Question

What is the advantage of the cash book without cash column??

Answer 1

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:

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.

Answer 2

Posting entries from single column cash book to ledger accounts

All entries in the cash book are periodically posted to appropriate accounts in general ledger and relevant subsidiary ledgers. The posting procedure is given below:

The balance b/d and balance c/d (i.e., opening and closing balances) of the cash book are not posted.

The entries on the debit side (or receipt side) of the cash book are posted to the credit side of relevant accounts in the ledger.

The entries on the credit side (or payment side) of the cash book are posted to the debit side of relevant accounts in the ledger.

The page numbers of the ledger accounts (i.e., account numbers) to which the entries have been posted are written in the posting reference column of the single column cash book. It makes easy to locate an account in the ledger to which an entry has been posted.