Question

Briefly state how the cash book is both journal and a ledger?

Answer 1

Transactions are recorded directly from source documents in the Cash Book, so there is no need to record transactions in the Journal book. Further, on the basis of the cash transactions recorded in the Cash Book, cash and bank balances can be determined, and so there is no need to prepare cash account (which is a part of ledger) separately. Thus, the Cash Book serves the purpose of both Journal as well as ledger.
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Answer 2

Answer:

A cash book is both a journal as well as a ledger. The cash book is a journal because it records the cash transactions from the source document for the first time and then these are posted in the respective ledger accounts. The cash book is a ledger in the sense that it serves the purpose of a cash account also. When the cash book is prepared, the Cash A/c is not required to be prepared. Thus, the cash book serves the purpose of a subsidiary book as well as the principal book.