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The cash book is a book of prime (original) entry because it is written up from business documents. The cash book is part of the double entry system as it acts as ledger accounts for cash and bank.
When double entry for both side of cash books appears that type of transaction is called contra entry as in double column cash book entry for receiving or paying cash in bank or from bank requires entry on debit as well as credit side of cash book.
"a system of book-keeping in which as a rule only records of cash and of personal accounts are mainted, it is always incomplete double entry, varying cicrumstances."
5 examples of single entry cash book
There will be no entry in cash book when cheque is paid into bank if cash was deposited into bank then there will be entry in cash book
The cash book is a book of prime (original) entry because it is written up from business documents. The cash book is part of the double entry system as it acts as ledger accounts for cash and bank.
When double entry for both side of cash books appears that type of transaction is called contra entry as in double column cash book entry for receiving or paying cash in bank or from bank requires entry on debit as well as credit side of cash book.
"a system of book-keeping in which as a rule only records of cash and of personal accounts are mainted, it is always incomplete double entry, varying cicrumstances."
5 examples of single entry cash book
In a double entry accounting system, you decrease the cash account with a credit.
There will be no entry in cash book when cheque is paid into bank if cash was deposited into bank then there will be entry in cash book
Contra refers 'Opposite'. In double entry system when bank and cash transcations are occured with each as cash deposit/withdrawn.
The primary bookkeeping record in single-entry bookkeeping is the cash book, which is similar to a cheque account register but deals with the income and expenses to various income and expense accounts. Double-entry bookkeeping is a system in which every entry to an account requires a corresponding and opposite entry to a different account.
Cash Account :- 1. Is an account in the ledger. 2. Cash account is part of the ledger. Cash account is opened in the ledger in which posting is done from some book of original entry. 3. In cash account posting is not followed by narration. 4. It only records one aspect of transaction involving cash & bank. Cash Book :- 1. Is a separate book of account forming a part of accounting system. 2. Cash book records entries directly from transaction & there is no need for a book of prime entry. 3. In cash book entries are followed by narration also. 4. It records both the aspect of this transaction in cash & bank columns to complete double entry posting.
Drawings in accounting are recorded as a double entry in the cash book. This is a credit to the bank account and a debit to the cash account.
it serves as a prime book as well as a ledger
Discount allowed: original entry made in the discount allowed column on the debit side of the cash book and at the end of the month debited(after balancing the cash book) in the nominal ledger. The credit entry is made in the personal account of buyer. Discount received: original entry made in the discount received column on the credit side of the cash book and at the end of the month credited(after balancing the cash book) in the nominal ledger. The debit entry is made in the personal account of seller.