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CASH BOOK


CASH BOOK


In business most of the transactions relate to receipt of cash, payments of cash, sale of goods and purchase of goods. So it is convenient to have separate books for each, such class of transaction, one for receipts and payments of cash, one for purchase of goods and one for sale of goods. These books are called subsidiary books.

Cash book is a subsidiary book with records the receipts and payment of cash. With the help of cash book and bank balance can bank balance can be checked at my point of time.

TYPES OF CASH BOOK

Cash book can be of four types:
1.       Simple cash book.
2.       Two column cash book.
3.       Three column cash book.
4.       Petty cash book.




1 SIMPLE CASH BOOK
A simple cash book is prepared like any ordinary account. The receipt are recorded in the DR. side and the payment are recorded in the CR. Side of the cash book. The specimen Performa of a simple cash book.

Format of simple cash book
  DR.                                                                                                                                                                 CR.
Date
particular
LF.
Amount
Date
Particular
LF.
Amount











Preparation of simple cash book.

Cash book is in a way, a cash account with debit and credit side and cash account is an asset account, so the rule followed is increase in assets to be debited and decrease in asset is to be credited. This implies that cash book is a book where all the receipts in terms of cash are recorded on its credit side. This means cash book records all transactions related to receipts and payments in terms of cash only. On the debit side in the particulars column, the name of the account, for which cash.


Illustration
Enter the following transactions in the cash book of m/s. ABC traders:

Date                                      details                                                                                  amount
December 01                     cash in hand                                                                       27,500
December 05                     cash received from Nitu                                                12,000
December 08                     insurance premium paid                                                2,000
December 10                     furniture purchase                                                           6,000
December 14                     sold goods for cash                                                          16,500
December 18                     purchase goods for cash from naresh                               26,000




Books of M/S ABC traders
Cash book
                                                                                                                                                                        DR.                                                                                                                                 CR.
DATE
PARTICULAR
AMOUNT
DATE
PARTICULAR
AMOUNT
 DEC 1
TO Balance b/fd
27500
DEC 08
By insurance premium
2000
DEC 05
To nitu a/c
12000
DEC 10
By furniture
6000
DE4C 14
To sale
16500
DEC 18
By purchase
26000













Total


Total

    

2 two column cash book

A two- column cash book records discount allowed and discount received along with the cash payments and cash receipts. Discount allowed is the concession given by the business man to its customers or debtors. It is a gain or profit for the firm so it is to be credited and recorded in the CR. Side of the cash book.



3 THREE COLUMN CASH BOOK

A three column cash book is a cash book which contains bank column along with cash and discount columns. A firm normally keeps the bulk of its funds at a bank; money can be deposited and withdrawn at will if it is a current account. Probably payments into and out of the bank will be more numerous than strict cash transactions. They in only a little difference between cash in hand and cash at bank.

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CASH BOOK CASH BOOK Reviewed by crazy readers on September 11, 2018 Rating: 5

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