News Cash Mass - Meaning, Features, Advantages Together With Format Of Cash Book
Every trace of piece of occupation organisation receives cash in addition to pays cash practically every day, all the receipts in addition to payment of cash are recorded inwards a split majority called the cash book.
In modern times cash includes non entirely legal tender money likes notes in addition to coins merely too other variety out of money similar cheques, banking concern drafts etc.
Definition:
The majority inwards which all cash transactions (either cash is received or paid) are primarily recorded according to dates, is called 'Cash Book'.
Features:
A Cash Book has the next features:
1. It plays a dual role. It is both a majority of master copy entry every bit good every bit a majority of concluding entry. All cash transactions are primarily recorded inwards it every bit shortly every bit they own got place; then it is a magazine (a majority of master copy entry). On the other hand, the cash human face of all cash transactions is lastly recorded inwards the Cash Book (no posting inwards Ledger); then a Cash Book is too a Ledger (a majority of concluding entry).
2. Only i human face of cash transaction is posted to the ledger account. The other human face ( i.e. cash aspect) needs no posting inwards Cash A/c. Since the Cash Book is the substitute for Cash A/c, no Cash A/c is opened inwards the ledger.
3. It has 2 identical sides-left mitt side, the debit side in addition to correct mitt side, the credit side.
4. All the items of cash receipts are recorded on the left mitt side in addition to all items of cash payments on the correct mitt side inwards companionship of date.
5. The divergence betwixt the full of 2 sides shows cash inwards hand.
6. Its residual is verified past times counting actual cash inwards the cash box.
7. It ever shows debit balance. It tin flame never demo credit balance.
Advantages:
Generally cash transactions are numerous. What is credit transaction today, volition live cash transactions tomorrow. In other words, all credit transactions are lastly settled past times cash. If similar all other transactions cash transactions are too recorded primarily inwards Journal, the cash human face of the transactions volition live required to live posted to Cash A/C, inwards the Ledger separately. This involves much fourth dimension in addition to labour. This is why, cash transactions are recorded inwards a split majority named Cash Book. It saves much fourth dimension in addition to labour. Besides this the Cash Book renders the next benefits:
1. Daily cash receipts in addition to cash payments are easily ascertained.
2. Cash inwards mitt at whatever fourth dimension tin flame easily live ascertained through Cash Book balance.
3. Any error inwards the majority tin flame live easily detected at the fourth dimension of verification of cash.
4. Any defalcation of money tin flame live detected spell verifying cash.
5. Since cash is verified daily, Cash Book is ever kept up-to-date.
Specimen/format of Simple Cash Book:
Columns of the Cash Book are Explained Below:
1. Date:
The engagement of transaction is written inwards this column inwards 2 lines—in the starting fourth dimension line, the twelvemonth in addition to inwards the minute line, the mention of the calendar month followed past times the actual date.
2. Particulars:
In this column the mention of the contrary trace of piece of occupation organisation human relationship is written (the minute human face of cash transaction). Below this is written the narration of the transaction.
3. L.F. (Ledger Folio):
The page number of the Ledger where the concerned (opposite ) trace of piece of occupation organisation human relationship has been opened, is written inwards this column. This volition assist to locate the trace of piece of occupation organisation human relationship from the Ledger. It may live noted that inwards a Ledger trace of piece of occupation organisation human relationship J.F. is written every bit reference, spell inwards a Cash Book L.F. is written. It is so, because cash transactions are non recorded inwards whatever Journal.
4. Amount:
The total of the transaction is recorded inwards this column. The total of cash received is recorded on the debit side inwards total column in addition to the total of cash paid is recorded on the credit side inwards total column.
5. V. NO. (Voucher Number):
The voucher number of each exceptional of receipt in addition to payment is too written. Influenza A virus subtype H5N1 voucher is necessary for each exceptional of receipt in addition to payment. Generally, a voucher has a series number in addition to this number-is written inwards this column (V. No).
When cash is received from a debtor or customer, to a greater extent than oft than non a receipt or 'cash memo' is issued to the debtor which is called Receipt Voucher. Again, when money is paid to a creditor or supplier a receipt is obtained from him which is called 'Payment Voucher, Cash transactions are recorded inwards the Cash Book on the dry reason of Receipt Voucher in addition to Payment Voucher.
Thus, a document evidencing cash receipts in addition to payments in addition to forming the dry reason for making entries inwards the Cash Book is called Cash Voucher.
Source: http://www.accountingexplanation.com/definition_and_explanation_of_cash_book.htm