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
 FEATURESOF
•
C A SHBO OK
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 .

` `
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.
 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.
 Discountalowedisgivento customersbythe
business whentheypaytheir
accountsquickly.
 Thediscount alowedisput onthe
debitsideofthe cashbook.
DISCOUNT
RECEIVED
Thebusiness also receive a discount
from its suppliers if it pays its accounts
quickly and this is called discount
received.
Thediscount received is put onthe credit
side of the cashbook.
 Thediscount columnin the CASHBOOK
aremerely totalled and not balanced.
Discount account are opened again in ledger
and totals of discount columnsin the
CASHBOOKare
posted there.
 Discount columnis only
memorandumcolumnand not based ondouble
 Two (Double)ColumnCashBook

When discount is allowed on the receipt

of cash and discount is received when
payment is made to suppliers, it
becomesdesirable to add discount
column along with cash on both sides
of the cash book.
 Format of Double ColumnsCash
Book
Dr Cr.
.Date Particulars L. Discount Cash Date Particula L. Discount Cash
F rs F

` ` ` `
 Format of Double ColumnsCash
Book
Dr Cr.
. Dat Particula L.F Cas Dat R.No. L. Cas
e rs Ban h Particul Ban h
k e ar s k F

` ` ` `
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 is denoted by
 Jan 4 `2000from office and deposited in bank
Jan 8 ` 3500 are withdrawn for office use

Date Particul L. Date Particul L . Cash Bank

Cash Bank (`)
ar f ar f (`) (`)
(`)
Jan. 4 To cash C - 2000 Jan.4 By bank C 2000 -

Jan . 8 To C 3500 - Jan . 8 By cash C - 3500

bank
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 .
Dr C
L CAS
. DAT
E
PARTICULAR
DISCO H
BAN
K
DAT
E
PARTICULA
R
L
.DISC
CAS
H BrA.
. F
OUN N
UNT F T
 Some important Transaction
• 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.
.
• 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.
•Internetalowedbythebank:-Internet alowed(credited)
by the bankincreasesthe balanceat
bank.Theentry forsuch interest is, therefore,
recorded onthe debit sidein the bank
column.

• Internetchargesbybank:-
wheninterest ischarged(debited) bythe bankonthe
amount ofbankoverdraft, the entry isrecorded onthe
credit sidein bankcolumn.
• 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 amount and records them in
 Cash column of the cash book, will always
havea debit balance, because cash payment
cannot be mare than the cash in hand.

 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 credit balance if it is

overdrawn and will otherwise have a debit