What is a Cash Book Types, Format, Examples

cash book examples

Mr. David started a business ‘David and Sons’ with a Capital of $10000 on 1st April. Following are the transactions made by David and Sons for April 2023. It is worth mentioning that the format of a three column cash book is similar to that of a two column cash book. The cash column’s total on the debit side will always exceed the total of the credit side.

The petty cashier submitted the below expenses with their respective amounts for the current period amounting to 900. A cash book is an important tool for businesses to help track their finances. They allow businesses to keep track of payments and receipts in a detailed way.

Central Cash Book Template

On the debit side, a firm can record any cash that it has at the beginning of the month or any income it receives. Small businesses often use this type of cash book to record and track cash inflow and outflow. The above format of double column cash book has six columns on both debit and credit sides. Contra entries are not posted because the double entry accounting for these transactions is completed within the cash book. All items on the debit side of the cash book are posted to the credit of respective accounts in the ledger.

  • Three column cash book records three types of accounts, i.e., cash, bank and discount.
  • In such cases, the Cash Book with bank column in addition to the cash and discount columns is found convenient.
  • The single column cash book resembles a T-shaped cash account in almost all respects.
  • On 1st January 2023, Matt Company started its business ‘Matt’s Textile’ with $10000.

For example, when cash is deposited into bank, it is entered in the debit side of the Cash Book by writing “To Cash” and entering the amount in the bank column. This type of cashbook has two columns, viz., cash column and discount column. Usually cash discount is allowed or received when payment is made. So, it is necessary to record this fact at the same place where the cash transaction is recorded. The petty cash book is a useful control over petty cash expenditures, since it forces the petty cash clerk to formally record all cash inflows and cash outflows.

Advantages of Petty Cash system

The difference between both of the cash books is that the columns of ‘Particulars’ and ‘Date’ are the same for the receipt and payment sides. A contra entry is when an entry is made on the debit side and the same entry is recorded on the credit https://turbo-tax.org/understanding-your-form-1099/ side of the cash book. If an entry is made on the debit side and the same entry is recorded on the credit side of the cash book, it is called a contra entry. Bank charges are recorded on the credit side of the cash book in the bank column.

cash book examples

Larger businesses rely on double-entry cash books to keep tabs on all their cash transactions in the order they occur. These differ from single-entry as they provide an in-depth view of cash inflows and outflows. It allows recording both the source and use of funds in each transaction. Preparing a double column cash book is almost similar to that of the single column cash book.

Description Column

If we write the cash transactions also in Journal, we cannot know the position of Cash until we post the entries to Ledger account in ledger book and balance the Cash Ledger Account. A Cash Disbursement Journal, also known as a Cash Outflow Journal, records all cash payments made by the organization. It includes payments for various expenses such as salaries, utilities, suppliers, and other operating costs.

  • When a payment is made, an original receipt is obtained from the payee.
  • This type of cash book is used by businesses who want to track each individual transaction in the most detail possible.
  • The opening balance of cash in hand and cash at the bank are recorded on the debit side in the cash and bank columns, respectively.
  • A triple-column is an extended version of the double-column cash book.

We are pleased to tell you that this template is free to download. Therefore you do not have to think about the money, the template is cost-efficient. This might be the one that you think suits the cash flow statements. In manual books, Normally a column for Voucher Number &  LF for posting of Ledger Folio is also provided where the respective Leger Folio is entered on posting to the Ledger Account . It is the most readily available form of Current Assets to meet the current obligation of business.

How do you record a cash book?

  1. The date of the cash transaction.
  2. A receipt number for allocating the document to the transaction.
  3. Summary or description of the transaction.
  4. Receipt and currency of the cash revenue or expense.
  5. Provision for tax rates such as sales tax.
  6. The present current cash balance and debit balance.

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