The cash book

Book keeping can be define as the art of recording business transaction . These recordings are done from source documents such as the invoice and credit note.

Meaning of Cash Book

Cash book means the cash account. It is part of the ledger which is kept by a cashier

Cash account is an account in which all receipts and cash payments transaction are recorded. The cash book has two sides namely, the debit side which is on the left hand side where all cash receipts are recorded , the credit side is on the right hand side where all cash payments are recorded. At  the end of a given period, the cash book is to be balanced. To do this, the total of each side that is debit and credit side of the cash book is calculated. The smaller one which is the credit side is subtracted from the debit side to give the amount of money left in the cash book. The balance is then entered in the credit side as balance carried down to make the total of the debit and credit side equal. This amount must be the same as the amount left in the cash book. The balance is then brought down and carried forward in another period on the debit side.

The rule of preparing cash account

• Debit what comes in
• Credit what goes out

Types of cash book

1. The single column cash book
2. The double column cash book
3. The three column cash book:

Meaning of Contra Entries

Contra Entries, is a situation whereby money may be withdrawn from the bank for office use or part of the cash in hand may be paid into the bank. These are called contra entries of the two column cash book. For example, cas withdrawn from the bank for office use, two transactions will be recorded.

1. Cash column is debited as cash accounts receive the money
2. Bank column is credited as bank accounts gives the money