CASH BOOK & SPECIAL PURPOSE SUBSIDIARY BOOKS
CASH BOOK & SPECIAL PURPOSE SUBSIDIARY BOOK
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Cash Book- Simple Cash Book (Single Column):
WATCH THE VIDEO BY CLICKING ON THE LINK BELOW FOR SINGLE COLUMN CASH BOOK:
SINGLE COLUMN SIMPLE CASH BOOK
Balancing of Single Column Cash Book
Like any other Ledger Account Cash Book is also balanced. Total of Payment side is deducted from the Total of Receipt side,
Points to be considered for preparing Single Column Cash Book
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Important Note
Cash Book always have a debit balance, in no case it can have a credit balance. If there is a credit balance this shows Cash Payments is in excess of Cash Receipts which is practically impossible. Although it may be possible that the closing balance of the Cash Book is nil and it is possible only in one case i.e. where Cash Receipts are exactly equal to Cash Payments.
Introduction to Single Column Cash Book
It has a structure similar to an account. There is only one column (i.e. Cash) on both the sides of the Cash Book. Left Side (Debit side) of the Cash Book consists of Cash Receipts and Right Side (Credit side) consists of Cash Payments.
Format of Single Column Cash Book
It has a structure similar to an account. There is only one column (i.e. Cash) on both the sides of the Cash Book. Left Side (Debit side) of the Cash Book consists of Cash Receipts and Right Side (Credit side) consists of Cash Payments.
Cash Book
| |||||||||
Dr.
|
RECEIPTS
|
PAYMENTS
|
Cr.
| ||||||
Date
|
Particulars
|
V.No.
|
L.F.
|
Amount (Rs)
|
Date
|
Particulars
|
V.No.
|
L.F.
|
Amount
|
Balancing of Single Column Cash Book
Like any other Ledger Account Cash Book is also balanced. Total of Payment side is deducted from the Total of Receipt side,
Points to be considered for preparing Single Column Cash Book
Important Note
Cash Book always have a debit balance, in no case it can have a credit balance. If there is a credit balance this shows Cash Payments is in excess of Cash Receipts which is practically impossible. Although it may be possible that the closing balance of the Cash Book is nil and it is possible only in one case i.e. where Cash Receipts are exactly equal to Cash Payments.
EXAMPLE:
Date
|
Particulars
|
Amount
|
2013
| ||
June 01
|
Rajesh Talwar commenced business with Cash
|
10,000
|
June 03
|
Purchased Goods
|
4,200
|
June 04
|
Sold goods for Cash
|
6,500
|
June 08
|
Paid Rent
|
1,200
|
June 09
|
Paid Electricity Expenses
|
1,500
|
June 12
|
Received Cash from Ajay
|
1,800
|
June 14
|
Paid Cash to Ankush
|
1,350
|
June 17
|
Paid for Miscellaneous Expenses
|
50
|
June 19
|
Purchased furniture for office use
|
980
|
June 22
|
Deposited into Bank
|
1,020
|
June 25
|
Paid Salaries
|
650
|
June 30
|
Paid to Kishore
|
1,120
|
Solution:
Cash Book
| |||||||
Dr.
|
RECEIPTS
|
PAYMENTS
|
Cr.
| ||||
Date
|
Particulars
|
L.F.
|
Amount
|
Date
|
Particulars
|
L.F.
|
Amount
|
2013
|
2013
| ||||||
June 01
|
Capital A/c
|
10,000
|
June 03
|
Purchases A/c
|
4,200
| ||
June 04
|
Sales A/c
|
6,500
|
June 08
|
Rent A/c
|
1,200
| ||
June 12
|
Ajay
|
1,800
|
June 09
|
Electricity Expenses A/c
|
1,500
| ||
June 14
|
Ankush
|
1,350
| |||||
June 17
|
Miscellaneous Expenses A/c
|
50
| |||||
June 19
|
Furniture A/c
|
980
| |||||
June 22
|
Bank A/c
|
1,020
| |||||
June 25
|
Salaries A/c
|
650
| |||||
June 30
|
Kishore
|
1,120
| |||||
June 30
|
Balance c/d
|
6,230
| |||||
18,300
|
18,300
| ||||||
2013
| |||||||
July 01
|
Balance b/d
|
6,230
| |||||
Cash Book- Double Column Cash Book:
WATCH THE VIDEO BY CLICKING ON THE LINK BELOW FOR DOUBLE COLUMN CASH BOOK:
Cash Book
| ||||||||||||
Dr.
|
Receipts
|
Payments
|
Cr.
| |||||||||
Date
|
Particulars
|
V.No.
|
L.F.
|
Bank (Rs.)
|
Cash (Rs.)
