Cash Book In Accounting: Definition, Features, Format, Process, Faqs

A Cash Book in accounting forms a financial journal that comprises all cash receipts and disbursements. It includes all the withdrawals and bank deposits. This is one of the main areas where businesses record all cash-related transactions accurately.

All the entries are divided into cash receipts and payments, which are posted in some of the general ledgers. In most cases, larger organizations divide the Cash Book into two parts. All the cash payments and cash receipts journal help you to record cash receipts in business.

The primary goal of the Cash Book is to manage cash efficiently. You can determine the cash balances at any point in time. However, this can assist you in reaching your requirements with ease.

What Is Cash Book In Accounting?

A Cash Book is a financial journal that comprises cash receipts as well as disbursements. It includes bank deposits and withdrawals. Any is one of the main areas where business records all and any cash-related transactions.

All the entries are normally divided into cash payments as well as receipts. Additionally, this is posted in the company’s general ledger. In most cases, a Cash Book is a subsidiary of a general ledger. This is also a much faster way of communication.

Importance Of Cash Book in Accounting Process

There are certain important aspects of a Cash Book that you must be aware of while you maintain the Cash Book in your accounting system. Some of the key factors that you must know here from your counterpart are as follows:-

1. Centralized Record Of Cash Transaction

The Cash Book acts as a single record for all your cash outflows and inflows. It simplifies all the cash management. However, it reduces the need to maintain separate bank and cash ledgers. However, it forms an essential part of bookkeeping in accounts.

2. Real-Time Cash Position

Whenever you maintain the cash and bank balances then maintaining the cash and bank balances becomes easier. Thus it helps in maintaining an effective liquidity balance to maintain sufficient funds for maintaining daily operations.

3. Simplifies Reconciliation

The Cash Book assists in reconciling cash and bank balances that comprise bank statements. It helps to resolve and identify discrepancies promptly. Whenever you reconcile regularly then it reduces the risk of fraud and errors.

4. Facilitates Budgeting & Cash Flow System

With detailed records of Cash outflows and inflows, the business can easily analyze all the spending patterns. In most cases, it helps to prepare accurate budgets by ensuring funds are available for all future expenses.

5. Ensures The Higher Level Of Accuracy In Financial Reporting

The Cash Book in Accounting is generally a part of the double-entry accounting system as it ensures all the transactions are recorded in a balanced and accurate way. This improves the reliability of the financial statements.

6. Transparency & Accountability

Whenever you maintain a detailed and chronological record of financial transactions the Cash Book promotes financial transparency. Additionally, you need to maintain a proper balance between cash and bank transactions in the Cash Book.

Advantages Of Cash Book In Accounting

Maintaining the Cash Book in accounts offers you the opportunity to keep track of your financial records accurately. Now, some of its core benefits that you must know from your end are as follows:-

1. It Helps To Maintain The Accurate Records Of Cash & Bank Transaction

A Cash Book offers an organized and detailed record of all cash outflows and inflows ensuring that no transaction is missed. It acts as both a ledger and a journal thus reducing omission or duplication of entries.

2. Real-Time Monitoring & Cash Balances

The Cash Book shows current bank and cash balances at any point in time. This is important for effective liquidity management. It helps to ensure businesses that they have sufficient funds for performing daily operations.

3. Facilitates Budgeting & Cash Flow Management

Whenever you provide a clear picture of cash inflows and outflows the Cash Book helps in controlling and monitoring expenses. This helps in preparing budgets and maintaining healthy cash flow.

4. Easy Reconciliation With Bank Statements

The Cash Book helps make bank reconciliation easy. Thus it is easier to match all the records with the bank statements therefore, it reduces all the discrepancies like unauthorized transactions and errors.

5. Reduces Errors

All the transactions are systematically and daily recorded while minimizing the chances of omissions, misstatements, and errors. In most cases, the Cash Book follows a double entry system thus ensuring balanced debit as well as credit.

6. Saves Time And Effort

It acts as a combined journal and ledger thus it eliminates the need for preparing separate ledger accounts as well as cash transactions. Thus, it streamlines the accounting process and saves time. This is one of the crucial aspects of Cash Book in accounting.

7. Ensures Accountability & Transparency

Cash Book offers clear records of transactions offering financial transparency. It holds all employees accountable for all the cash handling and helps in regular reviews to detect all the anomalies.

Disadvantages Of Cash Book

Along with the advantages, there are several disadvantages of Cash Book. Some of the key disadvantages of Cash Book are as follows:-

1. Having Limited Scope

It only records all the cash as well as bank transactions and it excludes credit transactions. Thus it makes it insufficient for a complete financial overview. Cash Book in accounting forms an essential part of Cash Book transactions for a better overview.

2. Time-Consuming For Manual Entry

It comprises consistent and detailed updates as it can be time-intensive for the detailed business volume of transactions. You should ensure that you follow the correct solution that can assist you in meeting your needs. Additionally, the chances of errors increase in a manual entry.

3. Having Risk Of Errors

In most cases, Cash Book in accounting includes manual entries as it increases the risk of duplications, miscalculations, and omissions. This is also susceptible to fraud and intentional manipulation.

4. Difficulty In Detecting Fraud

Cash Book is not at all error-free. It cannot provide you with accurate information or data all the time. You cannot track all the accounts receivable and accounts payable that are critical for effective financial management.

