Cash Book

Cash Book is a subsidiary book in which all the transaction related to cash are recorded. It part of journal which also acts as a Ledger account for cash. 

It serves the purpose of Cash Account also so a cash book is both journal and ledger.

Types of Cash Books
SINGLE COLUMN CASH BOOK
It records only Cash Receipts and Cash Payments.

TWO (DOUBLE) COLUMNAR CASH BOOK


Cash Column is meant for recording cash receipts and payments
Discount Column is meant for recording discount received and allowed.
Discount Column on the debit side represents the discount allowed 
Discount Column on the credit side represents the discount received.

Discount columns are merely memorandum columns. Discount allowed account and discount received account are opened in the ledger and the totals of discount columns are posted in these accounts.
THREE COLUMN CASH BOOK

This type of cash book contains the following three amount columns on each side
Discount column for discount received and allowed;
Cash column for cash received and cash paid; and
Bank column for money deposited and money withdrawn from the bank.
There is no need for a separate bank account in the ledger

Contra Entry: If the debit as well as credit aspect of transaction are recorded in cash book itself , it is called Contra Entry. 
It is passed only when Three Column Cash Book is maintained. 
Contra Entries are never posted in the ledger 


PETTY CASH BOOK   
Payments in cash of small amounts like traveling expenses, postage, carriage etc. are petty cash expenses. These petty cash expenses are recorded in the petty cash book. 
The petty cash book is maintained by separate cashier known as petty cashier.
The balance is petty Cash Book is an asset . 
Payments recorded in the Petty Cash Book are directly posted to the different nominal accounts

These online MCQ Mock tests and MCQ questions includes all main concepts of the chapter in CS foundation Financial Accounting and Auditing.

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