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A cash book serves as a book of prime entry because it is the first place where all cash transactions are recorded in chronological order. It captures the details of cash receipts and payments as they occur. Additionally, the cash book also functions as a ledger account because it summarizes all cash transactions in one account, showing the opening balance, all transactions during a specific period, and the closing balance. This dual role of the cash book as both a book of prime entry and a ledger account provides a comprehensive record of all cash-related activities in the business.
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What is dual function of the cash book as a book of prime entry?
it serves as a prime book as well as a ledger
What is the difference between cash book and cash 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.
Why cashbook is a book of prime entry and part of the double entry system?
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.
What is the book of final entry?
ledger
What is double entry treatment of DISCOUNT Allowed and Received?
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.
What is dual function of the cash book as a book of prime entry?
it serves as a prime book as well as a ledger
How the cash book is both a book of prime entry and a ledger account?
The cash book serves as a book of prime entry because it records all cash transactions as they occur, providing a chronological record of cash receipts and payments. Simultaneously, the cash book also acts as a ledger account since it summarizes all cash transactions in one account, showing the opening and closing balance of cash at the end of the accounting period.
What is the difference between cash book and cash 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.
Why cashbook is a book of prime entry and part of the double entry system?
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.
What is the book of final entry?
ledger
Why is ledger called a book of final entry?
Because it is prepared from the journal which is the book of "original entry".
What is double entry treatment of DISCOUNT Allowed and Received?
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.
What is an account book?
An account book is a book in which financial accounts are kept - also called a ledger.
How is a ledger or account book is maintained?
When a transaction occurs, a journal entry is made coinciding with this transaction. Later these transactions are posted from the journal to the ledger, then a trial balance is made to insure that the accounts are accurate and "balance".
What does ledger mean?
It means a account book.
What book is the drawings account kept?
general ledger
Why a cashbook is called Journalised ledger?
Cash book is a journal because the transactions are recorded in it for the first time from the source of document and from journal these transactions are posted to the respective account in the ledger. We can say cash book is a ledger also in the sense that it serves the purpose of cash account also.As such cash book is journal as well as ledger, and hence it may call journalised ledger.