5. Requires Regular Reconciliation

Frequent reconciliation with the presence of bank statements is essential to ensure a higher level of accuracy. Sometimes, it can be tedious and complicated to make the process of reconciliation more effective. Cash Book forms an essential part of bank reconciliation.

6. Cannot Handle Complex Transactions

Cash Books are designed to record all the basic transactions. These are designed to record all the basic cash and bank transactions. All the complex transactions like depreciation, accruals, and multiparty transactions fall outside its scope. This is one of the crucial aspects of Cash Book in accounting that you must know from your end.

7. Limited Analysis & Reporting

A Cash Book does not offer analytical insights like forecasting, Cash flow trends, or budgeting, and it limits the scope of forecasting and cash flow trends. Thus it limits the scope of decision making to a greater extent.

Standard Rules For Maintaining The Cash Book

There are certain Cash Book rules that you must maintain from your end while maintaining a Cash Book in accounts. Some of the key factors that you should be well aware of from your counterpart are as follows:-

1. Immediate Recording Of Monetary Transaction

All the monetary transactions should be recorded in the Cash Book whenever they occur. It is one of the crucial aspects of Cash Book rules for maintaining the accounts. However, you must follow this rule to record the transactions perfectly.

2. Cheque / Draft

All the cheques or drafts must be considered as Cash. The same thing must have the proper entry in the Cash Book on an immediate basis. The date of encashment or cheque should be noted in the Cash Book. This is one of the crucial principles of Cash Book in accounting.

3. Closed & Balanced Each Day

You must ensure that the Cash Book must be closed and balanced each day. In no situation, any officer should continue any transaction in his office In No case the officer should continue the process of the transaction. Without closing it is impossible to balance the Cash Book after a day’s transaction. DDO should write the amount of the closing balance both in Word and figures in the Cash Book each day.

4. DDO Must Verify All Entries

DDO( Drawing and Disbursing Officer) must verify and check all the entries in the Cash Book with the help of original documents. All the receipt books, bill register, counterfoil, cheque register, vouchers, and payment receipts and also proper totaling of Cash Book. DDO will comprise all the initials against each entry of the Cash Book being satisfied with its accuracy.

5. Daily Analysis Of Cash

The balance of the Cash Book must be analyzed daily at the bottom of the Cash Book or in any separate register. It will help DDO to understand easily how long the money will be kept undisbursed or not credited to the Government account.

6. Erasing & Overwriting The Entry

Overwriting or erasing of an entry once made in the Cash Book is strictly prohibited. In case, if any mistake is detected. It must be corrected by drawing the pen with an incorrect entry. Whenever you insert the correct option with a red one use red ink between the lines. DDO should initial each correction with the help of these dated initials.

7. Verify The Cash Balance

At the end of the month erasing or overwriting the entry once made in the Cash Book should be strictly prohibited. If any mistake is detected it must be corrected by drawing the pen using an incorrect entry. Additionally, you must use the red ink between the lines. DDO should initial every correction with the help of a dated initial.

8. Machine Page Number Of Cash Book

The machine page number must be used in the Cash Book. Before you make use of the Cash Book DDO must satisfy the page number. Issue the certificate to effect in the Cash Book on the front page.

9. Blank Receipt Book Must Be Kept In Safe Custody

All the blank receipt books must be kept in safe custody for the authorized person to sign the receipt. Receipt must be signed by the head office or any other officer who is authorized to sign the document and is subordinate to him. SR36 the officer must sign unless SR 41 is framed under the departmental regulation.

10. Temporary Advance Must Be Recorded

Any temporary when made out of the departmental cash must be recorded in the Cash Book. There are some columns present in the Cash Book for some purposes of some advances. Thus recording all the advances with your advances as well as adjustments. There are some advances there are better to open an advance register.

11. Offers Separate Double Column Cash Book

In an office where an account of a banking nature is in operation there separate double-column Cash Book can be maintained. The total of the transaction can be recorded at the bottom of the main Cash Book. PL account must be closed or terminated on the last working day of the financial year. If not then it can be otherwise stated by special order of the government.

12. Each Office Must Have Only One Cash Book

In each office, there shall be only one Cash Book. This is the fundamental best practice for maintaining the Cash Book. As this is one of the crucial aspects of having a Cash Book in accounting. Additionally, you should not make your choices on the incorrect end.

Types Of Cash Book

There are commonly four types of Cash Books that you should be well aware of. Some of its common types that you must know from your end are as follows:-

Single Column Cash Book

Features Of Single Column Cash Book

• It comprises only one column of cash transactions both on the debit as well as on the credit side.
• You can record all the cash transactions exclusively.

Usage

• It is suitable for all businesses that deal completely in cash and there is no scope for banking transactions.

Single Column Cash Book Format

The format of the single-column Cash Book comprises several points. Some of them are as follows:-

1. Date: The date column contains the date, month, and year of transaction.
2. Particulars: In most cases, this column contains the name of the account for which the cash has been paid or received.
3. Journal Folio: Most of the time this column keeps track of the journal page where posting of the amount has been made.
4. Amount: The amount column records the real amount of cash receipts on the debit side and cash payments are recorded on the credit side.

How To Prepare Single Column Cash Book

There are some simple methods that you need to go through while preparing the single-column Cash Book. Some of the core factors that you need to be well aware of in this regard are as follows:-

1. Set Up Of Cash Book Format

You must divide the page into two sides.

