Yes, the cash book is both a journal and a ledger. To make the concept simpler, I would like to familiarize you with the meaning of journals and ledgers, which shall help in determining the reasons for a cashbook to be both a journal as well as a ledger. Journal A journal is a descriptive financialRead more
Yes, the cash book is both a journal and a ledger.
To make the concept simpler, I would like to familiarize you with the meaning of journals and ledgers, which shall help in determining the reasons for a cashbook to be both a journal as well as a ledger.
Journal
A journal is a descriptive financial record of a business that is used for future reconciling as well as a transfer to other books of accounts such as the ledger. It is a book of original entry.
Cashbook is considered to be a journal because all the cash/bank receipts and payments are recorded in this book in a descriptive form similar to journal posting.
Ledger
In simple words, a ledger refers to recording individual accounts in a summarized form that are posted from a journal. It is a book of principal entry.
A cashbook is considered to be a ledger because all the cash transactions that are made during a particular financial period are recorded in this book in a chronological order. When a cashbook is prepared there is no need for a cash a/c as the book serves the same purpose and therefore can be used as a substitute.
Format of a Cashbook
Cashbook
| Date | Particulars | V.No. | L.F. | Cash | Date | Particulars | V.No. | L.F. | Cash |
| To Capital a/c | By Advertisement a/c | ||||||||
| To Sales a/c | By Purchases a/c | ||||||||
| To Mr. C’s a/c | By Stationery a/c | ||||||||
| To Bank a/c | By Office expenses a/c | ||||||||
| By Rent a/c | |||||||||
| By Salary a/c | |||||||||
| By balance c/d | |||||||||
Note: As we can see the format and posting of a cashbook are similar to that of journal and ledger accounts.
Hope this helps.
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Examples of Bank Reconciliation Statement Illustration 1, From the following particulars prepare a Bank Reconciliation Statement on 31st January XXXX Debit Balance as per Cash Book 48,000. Cheque of 37,000 was deposited and collected by the bank but not recorded in Cash Book. Purchased Furniture andRead more
Examples of Bank Reconciliation Statement
Illustration 1,
From the following particulars prepare a Bank Reconciliation Statement on 31st January XXXX
Solution:
Illustration 2,
From the following particulars prepare a Bank Reconciliation Statement on 31st October XXXX
Solution:
Examples of Cash Book
Illustration 1,
Solution:
Illustration 2,
Prepare a 2 column cash book
Solution:
Aastha Mehta.
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