Among the entire subsidiary books cash book is one of the important book. In this book, we record particulars of receipts and payment of money. The main objective of cash book, is to know the balance of cash at any given time. The person who maintains this books is knowns as cashier. It records only one aspects of transaction i.e. cash. The number of cash transaction are more in the business, so the cash book should be prepared and maintained with utmost care.
Business transaction are mainly of two kinds
1. Cash transaction.
2. Credit transaction.
The credit transactions of the business are recorded in the related subsidiary books. All cash transactions should be recorded in a separate book known as cashbook.
Cash transactions are of two types
1. Cash receipts
2. Cash payment.
Cash receipts should be recorded on debit side and cash payments the credit side. The difference between total and credit total reveals the balance of cash.
Generally cash book shows debit balance. Business organisations can not pay more than what they receive. In other words cash receipts are more than cash payments or both may be equal.
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