• On the left side of the page draw the receipt column(debit side).
• The right side of the page it comprises of the payments or (credit side).
• You need to add the following columns on both sides of the page.
• Record the date of the transaction.
• Mention the names as well as details of the complete transaction.
• Voucher No all the optional columns or the reference column or support for the transaction.
• You need to record all the cash amounts received or paid.

2. Enter The Opening Balance

• You need to write the opening cash balance on the debit side under the Amount Column as the Balance B/D.
• If there is no opening balance then you must skip the step.

3. Record The Cash Receipts

• For every cash inflow( Sales, Income, Capital Introduced).
• You must record the date of the transaction.
• Write the source of the receipts in the particulars column.
• You must enter the corresponding amount column on the debit side.

4. Record All The Cash Payments

• For every cash outflow purchases, expenses, and withdrawals matter a lot.
• You must record the date in the date column.
• In the particulars column write the reason for the payment.
• Enter the corresponding amount in the amount column of the website.

5. Total The Columns

• You must add up all the amounts on the debit and credit side.
• At the bottom of each column write the totals.

6. Calculate The Closing Balance

• You should subtract the credit side(payments) from the debit side( receipts).
• The difference in the closing cash balance that is written on the credit side of Balance C/d.

7. Bring Down The Closing Balance

In the next period Cash Book you need to carry forward the closing balance as the opening balance. You must write it on the balance B/d on the debit side.

Double Column Cash Book

Features of Double Column Cash Book

• It comprises two columns on each side, one for cash transactions and another for bank transactions.
• This tracks both the cash and bank account simultaneously.

Usage

• In most cases, it is ideal for all businesses that deal with cash and bank transactions.

Double Column Cash Book Format

The second important format of the Cash Book is the double-entry system. Now let’s get through the format and its terminologies to understand this format in a better way.

1. Date: This column comprises of month, year, and date of the transaction.
2. Particulars: In this column, it comprises the name of the account for which cash has been paid or received.
3. Cash: In most cases, this column keeps track of journal page numbers where all the posting of the entire amount has been made.
4. Journal Folio: This column records the correct amount on the cash receipts on the Dr side while the cash payment will be displayed on the credit side.
5. Bank: In most cases, this column will help you to record the amount received on the debit side while payments will be recorded on the credit side.

How To Prepare Double Column Cash Book

There are some simple steps you need to follow for preparing a double-column Cash Book. Some of the key methods that you need to maintain are as follows:-

1. Set Up The Cash Book Format

• First of all, you need to divide the page into two sides.
• Left side for receipts in debit side.
• On the right side, you must maintain the payments known as the credit side.
• You need to add the columns to both sides.
• Record the date of the transaction.
• Mention the name and details of the transaction in the particular section.
• Having the complete reference for supporting documents.
• You need to record the cash outflows and inflows.
• Record the withdrawals or bank deposits.

2. Enter The Opening Balance

• On the debit side, you must record the opening balances.
• The cash balance will be under the cash column as Balance B/d.
• Bank balance will be under the bank column under balance B/d.

3. Record The Cash Receipts

• For every cash inflow, you need to record the cash inflow.
• Record all the dates of transactions in the date column.
• Write all the sources of receipts in the particulars column.
• You need to enter the amount in the cash amount column on the debit side.

4. Record The Bank Deposits

• For every bank deposit, you need to write the details on the debit side under the bank account column.
• If all the cash is deposited in the bank then you need to record it as contra entry.

5. Record Payments

• For maintaining cash or bank payments.
• Input the transaction and date details on the credit side.
• Enter the bank and cash amount in respective columns.

Triple Column Cash Book

Features Of triple column Cash Book

• It comprises three columns on each side discount, bank, and cash.
• Records bank transactions, cash transactions, and discounts received/ allowed.

Usage

• This is best suited for businesses where discounts are common along with bank and cash dealings.

Triple Column Cash Book Format

The third column of the entry balance sheet is also very important. You must be well aware of it.

1. Date: The date of a particular transaction is written in this column. You need to write the name of the month with the exact date.
2. Particulars: In this column the name of the opposite account is written. Below there you need to write the complete narration of the transaction.
3. Voucher Number: The voucher number for every item is written in the form of payments and receipts. A voucher is required for each item of receipts and payments. Generally, all voucher contains a serial number, and the column is known as (Vno).
4. Ledger Folio: The page number of the ledger where all the concerned accounts have been written in this column. Ultimately, this will help you to locate all the accounts from the ledger. Here, the Journal folio is written as a reference, and a Cash Book Ledger folio is written.
5. Amount Columns: All of the above columns are single and double-column Cash Books instead of the amount column three different columns are prepared 1. Discount 2. Rank 3. Cash.
6. Discount Column:

In the discount column, you need to record the discount received placed on the credit side of the Cash Book and the discount allowed on the debit side of the Cash Book.

1. Cash Column: All the receipts and payments made by cash are recorded in this column.
2. Bank Column: Whenever you make the receipts and payments made by cheque recorded in this column.

How To Prepare Three Column Cash Book

You need to follow some simple steps to prepare a three-column Cash Book. Some of the key steps that you need to follow here are as follows:-

1. Understand The Structure Of The Triple Column Cash Book

First, you need to prepare three columns on the debit side. Some of the key steps that you should follow here are as follows:-

Three Columns In the Debit Side:-

• Record all the receipts in Cash.
• It records all deposits and receipts in the bank.
• They record any discounts that are given to customers.