|
Date
|
Particulars
|
V.No.
|
L.F.
|
Bank (Rs.)
|
Cash (Rs.)
| |
Balancing of Double Column Cash Book (Cash and Bank Column)
Like Single Column Cash Book, Double Column Cash Book is also balanced. Total of Payment side is deducted from the Total of Receipt side,
Remember Discount Columns on the Debit as well as Credit side of the book is only totaled not balanced. This is because both discount allowed and discount received are nominal accounts and are treated as expenses and incomes of the business respectively. Therefore, being nominal in nature they are never balanced simply totaled
Like Single Column Cash Book, Double Column Cash Book is also balanced. Total of Payment side is deducted from the Total of Receipt side,
Remember Discount Columns on the Debit as well as Credit side of the book is only totaled not balanced. This is because both discount allowed and discount received are nominal accounts and are treated as expenses and incomes of the business respectively. Therefore, being nominal in nature they are never balanced simply totaled
Example 1:
Date
|
Particulars
|
Rs.
|
2019
Feb.1
Feb.3
Feb.7
Feb.12
Feb.15
Feb.24
Feb.26
Feb.28
|
Cash in Hand
Bank Overdraft
Wages Paid
Cash Sales
Discount Allowed
Cash Deposited in the bank
Goods purchased and payment made by cheque
Received Cash Discount
Paid Rent
Drew from bank for personal use
Salary paid
|
50,000
25,000
1,500
80,000
500
35,000
15,000
450
3,000
2,000
5,000
|
Answer:
Date
|
Particulars
|
L.F.
|
Cash(Rs.)
|
Bank(Rs.)
|
Date
|
Particulars
|
L.F.
|
Cash(Rs.)
|
Bank(Rs.)
| ||
2019
Feb.1
|
To balance b/d
|
50,000
|
2019
Feb.1
|
By balance b/d
|
25,000
| ||||||
Feb.3
|
To Sales A/c
|
79,500
|
Feb.3
|
By Wages A/c
|
1,500
| ||||||
Feb.12
|
To Cash A/c
|
C
|
35,000
|
Feb.12
|
By Bank A/c
|
C
|
35,000
| ||||
Feb.15
|
By
Purchases A/c
|
14,550
| |||||||||
Feb. 28
|
To balance c/d
|
6,550
|
Feb.24
|
By Rent A/c
|
3,000
| ||||||
Feb.26
|
By Drawings A/c
|
2,000
| |||||||||
Feb.28
Feb.28
|
By Salary A/c
By balance c/d
|
5,000
85,000
| |||||||||
1,29,500
|
41,550
|
1,29,500
|
41,550
| ||||||||
WATCH THE VIDEO BELOW FOR CONTRA TRANSACTIONS
Subsidiary Books- Meaning and Introduction:
Introduction
Accounting process starts with identification of transactions of financial and non-financial nature. All financial transactions are first recorded in Journal. This is known as Books of Original entry. A small business has lesser number of transactions and therefore, it is possible to record all business transactions in one book i.e. Journal. However, when business grows, the number of business transaction also increases. It is very time-consuming, difficult and tedious task for a firm to record such voluminous transactions and events in one single book. Thus, in order to save time and efforts, it is advisable to sub-divide the Journal into Subsidiary Books to record the transactions of similar nature in a separate book. These sub-divided Journals are popularly known as Subsidiary Books. These books are also termed as Special Purpose Books or Special Journals or Books of Original/Primary/Prime Entry. Sub-division of Journal provides scope for division of work which leads to the improvement in efficiency and effectiveness. In other words, subsidiary books provide an ease and convenience to record the transactions of similar nature in a separate book. Journal entry is not required for the transactions which are entered in these books.
Need for Subsidiary Book or Special Purpose Books
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Accounting process starts with identification of transactions of financial and non-financial nature. All financial transactions are first recorded in Journal. This is known as Books of Original entry. A small business has lesser number of transactions and therefore, it is possible to record all business transactions in one book i.e. Journal. However, when business grows, the number of business transaction also increases. It is very time-consuming, difficult and tedious task for a firm to record such voluminous transactions and events in one single book. Thus, in order to save time and efforts, it is advisable to sub-divide the Journal into Subsidiary Books to record the transactions of similar nature in a separate book. These sub-divided Journals are popularly known as Subsidiary Books. These books are also termed as Special Purpose Books or Special Journals or Books of Original/Primary/Prime Entry. Sub-division of Journal provides scope for division of work which leads to the improvement in efficiency and effectiveness. In other words, subsidiary books provide an ease and convenience to record the transactions of similar nature in a separate book. Journal entry is not required for the transactions which are entered in these books.
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good morning mam kevin sunil pappan 11B
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