DEVI AHILYA VISHWAVIDYALAYA

INDORE

BUSINESS ACCOUNTING ASSINGEMENT

INTERNAL – 3 rd
TYPES OF CASH BOOK

SUBMITTED TO:- SUBMITTED BY:-

Dr. NAVINDRA KUMAR TOTALA PRIYA OJHA

MBA MM SEM I SEC ‘A’
SYNOPSIS :-
➢ Introduction
➢ A cash book excludes the following type of transactions
➢ Features
➢ Advantages
➢ Disadvantages
➢ Types of Cash Book
➢ Cash Book Format
➢ Simple Column Cash Book
➢ Dual Column Cash Book
➢ Triple Column Cash Book
➢ Petty Cash Book
➢ Elements of Cash Book
➢ Illustration – 1
➢ Illustration – 2
➢ Illustration – 3
➢ Conclusion
CASH BOOK:-
What Is a Cash Book?
A cash book is a financial journal that contains all cash receipts and disbursements,
including bank deposits and withdrawals. Entries in the cash book are then posted into
the general ledger.

KEY TAKEAWAYS
• A cash book is a subsidiary of the general ledger in which all cash transactions during a
period are recorded.
• The cash book is recorded in chronological order, and the balance is updated and
verified on a continuous basis.
• Larger organizations usually divide the cash book into two parts: the cash disbursement
journal and the cash receipts journal.
• A cash book differs from a cash account in that it is a separate ledger in which cash
transactions are recorded, whereas a cash account is an account within a general ledger.
• There are three common types of cash books: single column, double column, and triple
column.
A CASH BOOK EXCLUDES THE FOLLOWING TYPE OF
TRANSCATION:-

➢ Payments received or made through cheques:- All the bank related

transactions and exchange of cheques for making or receiving payments.

➢ All non-cash transactions:- Any business transaction taking place in kind or for
which the payment is due.

➢ Discount received or given:- Any discount received on making purchases or

discount allowed on carrying out sales of goods or services.
FEATURES OF CASHBOOK:-
 FEATURES OF CASHBOOK:-

• Journal as well as Ledger: A cash book is used to record the transactions

immediately; thus, it serves the purpose of a journal.
At the same time, it is also a ledger since purely cash transactions are posted in it
(similar to a cash account in a ledger).

• Substitution for Cash Account: A cash book is used as an alternative of a cash

account made in ledger. Since maximum transactions in the business are related to
cash, it becomes convenient to prepare a separate book for it.

• Dual Entry: Similar to other books of accounts, a cash book also has a debit side, that
shows all increase in cash. Along with a credit side, that records all decrease in cash.
 FEATURES OF CASHBOOK:-

• Two Identical Sides: In a cash book, the total of the debit side should always be
equal to the credit side.

• Always have Debit Balance: Cash in hand is the principal element of a cash book
which is used to meet the day to day business expenses.
Logically, paying more than the available cash is not possible. Therefore, the
business will always be left with a debit cash balance (or even no cash balance in
some cases).

• Date wise Entry: The cash receipt entries are made on the debit side or left-hand
side. Whereas, the cash payments made are posted on the right side, i.e., the credit
side.

• Verifiable: The debit cash balance so acquired can be cross-checked by calculating

the actual cash in hand remaining with the business.
ADVANTAGES OF CASHBOOK
 ADVANTAGES OF CASHBOOK

A cash book has simplified the entry cash transactions for accounting purpose to a great
extent.

Following are the various other benefits of maintaining a cash book:

• Traces Mistakes: The balance of the cash book can be verified by matching it with the
actual cash in hand; thus, mistakes and errors can be easily detected.

• Daily Record: The cash transactions are recorded promptly in a cash book daily, which
helps in maintaining a regular record of the cash receipts and payments.

• Ascertain Receipts and Payments: The cash receipts and the payments made in cash
on a specific date can be easily determined with the help of a cash book.
 ADVANTAGES OF CASHBOOK

• Identifies Default: Any default, theft, failure in payment or cash evasion can be easily
identified while verifying the cash book balance with the actual cash balance.

• Determines Cash in Hand: It provides a clear picture of the remaining balance or

cash in hand left with the organization.

• Saves Time, Cost and Labour: Recording the cash transactions first in a journal and
then posting it in the cash account of the ledger is a hefty task.

