Dr
.Dat
e
Cr.

14. is denote
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 cash book.
Such entries are known as Contra Entries. It
d by

15. Jan4 `2000from office and deposited in bank
Jan 8 ` 3500 are withdrawn for office use
ar
Particul L .f
ar
Particul L .fDate
Jan. 4 To cash C
Cash Bank (`) Date
(`)
- 2000 Jan.4 By bank C
Cash Bank
(`) (`)
2000 -
bank
Jan . 8 To C 3500 - Jan . 8 By cash C - 3500

16. 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 .

17. DATE PARTICULAR L DISCO
. UNT
F
CAS
H
BANK DATE PARTICULAR L DISC CASH
. OUN
F T
Dr. C
BrA.N

19. • Endorsement of a cheque :-Sometimes, a
cheque received from a customer is not
deposited into bank, but it may be given to some
other persons i.e., endorsed. On receipt, it will
be entered in the cash column on the debit side.
On endorsement, it will be entered in the cash
column on the credit side
• Bank charges :- Bank usually charges some
amount 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 recorded in the bank column.
.
Some important Transaction

20. • Bank charges on dishonored
cheques:- Expenses charges by the
bank on dishonored cheques will be
added into the amount of dishonored
cheques itself.
• Amount directly deposited by a
customer into our Bank A/c:- When
the information of such a deposit is
receive by the trader, it will be
recorded on the debit side of the cash
book and amount will be entered in
the bank column.

21. •Internetallowedbythebank:-Internetallowed(credited)by
thebankincreasesthebalanceatbank.Theentryforsuch
interestis,therefore,recordedonthedebitsideinthebank
column.
• Internetchargesbybank:-
wheninterestischarged(debited)bythebankontheamount
ofbankoverdraft,theentryisrecordedonthecreditsidein
bankcolumn.

22. • The petty cashier is given a definite sum, says
`2,500, at the time beginning of a certain
period. this amount is called 'imprest amount'.
• The petty cashier goes on paying all petty, say
after a month, the chief cashier reimburses the
amount actually spent by the petty expenses
out of this impress amou n
the petty cash book maint
nt and records them i
ained by him.

24.  Cash column of the cash book, will always havea
debitbalance, because cash payment cannot be
mare than the cash inhand.
 Bank column of the cash book can either debit
balance, because in bank column in the cashbook
represents bank account.
 Bank account will have a creditbalance ifitis
overdrawn and will otherwise have a debitbalance.