Single Column Cash Book
It has only one. Column on each side for estimate In fact, it is written just like cash list in the ledger (being real list what comes in is debited; what goes out is credited). This form of 'cash book has the same ruling as that of a ledger list There is no need of having a cash list in the ledger. The purpose is ably served by cash book itself. Posting from debit (receipt) side of the cash book is done to the reputation side of concerned accounts and from the reputation side of cash book to the debit side of concerned accounts.
Book
Balancing
The cash book is balanced in the same manner as a ledger account. As more cash cannot be paid then what we have, therefore the cash balance (if any) must always be a debit balance. Therefore, the receipts column will always be bigger than the payments column. The inequity will be written on the reputation side as "By balance c/d". The totals are then entered in the two columns opposite one another and then on the debit side the balance is written as "To balance b/d". It shows the cash balance in hand in the starting of the next period. To verify the accuracy of the entries made, the cash book should be balanced oftentimes (preferably daily). The balance as per cash book must tally with the actual cash in hand.
Double Column Cash Book
As the phenomenon of contribution and accepting cash allowance is intimately associated with the act of receipt and payment of cash, therefore, the utility of cash book increases if the columns of allowance are also provided in it. Cash book having supplementary columns for allowance is known as double column cash book.
Triple Column Cash Book
These days it is difficult to carryon any enterprise without having dealings with the bank. Ordinarily bulk of its funds is kept by the enterprise at a bank in a current list where frequent withdrawals and deposits are permitted. Bank transactions, i.e.. Payments into and out of bank are more numerous than cash transactions. Therefore, it is suitable as well as suitable that cash book should have one supplementary column on each side to narrative moneys deposited at bank arid payments out of the hank. The supplementary benefit to having this type of cash book is that bank list is not required to be maintained in the ledger.
Before we construe the formula of writing up the triple column cash book you should be well-known with the understanding of 'contra entries'. Also note determined the rehabilitation of cheques received and issued by the business.
Contra Entries
In the three column cash book there will be some cross or contra entries i.e.. Replacement of money from cash to bank (amount deposited) and vice versa (amount withdrawn from bank for office use). In all such cases both entries occur in the cash book and no ledger entry is required. This is indicated by a contra sign (C) in the folio column indicating thereby that the double entry aspect of this transaction is perfect and it requires no posting to the ledger. rehabilitation of cheques in a triple-column cash book is explained below:
1. Cheques received and deposited in the bank on the same day: When the cheques received from the debtors are deposited in the bank on the day of receipt itself the entry is recorded in the bank column on the debit side of the cash book there from debtor's list receives credit.
2. Cheques received but deposited in the bank on a later date: At the time when cheque is received it is recorded in the cash column on the debit side of the cash book and the date on which it is deposited in the bank, Two steps are required:-
(2.1) Enter the same in the cash column on the reputation side of the cash book "By Bank A/c" and
(2.2) Enter it in the bank column on the debit side of the cash book' 'To Cash A/c". Thus it assumes the form of Contra entry on the day of depositing the cheque into bank received earlier.
However, if there is no facts as to the date of deposit of the cheque, it should beassumed that the cheque was deposited in the bank on the date of receipt.
3. Cheques received and endorsed in favor of some creditor :- On receipt, cheque is recorded in the cash column on the debit side and at the time of endorsement the same is recorded in cash column on reputation side, By Creditors Ale.
4. Bearer cheques may be en cashed at the counter of the bank or it may be deposited in the bank. In case it is en-cashed it should be recorded in the cash column on the debit side, in case it is deposited in the bank the same should be recorded in the bank column on the debit side of the cash book.
Cash book is a Journalized ledger
Often a request is asked either cash book is a journal or ledger? It is journal in the sense that all cash transactions are primarily recorded in the cash book with narration and therefore, these are posted to the relevant accounts in the ledger. Cash book is also ledger in the sense that it serves the purpose of cash list and bank list (in case of triple column cash book). No isolate cash list is opened in the ledger where cash book is in existence. Thus cash book is a unique mixture of journal and ledger. It is popularly known as journalized ledger.
Similarities of Cash book with journal
(1) Cash transactions are recorded in the cash book at the time of origin i.e. Traditional book.
(2) Transactions are recorded date-wise.
(3) Transactions from cash book posted to the relevant accounts (except cash account) in the ledger.
(4) Cash book contains ledger folio as in the journal.
(5) Narration is given for each entry.
Similarities of Cash book with ledger
(1) Form of cash book resembles With ledger. Two sides left hand side is the debit side (receipts) Right hand side is the reputation side (payments).
(2) Words "To" and "By" are used as in the ledger.
(3) No isolate cash list and bank list are required in the ledger. Thus cash book is the book of final entry for cash and bank transactions.
(4) Cash and bank columns of the cash book are periodically, balanced just like ledger accounts.
Writing singular Column Cash Book, duplicate Column Cash Book and Triple Column Cash Book
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