CashBook and Petty CashBook

Cash Book and Petty Cash
Book
Nabiha Khan
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
CASHBOOK
• 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.
Types of cash book
□ Simple cash book.
□ Double column cash book.
□ Triple Column cash book.
□ Petty Cash book

Simple cash
book
□ prepared like cash account in ledger.
□ All the cash receipts are entered in amount

column on debit side and all cash payments are
appeared on credit side of the amount column.
□ Cash book is closed and balanced at the end of

the month.
Simple Cash Book
2012 Jan 1 Purchased goods for cash Rs. 10000

Jan 6 Sold goods for cash Rs. 25000
Jan 8 Paid rent Rs. 1000
Simple cash book
Date Receipts L.F Amount Date Payments L.F Amount
2012 To Sales 25000 2012 By Purchases 10000

Jan 6 Jan 1
Jan 8 By Rent 1000
Jan 31 By Balance c/d 14000
25000
25000
Feb 1 To Balance b/d 14000

Double column cash book
□ A cashbook with cash and discount column
is called double column cashbook.
□ Two accounts, cash and discount are combined

in this book.
Double column cash Book
2012 Jan 1 Paid rent Rs. 1300
Jan 5 Paid to Ram & Co. Rs.3950 Discount Received Rs. 50
Jan 6 Received from Gupta & Co. Rs. 9900 Discount allowed Rs. 100
Double column cash Book
Date Receipts L.F Discount Amt. Date Payments LF Discount Amt.
2012 2012
Jan 6 To Gupta 100 9900Jan 1 By Rent 1300
Jan 5 By Ram 50 3950
Jan
31 By Bal c/d 4650
100 9900 50 9900
Feb 1To Bal 4650

b/d
Triple Column cash book
□ A cash book with discount and bank column is
triple column cashbook. Three accounts are
combined.
□ In business firm most of the payments are

received and paid by cheque. Transactions are
preformed through bank.
Triple Column Cash
book
Date Receipts L.F Discount Cash Bank Date Payments L.F Discount Cash Bank
 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
• 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

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Cash Book and Petty Cash

 It is both a subsidiary book and a

□ Double column cash book.

□ Triple Column cash book.

□ Petty Cash book

□ All the cash receipts are entered in amount

□ Cash book is closed and balanced at the end of

2012 Jan 1 Purchased goods for cash Rs. 10000

2012 To Sales 25000 2012 By Purchases 10000

Feb 1 To Balance b/d 14000

□ Two accounts, cash and discount are combined

Feb 1To Bal 4650

□ In business firm most of the payments are

• The petty cashier goes on paying all petty, say

 Bank column of the cash book can either

 Bank account will have a credit balance if it is

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