A cash book initiates creating of a single book of accounts and thus saves a lot of time,
efforts and expense incurred while preparing these two separate books.
 DISADVANTAGES OF CASHBOOK:-

• Ascertain Receipts and Payments :- The cash receipts and the payments made in
cash on a specific date can be easily determined with the help of a cash book.

• Identifies Default :- Any default, theft, failure in payment or cash evasion can be
easily identified while verifying the cash book balance with the actual cash balance.

• Determines Cash in Hand :- It provides a clear picture of the remaining balance or

cash in hand left with the organization.

• Saves Time, Cost and Laboure :- Recording the cash transactions first in a journal
and then posting it in the cash account of the ledger is a hefty task. A cash book
initiates creating of a single book of accounts and thus saves a lot of time, efforts and
expense incurred while preparing these two separate books.
 TYPES OF CASH BOOK :-

A cash book varies based on its complexity and the needs and requirements of the
business.

Following are the two major categories into which a cash book can be bifurcated :-

• General Cash Book :- The cash book, which serves as a journal for the first
recording of the cash transactions and also replaces the cash account in a ledger, is
called a general cash book.

• Petty Cash Book :- The small cash transactions taking place a significant number
of times daily if recorded in a general cash book may make it bulky and difficult to
handle. Therefore such numerous business operations involving a minimal amount
of transactions can be written down in a separate book called a petty cash book and
the person responsible for maintaining it, is called a petty cashier.
 TYPES CASH BOOK :-

Now that we know about the different kinds of cash book, we should go through the
different formats of each of these types below:

• Single Column Cash Book: A single column or simple cash book is that type of cash
book which is used to note down only the cash transactions.
• Double Column Cash Book: A double column cash book records two types of
transactions under two separate columns. Here, one is compulsorily cash column, and
the other can be either a discount column or a bank column.
• Triple Column Cash Book: This type of cash book records transactions related to
three different types of accounts, i.e., cash, bank and discount. Thus, it substitutes the
creation of cash account, bank account, discount received and discount allowed in the
ledger
• Petty Cash Book:- The small cash transactions taking place a significant number of
times daily if recorded in a general cash book may make it bulky and difficult to handle.
 CASHBOOK FORMAT:-

Now that we know about the different kinds of cash book, we should go through the
different formats of each of these types below:

Single Column or Simple Cash Book Format:-

A simple column cash book purely records cash transactions and is a substitute for
cash related journal entries and cash account.

Following is the format depicting a single column cash book:

Double Column Cash Book Format:-

A dual column cash book can be of two types, the one which has cash and discount
columns and the other which has cash and bank columns. However, double column
cash book (with the discount column) is widely used.

Given below is the format of a double column cash book (with the discount column):
Triple Column Cash Book Format:-

The triple column cash book is a compact form of cash book in which all the three
columns, i.e., cash, bank and discount, are included. Here all the cash and bank-
related transactions are recorded along with the discount on sales or purchase of
goods.

The format of a triple column cash book is given below:

Petty Cash Book Format:-

A petty cash book records small cash transactions in separate accounts.

To get a clear picture of how it looks, go through the following format:

 ELEMENTS OF CASHBOOK:-

• Date: The date of each transaction is recorded in this column. On the top of the column, the year
is noted down. This is to avoid repetitive entry (below the year, the month can be written to
simplify the work further). The day of a particular is written in front of the related transaction.

• Particulars: In the particulars column of a cash book, the second account involved in a
transaction other cash, is mentioned. It is preceded by a ‘By’ when the particular account is
debited and ‘To’ if it is credited.

• V.No. (Voucher Number): While receiving any payment in cash from the debtor or customer,
the company issues a cash receipt or memo or receipt voucher. This voucher number is recorded
in front of the particular transaction under the V.No. Column.
Similarly, while making a cash payment for any expense or purchase, the company receives a cash
memo known as payment voucher, which is recorded under the V.No. Column, in front of the
related transaction.
 ELEMENTS OF CASHBOOK:-
• L.F. (Ledger Folio Number): The second account or the account which is opposite
to the cash account in a particular transaction, has its separate ledger account.
Thus, the page number of the ledger where the given transaction is recorded in the
respective second account, is written under the L.F. in front of that transaction.

• Amount: In a simple cash book, there are two amount columns. One is on the debit
side to record all the cash receiving and the other on the credit side to record all the cash
payments.