Three Columns on the Credit Side:-

• You need to record all the cash payments.
• Record all payments made in the bank.
• You must record all the discounts that are received from suppliers.

2. Headings Of The Cash Book

Write The Triple Column Cash Book at the top. There are certain factors that you must consider while meeting your goals. Column headings must include the following things from your counterpart.

• Particulars
• Date
• Discount Allowed/ Received
• Ledger Folio
• Bank
• Cash

3. Record Transactions

Opening balance

• You must enter the bank’s cash balance and cash account on the debit side under respective columns.

Cash Receipts

• Record the cash received in the cash debit column.
• If you record the discount to the customer, you need to record it in the Discount allowed column.

Bank Receipts

• In the debit column of the bank, you need to record the amount you receive directly.
• You need to record the relevant discounts in the discount allowed column.

Cash Payments

• You must record the cash payments in the cash credit column.
• If you receive any discount from the supplier then the discount received

Bank Payments

• In this step, you need to record all the payments through the bank credit columns.
• You should include any discounts that you receive from the discount receive column.

Contra Entries

• When the cash is deposited or withdrawn from the bank then you must record it on both sides as contra entry. This is indicated with a C in the particulars column.

4. Post Transactions To The Ledger

You need to post each transaction from the Cash Book to the corresponding ledger account.

5. Balance The Cash Book

• At the end of the period, calculate the totals of the debit and credit columns for cash and bank.
• Cash column will always have a debit balance or zero (no credit balance, as cash cannot be negative).
• The bank column may show either a debit or credit balance depending on whether the account is overdrawn.

4. Petty Cash Book (Specialized Type)

Features Of Petty Cash Book

• It is maintained to record small and day-to-day businesses.
• This is typically operated using the impressed system, here fixed amount is given to the petty cashier.

Usage

• It helps to track minor expenses without cluttering the main Cash Book.

Petty Cash Book Format

The fourth and most important entry of Cash Book in Accounting is Petty Cash Book. Some of the key points that you must ensure here are as follows:-

1. Date: The column records the date of every transaction.
2. Particulars: In most cases, it describes the complete mode of all expenses.
3. Voucher Number: Most transactions are recorded with a unique voucher number with the complete verification process.
4. Amount: In most of the cases, this column records the amount spent on each transaction.
5. Balance: It highlights the running balance of the petty cash fund.

How To Make A Petty Cash Book

A petty Cash Book is good for managing small and everyday expenses in business. There are certain steps that you need to follow.

1. Select A Format

There are two types of formats for making the Petty Cash Book. So, let’s get through this format to have a clear insight into it.

• Simple Format: Records all the transactions without categorizing all the expenses.
• Analytical Format: For categorizing expenses, it has columns( Travel, Stationary, and expenses)

2. Prepare The Table

Create the table by following a table format.

• Date
• Particulars
• Voucher No
• LF
• Amount Received
• Postage
• Stationary
• Travel
• Refreshment
• Other expenses
• Total Payment

3. Begin With The Opening Balance

You need to record the opening balance of the petty cash with the amount received column. It is the initial amount given to the petty cashier to imprest them.

4. Record All The Petty Transactions

You must record all the petty transactions. Some of the key factors that you should take care of from your end are as follows:-

• Date: The date on which the transaction occurred.
• Particulars: You must share a brief description of the transaction.

• Voucher No: Try to show a reference to your supporting document such as a receipt.

• Expense Category: Ensure that you enter the amount under the relevant column.

• Total Payment: You should record the total amount paid for the transaction.

5. Total And Balance

At the end of the period (daily, weekly, or monthly):

• Total each expense category column.

• Calculate the total expenses by summing all the expense columns.
• Subtract the total expenses from the opening balance to determine the closing balance.
• Replenish the petty cash to restore the imprest amount, if needed.

6. Reconcile Petty Cash

• You should match the remaining cash with the closing balance that is present in the Petty Cash Book.
• Resolve and investigate the discrepancies.

Adjusted Cash Book Format

Under this method, all the adjusted Cash Books will be prepared and the adjusted balance will be used for preparing the bank reconciliation statement.

Remember one thing anything that is recorded in the adjusted Cash Book will not be recorded in the bank reconciliation statement.

Cash Book Format In Accounting

The Cash Book format in Accounting is divided into four categories. So, if you want to know about the Cash Book format then you must be aware of the types of Cash Books. Only then you can understand the format of the Cash Book.
Check out here for more details.

Difference Between Cash Book And Cash Account

There are several points of difference between a Cash Book and a Cash Account. Some of the key factors that you should be well aware of are as follows:-

Particulars	Cash Book	Cash Account
Purpose	To record all the cash transactions Cash Book is used.	To record the balance of cash on hand Cash Book is used.
Format	A Cash Book is typically a form of journal as all the entries are made chronologically.	In most cases, a cash account is typically a ledger account that comprises of running balance.
Scope	In most cases, a Cash Book includes all cash transactions that include, cash sales, cash purchases, and cash Payments. A cash account includes the balance of cash on hand.	A cash account only includes the balance of cash that you have on hand.
Detail	A Cash Book comprises more detailed information as it records all the cash transactions.	On the other hand, they record all the cash transactions while the complete cash account will have less detailed information as it records all the balances of cash in hand.
Use	In this case, the Cash Book comprises all the record keeping and the complete internal control process.	The Cash account is used for financial reporting and comprises tax compliance purposes.
Update	The Cash Book is updated regularly and daily.	The cash account is updated less frequently. During the end of the financial period it gets updated.
Auditing	A Cash Book forms a subject of internal audit.	A cash account is the subject of an external audit.
Reconciliation	The Cash Book is reconciled with the help of the Cash account.	No such reconciliation is there in the case of a cash account.

