A dual column cash book can be of two types, the one which has cash and discount columns and the other which has cash and bank columns. However, double column cash book (with the discount column) is widely used. A cash book records all the cash receipts on the debit side and all the cash payments of the organisation on the credit side. The three column cashbook uses three columns on each side of the book. This format in effect combines both two column formats discussed above in that it uses the additional columns to record both discounts and bank account transactions. In addition to detailing cash and bank transactions, a triple-column or three-column cash book shows additional information about sale and purchase discounts.

What are the two equal parts of single column cash book?

This includes both the money that has been deposited and the money that has been withdrawn. The cash flows will change with every transaction that is recorded in the petty cash book. When money is received, it is recorded in the cash book as a debit. However, there are different types of cash books which can be more complicated.

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Cash books have two sides (left-hand side and right-hand side) where all receipts in cash are recorded on the left side, and all payments in cash are recorded on the right side. This type of cash book records transactions of three accounts. It has three columns, one for cash, one for the bank, and another one for discounts. Thus maintaining triple column cash book substitutes, cash account, bank account, and discount accounts. The easiest and simplest cash book meaning is a book that records every cash transaction of the business.

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Big organizations normally appoint one or more cashier known as ‘Petty Cashier’ and assign the handling of petty expenses. For this purpose petty cash book is to be maintained by such employee. The petty cashier so appointed for recording the small and petty expenses works on the imprest system.

• Triple-column cash books have two columns similar to the double-column cash book.
• Cash books contain all cash receipts and payments and bank deposits and withdrawals.
• These will provide a detailed overview of the business’ financial health.
• At the end of fixed period, the petty cashier submits the details of petty expenses, and the chief cashier again advances a fixed amount for the next fixed period.
• It will show the date of the transaction, name of the customer (if any), account to be debited (positive amount) or credited (negative amount).
• The opening balance of cash in hand and cash at the bank are recorded on the debit side in the cash and bank columns, respectively.

FAQs on Cash Books

In this column total of various expenses paid by same voucher and on the same day are recorded at one place. The total amount column is followed by number of columns for recording the heads of items which are most common in the business enterprise. Again, the three column cash ledger diagram below shows only one side of the cashbook, in this case the left hand receipts side (debit). The two column cash ledger book is sometimes referred to as the double column cash book or the 2 column cash book. Again, for simplicity, the two column cashbook ledger diagram below shows only one side of the cashbook, in this case the left hand receipts side (debit). Again, for simplicity, the two column cashbook ledger diagram below shows only one side of the cashbook, in this case the left hand receipts side (debit) .

This cash book has the cash, the discount and additionally the bank columns in it. Since the development of banking most firms, these days prefer to deal in cheques or other such bills of exchange. And so having a bank column in your cash book makes things concise and simpler to understand. It is a special book that will record only one type of transactions – cash transactions. In an organization thousands of cash transactions occur in a year and journalizing them all is tedious work. Let us look at the three the best accounts receivable financing optionss and their functions.

When a cash book is maintained separately, there is no reason to keep a cash account in the ledger. For all purposes, a cash book is treated like a cash account (a part of the ledger). Cash books can function as a journal or book of prime entry since all transactions are recorded as and when they occur. It also acts as part of the ledger because it has cash and bank accounts. A petty cash book is often mistaken as a type of cash book like a single or double-column. It is specifically for recording less number of transactions with smaller amounts.

Discounts allowed are placed on the debit side, while discounts received will be on the credit side (they are an income). Then, the three-column cash book is the most detailed and comprehensive. It comprises three columns, each on the debit and credit side. One column has cash transactions, the second records bank transactions, and the third has transactions relating to discounts allowed and received. Three are needed for discounts received and paid, cash transactions, and bank transactions. Three-column cash books (or triple-column cash books ) have three money columns on the debit and credit sides.

The difference between the sum of balances of the debit and credit sides shows the cash balance on hand or bank account. Cashbook plays a dual role as it is the book of the original entry of the company and the book of the final entry. There are several types of cash books that entities can use, whether they’re businesses or individuals. We’ve highlighted some key details about single-, double-, and triple-column cash books with examples of what each looks like below. Therefore, the total debits in the ledger agree with the credit in the main cash book. In other words, the petty cash book does not form a part of double-entry bookkeeping.

This can be particularly important for legal matters or business transactions, where having documented evidence of payment can be essential for accountability. One of the major benefits of using a cheque is its traceability. Every cheque transaction is recorded in your bank statement, providing a clear trail that can be used to verify payments and ensure transparency between both parties.