Cash book is both a journal & a ledger explain

Cash book is both a journal and ledger explain accountancy. Why is cashbook regarded as both a ledger and as a journal. A cash book is that unique book of accounts which fulfils the objective of both, a journal and a ledger. The cash column is used to record all cash transactions and. The cash book serves the purpose of both journal and ledger account explain ask for details.

Entries marked c being contra entries as explained earlier are ignored. A cash book is a separate ledger in which cash transactions are recorded, whereas a cash account is an account within a general ledger. What is a cash book definition, explanation and types. It is a journal because its a book of original entry transactions are firstly recorded. The cash book serves the purpose of both journal and.

Thus we see that a cash book is the mixture of journal and ledger. Briefly state how the cash book is both journal and a. Some accountants term cash book as a journal and some other term it as a ledger. A cash book serves the purpose of both the journal and. Modem accountants term cash book both as journal and ledger. The cash book is a journal because it records the cash transactions from the source document for the first time and then these are posted in the respective ledger accounts. The cash book is a ledger in the sense that it serves the purpose of a cash account also. In other words, we can say that if we add a bank column to both sides of a single column cash book, it would become a double column cash book. Its a ledger as well because it serves the purpose of an account. On the other hand, all cash transactions are primarily recorded in the cash book in order of date and thereafter posted to the concerned ledger accounts.

It serves the purpose of both journal as well as the ledger cash account. A doubletwo column cash book to record cash as well as bank transactions. Double column cash book explanation, format, example. Journal becuase as soon as cash transactions take place they are primarily recorded here. It also acts as a subsidiary book to post all the cash transactions, similar to a cash account in the ledger. Like a journal, it is the first book which records all the cash transactions of the business. That means it is a book of original entry and ledger because all aspects of cash are recorded here. In a cash book, the total of the debit side should always be. Definition and explanation of cash book format, advantages.

All real accounts relate to assets, hence, show the. The balance of cash book and cash of a cash box must be equal. Noncash transactions of cash books are transferred to a relevant account in the ledger. And ledger because all aspects of cash are recorded here. After the occurrence of transactions, these are recorded in the. While posting this entry into the ledger, it will be posted both in purchase account as well as in cash account. The most common examples are the single, two and three column cashbooks, however, it is possible to have multicolumn cash books, such as the petty cashbook, which can be used to provide further analysis of receipts and payments. The double column cash book also known as two column cash book has two money columns on both debit and credit sides one to record cash transactions and one to record bank transactions. This looks like a journal now and your total debits should equal your total credits.

It is a journal because its a book of original entry transactions are firstly recorded in it just like journal. A cash book serves the purpose of both the journal and ledger, whereas a cash account is structured like a ledger. As cash transactions are handled by the cashier directly, it can be construed as journal. Before talking about the cash book, we would briefly explain what is cash.