Cash Book vs Petty Cash Book

Most of the time people often get confused between the concepts of Cash Book and Petty Cash Book. Now, your concepts will become clear after going through this table of differences. So, let’s explore the difference between the two concepts one after the other.

Aspects	Cash Book	Petty Cash Book
Purpose	You must record all the bank and cash transactions.	You can record daily as well as small expenses.
Maintained By	It is maintained by a cashier or accountant.	The petty cashier maintains this account.
Value Of Transactions	Large transactions	Small/ Minor Transactions.
Imprest Systems	It is not applicable in Cash Book	This is often used.
Posting To Ledger	Direct Entry is possible here.	Summarized Totals are posted here.
Columns	Bank, cash, and Discounts( optional)	Expense-specific columns ( Postage, or stationary)

Day Book vs Cash Book

Most of the time, people often get confused between the concepts of Day book and Cash Book. So, let’s get over this confusion by going through these two concepts. Let’s get the details from it.

1. Daybook

A day book is one of the primary books of accounting where in chronological order all the business transaction is recorded. It will help you book of original entry for recording all cash and credit transactions.

Key Features Of Day Book

• Purpose: It is used to record all financial transactions daily.

• Types Of Day books:

> Sales Day Book: It records all the credit sales.

> Purchase Day Book: You can record all the credit purchases.

> Returns Day Book: It records all the goods returned by customers and goods returned by suppliers.

> General Journal: You can record all the transactions that are not captured by specialized day books.

• • Details Recorded: Description of the transaction, debit or credit amount, date, and reference to ledger accounts.

• Posting To Ledger:- All the entries in the day book are posted periodically to respective ledger accounts.

2. Cash Book

A Cash Book is one of the specialized journals that is used to record all cash and bank transactions. It acts as both a ledger and a journal. As it shows all the bank and cash transactions.

Key Features of Cash Book

• Purpose: To track all the bank and cash receipts and payments.

• Types Of Cash Books

> Single Column Cash Book: Here you can record all the cash transactions.

> Double Column Cash Book: You can record all the bank and cash transactions.

> Triple Column Cash Book: In this account, you can record all the bank, cash, and discount transactions.

• • Details Recorded:- Cash/bank amounts, particulars, date, reference to ledger amounts.

• Posting To Ledger: All the Cash Book entries are posted directly to ledger accounts.

Difference Between Cash Book And Passbook

There are some core points of differences between Cash Book and Passbook. Some of the key factors that you must be well aware of are as follows:-

Aspect	Cash Book	Passbook
Maintained By	Business	Bank
Perspective	It shows the business view of its bank/ cash balances	On the other hand, it shows banks view and business account balances.
Purpose	This is used for internal accounting purposes.	It is used for reconciling and verifying bank transactions.
Format	It includes double, single, and triple-column formats.	This includes all the details like balance, withdrawals, and deposits.
Debit Or Credit	In the debit side of the Cash Book cash or bank received is recorded. While on the credit side, cash or bank-paid is recorded.	The amount Withdrawn is shown on the debit side of the passbook and the amount deposited is also shown on the credit side of the passbook.
Balance Indication	A debit balance indicates bank/ cash availability	On the other hand, credit balance indicates funds available to the account holder.
Sources Of Information	Internal transaction records are the main sources of information	Transactions recorded in the banks are the main sources of information.

How To Prepare Cash Book In Excel

You just need to follow some simple steps to prepare the Cash Book in Excel. So, you must explore the process to understand it clearly.

1. Open Excel And Create A New Workbook

• You must open Microsoft Excel or any equivalent spreadsheet software.
• After that, you need to create a workbook by selecting a file.

2. Set Up The Cash Book Structure

1. You just need to label the columns in the second steps and name them accordingly. So, let’s get through the process.

• In the first column enter the date of transaction.
• The particulars must be in the second column of the Cash Book to enter the description of the transaction.
• The voucher Number is the third column that is used for internal and external referencing.
• Ledger Folio is used for the referencing of ledger accounts. It is optional.
• The amount receipt comes in column five.
• The amount paid will come in column six.
• The balance of the running Total will occur in Column seven.

1. You can easily format the headers by bolding them or adding colors for your clarity.

3. Enter Sample Transaction

In the rows below the headers, input your transactions as follows:

• Date: Enter the transaction date (e.g., 01/01/2025).
• Particulars: Describe the transaction (e.g., “Sales,” “Rent Payment”).
• Voucher Number: Enter any related voucher or receipt number.
• Receipt/Payment: Enter the respective amount under “Receipt” or “Payment.”
• Balance: Use a formula to calculate the running total.

4. Add Formulas

Running Total (Balance):

• In the first row of the “Balance” column (G2), enter the formula:
  =E2-F2
• For the subsequent rows, enter:
  =G2+E3-F3
  Drag this formula down the “Balance” column to automatically update the running balance.

Auto-Formatting for Currency:

• Highlight the “Receipt,” “Payment,” and “Balance” columns.
• Right-click → Format Cells → Currency or Accounting → Click OK.

