Cash Book

This record cash and bank transaction of money coming in and out of the business.  It also records the discounts (but is NOT double entry for the discounts).  The other part of the double entry goes in the General Ledger, Sales Ledger or Purchase Ledger.

A blank cash book is shown below

CASH BANK IN                                        CASH/BANK OUT

 

Method

1. Put cash cheques, DD, SO etc.  received in on the debit side.  For example Joe Bloggs pays us £190 by cheque in full settlement of his £200 bill.  Debit the bank £190 and debit the discount allowed £10   
2. Put cash cheques, DD, SO etc. paid out on the credit side.  For example we pay Harry Plummer £240 by cheque in full settlement of our £260 amount owing to him.  Credit the  bank £240 and credit the discount allowed £20
3. Balance off the cash and bank separate from each other
4. Total the discounts (do not balance off though!!)

A completed cash book is shown below