Cash Book Examples

Examples of Cash Book

The following Cash Book examples provide an outline of the most common Cash Books. Cashbook is a financial journal which contains all the cash receipt and cash payments including the deposit in bank and withdrawal from the bank. Here all transactions have the two sides i.e., debit and credit. All the receipts in cash are recorded on the left side of the cash book entries whereas all the payments in cash are recorded on the right side of the cash book entries. The difference which arises between the sum of balances of the right side and the left side shows the balance of the cash on hand. There are various examples of the Cash Book entries followed according to the different situations by different companies. In this article, we take two types of examples of cash book – Single Column and Double Column

Top 2 Practical Examples of Cash Book Entries

Some of the examples of Cash Book entries are given below showing the different situations:

Example #1 – Single Column

Under a single column cash-book, only cash transactions done by the business are recorded. It has only a single money column on debit and credits both sides which is titled as “amount”. As it records only the accounting transaction related to cash so entries which involve banks or discounts such as checks received, checks issued, sales discount or purchases discount are not recorded

For example:

Mr. Y started the business with the capital of $ 50,000 on April 1, 2019. Out of the capital invested, $ 20,000 is deposited in the bank account on the same day. During the month of April 19, he identified the following transactions. Prepare the necessary single column Cash-book using the data as given below:

Solution

Example #2 – Double Column

The transactions done on credit are not recorded in the cash book. So the transactions Purchase from Mr. X on credit and Goods sold on credit on 18 April are not considered while preparing the cash book entries.

In the present modern world, almost all transactions are done with the use of the bank account of the company. So, it was required to present one more column to the single-column cash-book. For this double column cash – the book is used. Under double-column cash-book, not only cash transactions but transactions through banks done by the business are also recorded.

For example:

Mr. X runs a business.  During the month of April 19, the following transactions took place in the business. Prepare the necessary double-column Cash-book using the data as given below:

Solution

The transactions which are done on credit are not recorded while preparing the double column cash –book. In the case of double column cash- book, cash column records all the transactions relating to cash so, it works as the cash accounts and the bank column records all the transactions relating to bank such as checks received, checks issued, etc so, it works as the bank accounts.

Conclusion

Cashbook is prepared like a ledger where all the cash transactions of the company are recorded and entered according to date. It is a book containing the original entry and the final entry which means that cash book serves as the general ledger. In the case of a cash book, there is no requirement to transfer the balances to the general ledger which is required in case of the cash account. Entries in cash book are posted then to the corresponding general ledger.

Recommended Articles

This has been a guide to Cash Book Examples. Here we discuss various examples of the cash book entries (single column and double column) along with detailed explanation. You can learn more about financing from the following articles –

• Cash Equivalents Meaning
• Petty Cash Book Meaning
• Cash Flow Statements Purpose
• Cash Receipt Meaning