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A cash book is also known as book of original entry in which all transactions related to cash receipts and cash payments are recorded. All cash deposits and withdrawals are recorded in a sequential order. Cash receipts are recorded in cash column and bank deposits are recorded in bank column, and all cash deposits are added in cash column, cheque payment get recorded in credit side under bank column. It serves as a principal book.
Types of cash book are:
1. Single Column Cash Book: In this type of cash book all recordings related to cash takes place, it is useful for organisations that maintain only cash transactions. It contains records of cash receipts and cash payments.
2. Double Column Cash Book: The two column cash book is also referred to as the double column cash book. It contains two money columns on both sides (i.e. debit and credit), one side is for recording cash transactions while the other is for recording bank transactions.
Cash transactions are recorded in cash column and thus functions as a cash account whereas bank column records all bank related transactions such as payments made by cheques and functions as a bank account. Some organisations prefer the double column cash book as it contains both cash and bank columns and thus it is easy to maintain instead of maintaining two separate ledgers.
| Cash Book |
| Dr. | | | | | | | | | Cr. |
| Date | Particulars | L.F. | Cash ₹ | Bank ₹ | Date | Particulars | L.F. | Cash ₹ | Bank ₹ |
| Cash | (C) | | – | | Bank | (C) | – | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
3. Triple Column Cash Book: Triple column cashbook is a type of cash book that has provisions for three columns which are cash, bank and discount. It is used by large firms that frequently deal with cash and bank transactions as well as which allow cash discounts. The procedure of recording data is similar to double column cash book. The cash and bank columns are periodically totalled and balanced, while the discount column is only totalled. Discount allowed is recorded on the debit while discount received from suppliers is recorded on credit side.
4. Petty Cash Book: A cash book that records all those expenses that are small and hold little value is called a petty cash book. The transactions related to stamps, stationery, postage, daily wages etc. are recorded in petty cash book.