Page 48 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 3: Sub-division of Journals

Kinds of Cash Book Notes

Generally, four types of cash book are prepared. These are:
1. Simple cash book with one column
2. Cash book with discount column also known as two columns cash book
3. Cash book with Bank and discount column also known as three columns cash book

4. Petty Cash Book
Simple Cash Book

Simple cash book is also known as one column cash book. This is just like cash account where all
the transactions relating to receipts and payments of cash are recorded. All the receipts are
shown on the debit side of the account which is on the left-hand side whereas all the payments
are put on the credit side of the account which is on the right-hand side. This Cash Book is used
only by such columns where neither discount is offered or accepted nor any cheque is issued or
accepted. If the above type of situation arises, then recording is done in a separate book known
as the journal.
The following is the proforma of simple cash book.
Simple Cash Book
Dr. Cr.
Date Particulars L.F. Amount Date Particulars L.F. Amount
(Receipts) ( ) (Payments) ( )

The first column of cash book is meant for date of transaction whereas second column is meant
for receipts of cash and third column is meant for noting the page No. of account in the ledger
folio and fourth column is meant for amount. Similarly column 5 again is for date, column 6 for
payments of cash, column 7 for ledger folio and column 8 for amount.

Balancing of Cash Book

The Cash Book is closed like any other accounts by taking a balance if the receipts are more than
payments and if it is there it is a debit balance to be shown on the credit side of the account as
balance c/d and during next month or year it is shown on the debit side of the Cash Book as
balance b/d.

LOVELY PROFESSIONAL UNIVERSITY 43