Cash Book - Definition, Features, Types and
Advantages
Cash is an essential medium of conducting transactions taking place
in a business and needs to be recorded for maintaining proper
bookkeeping of the transactions. Cash is a current asset, and examples
of cash transactions can be bank overdraft, money orders, demand
deposits.
This leads to the need for maintaining all cash transactions in one
place for the business and necessitates the use of a cash book.
Cash Book definition
Cash book is a special type of book that is only concerned with the
recording of cash transactions of an organisation. It performs the dual
role of both journal and a ledger for all the cash transactions taking
place in a business organisation.
A cash book records all the cash receipts on the debit side and all the
cash payments of the organisation on the credit side.
Features of Cash Book
Cash book has the following features:
1. Acts as both a journal and a ledger.
2. Can be used as an alternative to a cash account for recording
transactions.
3. It follows the dual entry system of accounting (i,e. Debit and
credit side in cash book).
4. The debit side should be identical to the credit side.
5. Cash book should always have a debit balance.
Types of Cash Book
There are four types of cash books used for accounting purposes. Let
us have a look at the types of cash books.
Advantages
Cash is an essential medium of conducting transactions taking place
in a business and needs to be recorded for maintaining proper
bookkeeping of the transactions. Cash is a current asset, and examples
of cash transactions can be bank overdraft, money orders, demand
deposits.
This leads to the need for maintaining all cash transactions in one
place for the business and necessitates the use of a cash book.
Cash Book definition
Cash book is a special type of book that is only concerned with the
recording of cash transactions of an organisation. It performs the dual
role of both journal and a ledger for all the cash transactions taking
place in a business organisation.
A cash book records all the cash receipts on the debit side and all the
cash payments of the organisation on the credit side.
Features of Cash Book
Cash book has the following features:
1. Acts as both a journal and a ledger.
2. Can be used as an alternative to a cash account for recording
transactions.
3. It follows the dual entry system of accounting (i,e. Debit and
credit side in cash book).
4. The debit side should be identical to the credit side.
5. Cash book should always have a debit balance.
Types of Cash Book
There are four types of cash books used for accounting purposes. Let
us have a look at the types of cash books.
