Question

Advantage of cash book​

Answer 1

Answer:

Generally, cash transactions are numerous. What is credit transaction today, will be cash transactions tomorrow. In other words, all credit transactions are finally settled by cash. If like all other transactions cash transactions are also recorded primarily in Journal, the cash aspect of the transactions will be required to be posted to Cash A/C, in the Ledger separately. This involves much time and labour. This is why cash transactions are recorded in a separate book named Cash Book. It saves much time and labour. Besides this the Cash Book renders the following benefits:

Daily cash receipts and cash payments are easily ascertained.

Cash in hand at any time can easily be ascertained through Cash Book balance.

Any mistake in the book can be easily detected at the time of verification of cash.

Any defalcation of money can be detected while verifying cash.

Since cash is verified daily, Cash Book is always kept up-to-date.

Answer 2

Answer:

• Reliable and proven method of recording all financial transactions.
• It can save a lot of money by following your to do quite a bit of the work - work that normally your accountant would do.