Livestock Economics, Marketing and Business Management

CASH BOOK

• The subsidiary book for all cash receipts and payments other than for petty expenses (When there is a separate petty cash book) is the Cash Book.

Types of Cash Book

• The cash book can be any one of the following types

Simple Cash Book

• Simple cash book is like an ordinary cash account.
• Its format is given below.

                                                                                                                                    

Dr.				Cr.
Date	Particulars	L.F	Amount	Date	Particulars	L.F	Amount
0
0
0

Two columnar cash book

• Cash book with cash and discount columns only
• Cash book with bank and discount columns only

Three columnar cash book

• Cash book with cash, bank and discount columns only

Multi-columnar cash book

• In practice, there are three main types of cash books which are explained as follows

Two columnar Cash book

• Cash book with Cash and Discount Columns only: In this case, a separate bank account will be maintained in the general ledger. However all transactions involving cash and/or bank must be passed through the cash book.
• Model: Cash book with Cash and Discount Columns Only                                                                                                                                        

0 Dr						Cr
Date	Receipts	V.No.	L.F	Discount Rs	Amount Rs	Date	Payments	V.No	L.F	Discount Rs	Amount Rs
0
0

• The entries for cash receipts and payments are made in the usual manner. However, wherever discounts are involved, they are entered in the discount column in the same line.
• The other point is to be noted that the transactions involving cheque payments are first treated as withdraws of necessary cash from bank and subsequent payment in the form of cash.
• It is also noted that at the end of each period, the cash book is balanced with the words ‘By balance c/d’. However, the discount columns are merely totaled but not balanced.