5. Add Tools

At the bottom of the receipt and payment columns, you have to add the formulas. Additionally, you need to follow the sequence of receipts and
payment columns to meet your goals with ease.

6. Provide Formatting For Clarity

• Gridlines

Highlight the table → Right-click → Format Cells → Border → Add a border style.

• Conditional Formatting

You can use conditional formatting to highlight all the negative balances and overdue payments for better utilization.

7. Save And Update Regularly

• You must save your files using some meaningful names.
• To maintain accurate records you must update the Cash Book regularly.

How To Prepare Cash Book In Google Sheets

There are numerous ways you can adopt to prepare Cash Book in Google Sheets. Some of the key methods that you should know here are as follows:-

1. Open Google Sheets And Create New Sheets

• You must go to Google Sheets and log in to your Google Accounts.
• Click on the + Blank button to create a new sheet.

2. SetUp The Cash Book Layout

You must label the columns one after the other as per your requirements.

• Mention the date of the transaction.
• Show the description of the transaction in the particulars column.
• You must show the voucher number for reference if it is applicable.
• Ledger folio is optional for your ledger.
• Create the receipt column for recording the amount received.
• You must show the amount paid for the meeting transaction.
• Balance the running total of the amount received and the amount paid.

Format the headers by clicking on bold(Ctrl +B) and you can add the background color for clarity.

3. Enter The Sample Transactions

You should input the transaction below the header. So, let’s explore the process to have a clear insight into it.

• Date: Enter the transaction date (e.g., 2025-01-10).
• Particulars: Add details about the transaction (e.g., “Sales,” “Rent Payment”).
• Voucher Number: Enter any associated voucher or receipt number.
• Receipt: Input the amount received.
• Payment: Input the amount paid.
• Balance: Leave this column empty for now (you’ll add a formula later).

4. Add Formulas

Here you need to follow certain formulas that can help you in meeting your goals with ease. Some crucial steps you need to follow. So let’s explore those steps from your end.

• Calculate all the running total balance.
• Add totals for receipts and payments.

5. Formatting

1. Currency Format

• Highlight the “Receipt,” “Payment,” and “Balance” columns.
• Go to Format → Number → Currency.

1. Grid Lines

• Google Sheets automatically has gridlines, but you can highlight your table, right-click, and select Borders to make the gridlines bold.

1. Conditional Formatting

• If you want to highlight the negative balances Go to format- Conditional Formatting.
• Set the “ Range” to balance the column.
• Apply the rule: That is less than 0——> Choose a color ( eg- Red)

6. Save & Share

• In most of the cases, Google Sheets saves the documents automatically. On the other hand, you can rename the file on the top.
• If you want to collaborate then click on share while granting access to others.

7. Update Regularly

Add new transactions as they occur to maintain some accurate records. This is also one of the crucial aspects of Cash Book in accounting.

How Does Cash Book Generator Work?

There are some standard methods using which Cash Book Generator works. Some of the key ways that you should be well aware of are as follows:-

1. Template Setup

• With the pre-set column create the Google Sheet template. It must include particulars, dates, voucher numbers, receipts, payments, and balances.
• You must add the running tools by adding the formulas in the balance columns and you need to add the total for receipts and payments.

2. Automation With Google App Script

• You should use the Google Apps script in order to automate the insertion of new rows for transactions.
• Example Script to add a new row.

• Run and save the scripts to add transactions programmatically.

3. Share Template

You must save your template for reuse or to share it with other users.

FAQ( Frequently Asked Questions)

1. What Are Cash Book Practical Questions Students Often Ask?

There are certain common questions students often ask while learning Cash Book in Accounting. Some of these common questions are as follows:-

• What is the purpose of a Cash Book in accounting?
• What are the different types of Cash Books?
• How does a Cash Book differ from ledger accounts?
• Is a Cash Book both a journal and a ledger? Why?
• What is the difference between receipts and payments in the Cash Book?

2. What Are Single-Column Cash Book Questions With Solutions?

Question 1: Basic Cash Book Preparation

Transactions:

1. January 1: Started business with cash ₹50,000.
2. January 3: Purchased goods for cash ₹10,000.
3. January 5: Sold goods for cash ₹15,000.
4. January 10: Paid rent ₹5,000.
5. January 15: Bought stationery for ₹1,000.
6. January 20: Received cash from a customer ₹8,000.

Prepare a single-column Cash Book and balance it.

Solution:

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Capital	50,000		50,000
January 3	By Purchases		10,000	40,000
January 5	To Sales	15,000		55,000
January 10	By Rent		5,000	50,000
January 15	By Stationery		1,000	49,000
January 20	To Customer	8,000		57,000

Closing Balance: ₹57,000

Question 2: Identify Missing Entries

Problem: The following Cash Book is incomplete. Fill in the missing amounts (denoted as “X”) and balance the Cash Book.

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Capital	30,000		30,000
January 4	By Office Rent		5,000	X
January 8	To Sales	10,000		X
January 12	By Equipment Purchase		7,000	X

Solution:

1. January 1: Balance starts at ₹30,000.
2. January 4: Payment of ₹5,000 → Balance = ₹30,000 – ₹5,000 = ₹25,000.
3. January 8: Receipt of ₹10,000 → Balance = ₹25,000 + ₹10,000 = ₹35,000.
4. January 12: Payment of ₹7,000 → Balance = ₹35,000 – ₹7,000 = ₹28,000.

