CASH BOOK OVERVIEW

• Subsidiary book
• Book of prime entry
• Record of: 1. All receipts and payments by cash
• 2. All receipts and payments by cheque

WHY CASH BOOK?

CASH BOOK

• Also known as subsidiary book
• Book of prime entry
• Why book of prime entry?
• Any business will record transactions first in cash book, then over to respective accounts

2-COLUMN CASH BOOK

• Why 2-column?
• One is for cash, the other one for bank
• Recall from grade 9:
• Cash account
• Bank account
• See next slide

ACTIVITY

ACTIVITY 2

WHAT DO YOU FIND?

• Form of ledger, that is,
• receipts in cash or receipts by cheque =. debit
• Payment by cash or payment by cheque = credit
• Recall:
• Cash in - debit cash a/c
• Cash out - credit cash a/c
• Cheques in - debit bank a/c
• Cheques out - credit bank a/c
• Confused?? Check next slide

Simply put

2-column cash book = Cash a/c + Bank a/c

ILLUSTRATION

• You will see my camera focused on a format of a 2-column cash book
• Explanation will follow

WORKED EXAMPLE

Work this out

• May 1: Balance at start: Cash $400
• May 1: Balance at start: Bank $4200
• May 2: Bought goods by cheque $150
• May 7th: Cash purchases $80
• May 11th: Cash sales $200
• May 17th: Paid sundry expenses in cash $20
• May 25th: Withdrew $400 cash for personal use
• May 31st: Received $75 interest on bank account.
• Required: Prepare a 2-columnar cash book for the month of May.

steps to be followed

• Draw simple ledger(debit side and credit side)
• Add another column next to the “Amount($)” column on both debit and credit side
• Name the 2 columns as cash, bank respectively
• identify each transaction and apply concept of “receipt =debit, payments=credit”

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