Cash book
What is a cash book?
The cash book records every receipt into the bank and every payment out of it.
Receipts go on the debit side. Payments go on the credit side.
It is a book of prime entry and part of the double entry at the same time: the cash book is the Bank account.
Example
A cash book starts the month with a balance of £1,400.00. Receipts come to £900.00 and payments come to £650.00. The balance at the end of the month is £1,650.00.
Why it matters
It is the business's own record of its money in the bank. It rarely shows the same balance as the bank statement on the same day, so the two are reconciled.
Practise it
Module, 5 rooms, PremiumThe cash book
Practise it nowThe cash book and petty cash
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].