Completed Cash Book:

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Capital	30,000		30,000
January 4	By Office Rent		5,000	25,000
January 8	To Sales	10,000		35,000
January 12	By Equipment Purchase		7,000	28,000

Closing Balance: ₹28,000

Question 3: Adjusted Cash Book

Problem: During January, the following transactions occurred. However, some corrections and adjustments need to be made:

1. January 1: Opening cash balance ₹20,000.
2. January 3: Paid salaries ₹8,000.
3. January 10: Received ₹5,000 from a debtor.
4. January 15: Paid ₹2,000 for repairs (recorded incorrectly as ₹200).

Required: Prepare the adjusted single-column Cash Book.

Solution:

1. Correct the repairs transaction:
   • Subtract the correct payment amount (₹2,000) instead of the incorrect one (₹200). The adjustment = ₹1,800 additional payment.

Adjusted Cash Book:

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Opening Balance	20,000		20,000
January 3	By Salaries		8,000	12,000
January 10	To Debtor	5,000		17,000
January 15	By Repairs (Corrected)		2,000	15,000

Closing Balance: ₹15,000

Question 4: Find Errors in the Cash Book

Problem: The following Cash Book has errors. Identify and correct them:

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Opening Balance	10,000		10,000
January 5	By Purchases		3,000	9,000
January 8	To Sales	5,000		14,000
January 10	By Rent		2,000	13,000

Errors:

1. January 5: Balance should be ₹10,000 – ₹3,000 = ₹7,000, not ₹9,000.
2. January 10: Balance should be ₹14,000 – ₹2,000 = ₹12,000, not ₹13,000.

Corrected Cash Book:

Date	Particulars	Receipt (₹)	Payment (₹)	Balance (₹)
January 1	To Opening Balance	10,000		10,000
January 5	By Purchases		3,000	7,000
January 8	To Sales	5,000		12,000
January 10	By Rent		2,000	10,000

3. What Are The Double Column Cash Book Questions With Solutions?

Question 1: Basic Double-Column Cash Book Preparation

Transactions:

1. January 1: Opening cash balance ₹25,000 and bank balance ₹15,000.
2. January 3: Deposited ₹5,000 into the bank.
3. January 7: Paid office rent ₹8,000 by cheque.
4. January 10: Received ₹12,000 in cash from sales.
5. January 12: Withdrawn ₹3,000 from the bank for office use.

Prepare the double-column Cash Book and balance it.

Solution:

Date	Particulars	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
January 1	To Balance b/d	25,000	15,000		25,000	15,000
January 3	By Bank (Contra)	5,000			20,000	20,000
January 7	By Office Rent		8,000		20,000	12,000
January 10	To Sales	12,000			32,000	12,000
January 12	To Cash (Contra)	3,000			35,000	9,000

Closing Balances:

• Cash Balance: ₹35,000
• Bank Balance: ₹9,000

Question 2: Identify Missing Values

Problem: Fill in the missing values (denoted as “X”) in the double-column Cash Book:

Date	Particulars	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
February 1	To Balance b/d	40,000	25,000		40,000	25,000
February 5	By Salaries	15,000			X	25,000
February 8	To Sales	10,000			X	25,000
February 12	By Equipment Purchase		8,000		X	X

Solution:

1. February 5: Cash payment of ₹15,000 for salaries reduces cash balance:
   Cash = ₹40,000 – ₹15,000 = ₹25,000.
2. February 8: Sales receipt of ₹10,000 increases cash balance:
   Cash = ₹25,000 + ₹10,000 = ₹35,000.
3. February 12: Bank payment of ₹8,000 for equipment reduces bank balance:
   Bank = ₹25,000 – ₹8,000 = ₹17,000.

Completed Cash Book:

Date	Particulars	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
February 1	To Balance b/d	40,000	25,000		40,000	25,000
February 5	By Salaries	15,000			25,000	25,000
February 8	To Sales	10,000			35,000	25,000
February 12	By Equipment Purchase		8,000		35,000	17,000

Closing Balances:

• Cash Balance: ₹35,000
• Bank Balance: ₹17,000

Question 3: Contra Entries

Problem: Record the following transactions, including contra entries:

1. March 1: Opening cash balance ₹30,000 and bank balance ₹20,000.
2. March 2: Deposited ₹15,000 into the bank.
3. March 5: Withdrawn ₹10,000 from the bank for office use.
4. March 8: Paid electricity bill ₹3,000 by cheque.
5. March 10: Received ₹18,000 in cash from a debtor.

Solution:

Date	Particulars	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
March 1	To Balance b/d	30,000	20,000		30,000	20,000
March 2	By Bank (Contra)	15,000			15,000	35,000
March 5	To Cash (Contra)	10,000			25,000	25,000
March 8	By Electricity Bill		3,000		25,000	22,000
March 10	To Debtor	18,000			43,000	22,000

Closing Balances:

• Cash Balance: ₹43,000
• Bank Balance: ₹22,000

Question 4: Practical Scenario

Problem: Prepare a double-column Cash Book for the following transactions:

1. April 1: Opening cash balance ₹50,000 and bank balance ₹30,000.
2. April 4: Purchased goods for ₹15,000 by cheque.
3. April 7: Deposited ₹20,000 into the bank.
4. April 10: Paid salaries ₹8,000 in cash.
5. April 15: Received ₹25,000 in cash from sales.

