-Pushpender Kumar, Academic content writer at Edumarz
A Cash Book is a book in which all cash-related transactions are recorded related to business.
Every business prepares a cash book irrespective of its size and whether a business is profit-oriented or not.
When the cash book is prepared, cash-related transactions will not be recorded in the journal book and the cash account ledger will not be prepared.
Generally, it is prepared every month. Cashbook has two sides: debit and credit. When cash comes into the business, the cash book is debited when cash goes from the business so the cash book is credited.
1) Single Column Cash Book: It has one column of cash on each side (debit and credit). A business’s cash receipts are recorded on the debit side and business cash payments are recorded on the credit side of the cash book.
2) Double Column Cash Book: It has two columns of cash and bank on each side of the cash book. A business records cash receipts on the debit side in the cash column and cash payments on the credit side in the cash column of the cash book. And when the business deposits cash in a bank account so it records on the debit side in the bank column and when cash is withdrawn from the bank so it records on the credit side in the cash book. But when cash is withdrawn from the bank is more than the deposit so the bank column shows overdraft balance.
3) Petty Cash Book: Every business has a large number of small payments of the same nature. So, the petty cash book records petty expenses such as stationery, cartage, etc., and receipts from the main cash book.
Types of Petty Cash Book:
I) Simple Petty Cash Book: Cash received by the petty cashier is recorded on the left side in the cash column and cash payment is recorded on the right side in the payment column.
II) Analytical Petty Cash Book: Cash receipts are recorded on the left side and all the cash payments are recorded on the right side. It provides a separate column of a particular item of expenditure.