–Pushpender Kumar, Academic Content Writer, Edumarz
Cash Book is prepared by all business organizations and it records all cash transactions related to business.
All cash receipts are recorded on the left side (debit side) and all cash payments are recorded on the right side (credit side) in the Cash Book.
When the Cash Book is prepared so cash-related transactions are not recorded in the journal proper neither the Cash Account (ledger) is prepared.
Cash Book is balanced in the same way as ledger accounts. The cash column of the Cash Book always shows the excess balance on the debit side (receipt) because cash payments can’t exceed cash receipts.
Balancing of different forms of Cash Book:
Single Column Cash Book: It has one column of cash on each side and always the debit side cash column exceeds the credit side cash column because cash payments can not be more than cash receipts.
Double Column Cash Book: It has two columns on each side of cash and bank. The cash column always shows the more debit balance (receipt) but the bank column can show either more debit balance or credit balance when the debit balance is more so it represents positive cash balance and when a credit balance is more so it represents negative balance (bank overdraft).
Petty Cash Book: Initially petty cashier receives cash which is shown in the amount column and at the end of term add all petty cash payments then if after meeting all petty cash expenses cash remains so it shows positive balance.