It is the book that records all the cash transactions such as cash receipts and cash payments. It serves in the dual role of a ledger as well as a journal, all the transactions are first recorded in the cash book and thereafter recorded to various Ledger accounts. Thus, it is both a subsidiary book as well as ledger account. The debit side is known as the Receipt side and the credit side is known as the payment side.
Types of Cash Book
There are mainly three types:
- Single column
- Double column
- Three column
1. Single Column: In this only cash received and cash payments are recorded. It has only one money column on the debit side and the other on the credit side.
2. Double column: It consists of two separate columns on the debit side as well as on the credit side for recording cash and discount. In many business concerns, it is customary for the traders to allow or to receive small allowances off or against the dues. These allowances are made for prompt settlement of accounts.
3. Three columns: The cash book in which there are three columns on each side. One is used to record the cash transaction, the second is used to record the bank transaction and the third one is used to recording the discount allowed or discount received.
