what is cash book? explain the different types of cash book. Draw the format of different types of cash books with at least five items in each.
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Cash Book: In Cash book, we will record the all-cash transaction of the business. This book keeps all cash payment and cash receipts. it is the book of original entries because first of all, we record the all-cash transaction in this book and then posted these transactions into the various ledger accounts.
Here are the three type of Cash Books shown below:
1. Single Column
2. Double Column
3. Triple Column
1. Single Column: This type of cash book is very simple because it is similar to the cash account. it has only one column on both sides. Debit side of cash book shows the all receipt and credit side shows all the payment made.
2. Double Column: Double Column Cashbook has a two account column on both sides of the cash book. it is three Type shown as below: 1. Discount and Cash Column 2. Bank and Cash Column 3. Discount and Bank Column Cash Book is an original entry book So we need to record full transaction but in single column cash book, it is not possible to record properly of those cash transactions which are including discount account also. So we need discount and cash column cash b00K. For example, Received cash from Pawan for Rs 9900/- and allow discount Rs 100/.
The journal entry of this transaction will be Cash A/c Dr. 9,900 Discount A/c Dr. 100 To Pawan a/c 10,000/- In Single column cash book, it not possible to record full transaction because we did not have any column for recording the amount of discount. So We have to prepare double column cash book.
3. Triple Column Every Businessman has a minimum of on current account in the bank. it is a very convenient way for him to get paid by cheque and make payment to others by cheque. So, he has to record these payments and receipts in the cash book for this an additional column will require name bank column. So now total three column will be required to record proper payment and receipts in the cash book these are shown below 1. Cash Column 2. Bank Column 3. Discount Column
Here are the three type of Cash Books shown below:
1. Single Column
2. Double Column
3. Triple Column
1. Single Column: This type of cash book is very simple because it is similar to the cash account. it has only one column on both sides. Debit side of cash book shows the all receipt and credit side shows all the payment made.
2. Double Column: Double Column Cashbook has a two account column on both sides of the cash book. it is three Type shown as below: 1. Discount and Cash Column 2. Bank and Cash Column 3. Discount and Bank Column Cash Book is an original entry book So we need to record full transaction but in single column cash book, it is not possible to record properly of those cash transactions which are including discount account also. So we need discount and cash column cash b00K. For example, Received cash from Pawan for Rs 9900/- and allow discount Rs 100/.
The journal entry of this transaction will be Cash A/c Dr. 9,900 Discount A/c Dr. 100 To Pawan a/c 10,000/- In Single column cash book, it not possible to record full transaction because we did not have any column for recording the amount of discount. So We have to prepare double column cash book.
3. Triple Column Every Businessman has a minimum of on current account in the bank. it is a very convenient way for him to get paid by cheque and make payment to others by cheque. So, he has to record these payments and receipts in the cash book for this an additional column will require name bank column. So now total three column will be required to record proper payment and receipts in the cash book these are shown below 1. Cash Column 2. Bank Column 3. Discount Column
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