Question

merits and demerits of cash book?​

Answer 1

Answer:

The advantages of a cash book are:

Reliable and proven method of recording all financial transactions.

It can save a lot of money by allowing you to do quite a bit of the work – work that normally your accountant would do.

One disadvantage of cash-basis accounting is that it gives your business a limited look at your income and expenses. Cash basis does not show your business's liabilities. As a result, you may think you have more money to spend than you actually have

Answer 2

Answer:

Merits:

• 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.

Demerits:

• Not very accurate: Since it is only recorded cash transactions and it doesn't include all the transactions.
• As a result, we can't say it is very reliable.
• Plus, under this accounting revenue or expenses is recorded when the company receives or pays cash, even in the different accounting periods.