• Cash: The cash columns replace the amount columns in the double column and triple
column cash books. In which again, the cash column on the left side is used to enter all
the cash receiving. Whereas the credit side cash column notes down all the cash
payments.
 ELEMENTS OF CASHBOOK:-

• Bank: Payments made or received through cheques or any other bank transaction
is recorded either in a double column cash book (with bank column) or a triple
column cash book. It is a replacement of a bank account made in ledger.

• Discount: The discount received while making payment for purchases and the
discount allowed to customers while collecting the amount of sales are written
down under the respective discount column (i.e., discount received on debit side
discount column and discount allowed on credit side discount column), in the
double column cash book or triple column cash book.
 ILLUSTRATION 1:- (SINGLE COLUMN CASHBOOK)

Following are the transactions of ABC Ltd. for July 2018:

DATE TRANSACTION AMOUNT

July 01, 2018 Balance of cash in hand 30000
July 03, 2018 Salary paid to D 5000

July 09, 2018 Withdrawn from bank 8000

July 10, 2018 Cash Sales 7000

July 15, 2018 Goods purchased in cash 15000

July 17, 2018 Paid carriage inwards 1000

July 19, 2018 Paid for machinery repairs 3000

July 22, 2018 Debts recovered from H 2000

July 31, 2018 Rent Paid 10000

Solution:
 ILLUSTRATION 2:- (DOUBLE COLUMN CASHBOOK)

Following are the transactions of XYZ Ltd. for August 2018:

DATE TRANSACTION AMOUNT

August 01, 2018 Cash in hand 45000
August 04, 2018 Paid interest on loan 6000
August 07, 2018 Paid to A 13500
August 07, 2018 Discount received from A 1500
August 09, 2018 Paid telephone bill 3000
August 13, 2018 Bad debts recovered from B 5500
August 16, 2018 Purchased goods on credit from C 10000
August 18, 2018 Paid in full settlement to C 9500
August 22, 2018 Received from D 11000
August 22, 2018 Discount allowed to D 1000
August 27, 2018 Cash sales 8500
August 31, 2018 Paid salary to E 6000
Solution:
 ILLUSTRATION 3:- (TRIPLE COLUMN CASHBOOK)
Following are the transactions of XYZ Ltd. for August 2018:

DATE TRANSACTION AMOUNT

Sept. 01, 2018 Cash in hand 38000
Sept. 01, 2018 Balance at bank 79000
Sept. 01, 2018 Interest received from bank 1500
Sept. 03, 2018 Paid to M 7500
Sept. 03, 2018 Discount received from M 500
Sept. 12, 2018 Withdrawn from bank for personal use 5000
Sept. 16, 2018 Goods sold on credit to N 25000
Sept. 19 2018 Paid travelling expenses 900
Sept. 21, 2018 Cheque received from N in full settlement 23500
Sept. 21, 2018 Cash sales deposited into bank 9000
Sept. 25, 2018 Salary paid 12000
Sept. 30, 2018 Bank charges deducted 500
Sept. 30, 2018 Paid Rent through cheque 15000
Solution:
 ILLUSTRATION 4:- (PETTY CASHBOOK)
Following are the transactions of XYZ Ltd. for August 2018:

DATE TRANSACTION AMOUNT

October 01, 2018 Petty cash balance 600
October 01, 2018 Reimbursement by Chief Cashier 2000
October 09, 2018 Paid travelling fare for marketing manager 750
October 11, 2018 Bought attendance register 100
October 13, 2018 Sold scrap 350
October 16, 2018 Paid for refreshment 250
October 19, 2018 Paid postal expense for sending quotations 150
October 21, 2018 Paid cartage expense for raw material 125
October 23, 2018 Paid for temporary labor 100
October 26, 2018 Donation to child welfare organization 200
October 26, 2018 Paid fuel expenses for office van 225
October 28, 2018 Bought pens for office work 50
October 31, 2018 Paid to plumber for tap repairs 150
Solution:
 CONCLUSION:-

Every business organization, whether a small entity or a large company, needs to

maintain and prepare the records of its daily transactions.
Also, cash being the most crucial element of business requires special attention
and monitoring.

Thus, preparing a cash book serves multiple business purposes like reporting,
accounting, taxation, cash flow, etc.