what is cash book?Explain it?write its advantages?
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The book in which all cash transactions (either cash is received or paid) are primarily recorded according to dates, is called 'Cash Book'.
A Cash Book has the following features:
1. It plays a dual role. It is both a book of original entry as well as a book of final entry. All cash transactions are primarily recorded in it as soon as they take place; so it is a journal (a book of original entry). On the other hand, the cash aspect of all cash transactions is finally recorded in the Cash Book (no posting in Ledger); so a Cash Book is also a Ledger (a book of final entry).
2. Only one aspect of cash transaction is posted to the ledger account. The other aspect ( i.e. cash aspect) needs no posting in Cash A/c. Since the Cash Book is the substitute for Cash A/c, no Cash A/c is opened in the ledger.
3. It has two identical sides-left hand side, the debit side and right hand side, the credit side.
4. All the items of cash receipts are recorded on the left hand side and all items of cash payments on the right hand side in order of date.
5. The difference between the total of two sides shows cash in hand.
6. Its balance is verified by counting actual cash in the cash box.
7. It always shows debit balance. It can never show credit balance.
ADVANTAGES -
1. Daily cash receipts and cash payments are easily ascertained.
2. Cash in hand at any time can easily be ascertained through Cash Book balance.
3. Any mistake in the book can be easily detected at the time of verification of cash.
4. Any defalcation of money can be detected while verifying cash.
5. Since cash is verified daily, Cash Book is always kept up-to-date.
Hope it helps u
A Cash Book has the following features:
1. It plays a dual role. It is both a book of original entry as well as a book of final entry. All cash transactions are primarily recorded in it as soon as they take place; so it is a journal (a book of original entry). On the other hand, the cash aspect of all cash transactions is finally recorded in the Cash Book (no posting in Ledger); so a Cash Book is also a Ledger (a book of final entry).
2. Only one aspect of cash transaction is posted to the ledger account. The other aspect ( i.e. cash aspect) needs no posting in Cash A/c. Since the Cash Book is the substitute for Cash A/c, no Cash A/c is opened in the ledger.
3. It has two identical sides-left hand side, the debit side and right hand side, the credit side.
4. All the items of cash receipts are recorded on the left hand side and all items of cash payments on the right hand side in order of date.
5. The difference between the total of two sides shows cash in hand.
6. Its balance is verified by counting actual cash in the cash box.
7. It always shows debit balance. It can never show credit balance.
ADVANTAGES -
1. Daily cash receipts and cash payments are easily ascertained.
2. Cash in hand at any time can easily be ascertained through Cash Book balance.
3. Any mistake in the book can be easily detected at the time of verification of cash.
4. Any defalcation of money can be detected while verifying cash.
5. Since cash is verified daily, Cash Book is always kept up-to-date.
Hope it helps u
Answered by
1
Cash book is such type of book in which all the cash recept & payment is record. Cash book is use ful for all type of organization to maintain daily cash receipt & Payment
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