Solution:

Date	Particulars	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
April 1	To Balance b/d	50,000	30,000		50,000	30,000
April 4	By Purchases		15,000		50,000	15,000
April 7	By Bank (Contra)	20,000			30,000	35,000
April 10	By Salaries	8,000			22,000	35,000
April 15	To Sales	25,000			47,000	35,000

Closing Balances:

• Cash Balance: ₹47,000
• Bank Balance: ₹35,000

4. What Are Three-Column Cash Book Questions With Solutions?

The three-column Cash Book includes three columns: cash, bank, and discount. It records cash transactions, bank transactions, and discounts allowed or received.

Question 1: Basic Three-Column Cash Book

Transactions:

1. June 1: Opening balances: Cash ₹40,000, Bank ₹25,000.
2. June 2: Paid office rent ₹10,000 in cash.
3. June 3: Received ₹20,000 from a debtor, allowed a discount of ₹2,000.
4. June 4: Deposited ₹15,000 into the bank.
5. June 6: Purchased office supplies for ₹8,000 by cheque, received a ₹500 discount.
6. June 8: Paid electricity bill ₹5,000 by cheque.
7. June 10: Withdrew ₹3,000 from the bank for office use.

Prepare a three-column Cash Book.

Solution:

Date	Particulars	Discount (₹)	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
June 1	To Balance b/d		40,000	25,000		40,000	25,000
June 2	By Office Rent		10,000			30,000	25,000
June 3	To Debtor	2,000	20,000			50,000	25,000
June 4	By Bank (Contra)		15,000			35,000	40,000
June 6	By Office Supplies	500		8,000		35,000	32,000
June 8	By Electricity Bill			5,000		35,000	27,000
June 10	To Cash (Contra)		3,000			38,000	24,000

Closing Balances:

• Cash Balance: ₹38,000
• Bank Balance: ₹24,000

Question 2: Identify Missing Entries

Problem: Fill in the missing entries (denoted as “X”) in the three-column Cash Book:

Date	Particulars	Discount (₹)	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
July 1	To Balance b/d		30,000	20,000		30,000	20,000
July 3	To Sales	X	15,000			X	20,000
July 5	By Bank (Contra)		10,000			X	X
July 7	By Furniture Purchase	1,000		12,000		X	X

Solution:

1. July 3: Sales receipt:
   • Discount = ₹500.
   • Cash = ₹30,000 + ₹15,000 = ₹45,000.
2. July 5: Deposited ₹10,000 into the bank:
   • Cash = ₹45,000 – ₹10,000 = ₹35,000.
   • Bank = ₹20,000 + ₹10,000 = ₹30,000.
3. July 7: Furniture purchase by cheque:
   • Bank = ₹30,000 – ₹12,000 = ₹18,000.

Completed Cash Book:

Date	Particulars	Discount (₹)	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
July 1	To Balance b/d		30,000	20,000		30,000	20,000
July 3	To Sales	500	15,000			45,000	20,000
July 5	By Bank (Contra)		10,000			35,000	30,000
July 7	By Furniture Purchase	1,000		12,000		35,000	18,000

Question 3: Contra and Discount Transactions

Problem: Record the following transactions in a three-column Cash Book:

1. August 1: Opening balances: Cash ₹50,000, Bank ₹35,000.
2. August 2: Deposited ₹10,000 into the bank.
3. August 4: Paid ₹5,000 to a creditor, received a ₹500 discount.
4. August 6: Received ₹12,000 from a customer, allowed a ₹1,000 discount.
5. August 8: Withdrew ₹8,000 from the bank for personal use.

Solution:

Date	Particulars	Discount (₹)	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
August 1	To Balance b/d		50,000	35,000		50,000	35,000
August 2	By Bank (Contra)		10,000			40,000	45,000
August 4	By Creditor	500	5,000			35,000	45,000
August 6	To Customer	1,000	12,000			47,000	45,000
August 8	By Drawings			8,000		47,000	37,000

Closing Balances:

• Cash Balance: ₹47,000
• Bank Balance: ₹37,000

Question 4: Real-Life Scenario

Problem: Prepare a three-column Cash Book for the following:

1. September 1: Opening balances: Cash ₹25,000, Bank ₹40,000.
2. September 3: Paid wages ₹7,000 in cash.
3. September 5: Received ₹18,000 from a debtor, allowed a ₹2,000 discount.
4. September 7: Deposited ₹10,000 into the bank.
5. September 10: Paid office supplies ₹15,000 by cheque, received a ₹1,000 discount.

Solution:

Date	Particulars	Discount (₹)	Cash (₹)	Bank (₹)	L.F.	Cash Balance (₹)	Bank Balance (₹)
September 1	To Balance b/d		25,000	40,000		25,000	40,000
September 3	By Wages		7,000			18,000	40,000
September 5	To Debtor	2,000	18,000			36,000	40,000
September 7	By Bank (Contra)		10,000			26,000	50,000
September 10	By Office Supplies	1,000		15,000		26,000	35,000

Closing Balances:

• Cash Balance: ₹26,000
• Bank Balance: ₹35,000

Final Take Away

Hence, if you have any more queries left for the Cash Book in accounting then you must refer to those points in our comment box. This will help us to track your response properly and we can deliver our timely feedback to you.

Cash Book forms an important part of accounting. You cannot afford to ignore this chapter while studying accounting and finance subjects. So keep asking us questions to as we will be glad to reply to your queries from time to time.