RECORDING OF TRANSACTIONS
ADVANTAGES OF MAINTAINING SUBSIDIARY BOOKS :
CASH BOOK :
Cash book shows all the transactions related to cash receipts and payments. Cash book serves two purposes. First, all the cash transactions are recorded first time in cash book it becomes BOOK OF ORIGINAL ENTRY. Second, there is no need to prepare Cash a/c in ledger it also play the role of Principal Book.
Simple Cash Book :
All the cash receipts are shown in left hand side i.e. Debit side and all the cash payments are shown in right hand side i.e. Credit side.
Points to Remember :
Enter the following transactions in a Simple Cash Book :
2011 |
|
2011 |
|
||
Jan. 1 |
Cash in Hand |
12,000 | Jan. 5 |
Received from Ram |
3,000 |
Jan. 7 |
Paid rent |
300 | Jan. 8 |
Sold goods |
3,000 |
Jan.10 |
Paid to Shyam |
7,000 | Jan. 15 Purchased goods |
|
|
|
|
|
|
from Mohan |
5,000 |
Jan. 27 |
Purchased |
2,000 | Jan. 31 Paid Salaries |
1,000 |
|
|
furniture |
|
|
|
|
Solution :
In the Books of...
CASH BOOK
Dr. Receipts Payments Cr. Date
2011
Particulars
L.F.
Date
2011
Particulars
L.F.
Jan. 1
Jan. 5
Jan. 8
Feb. 1
To Balance b/d
To Ram
To Sales A/c
To Balance b/d
12,000
3,000
3,000
Jan. 7
Jan.10
Jan. 27
Jan. 31
Jan. 31
By Rent A/c
By Shyam
By Furniture A/c
By Salaries A/c
By Balance c/d
300
7,000
2,000
1,000
7,700
18,000
18,000
7,700
Notes : One can draw the following conclusions :
- In a Simple Cash Book only cash receipts and cash payments are recorded. Credit transactions are not recorded. Purchase from Mohan of j 5,000 on 15th Jan is a credit purchase hence, is not recorded in the Cash Book.
- The debit side is always bigger than the credit side since the payments can never exceed the available cash. This is true even for daily balances.
- It is like an ordinary account.
Cash book with Bank column
A two column cash book enable the management to know the cash and bank
balance instantly. In this book, amount column is divided into Cash and Bank columns.
Dr. FORMAT OF DOUBLE COLUMN CASH BOOK Cr. Date Particulars V.N. L.F. Cash Bank Receipts side Date Particulars V.N.L.F Cash Bank Payments side
CBSE Accountancy Class XI ( By Mr. Aniruddh Maheshwari )
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