What is cash book? Features of cash book!

Cash book

In any business, perhaps, the largest number of transactions of one nature must related to cash and bank. It is so because every transaction must, ultimately, result in a cash transaction. Now, if every cash transaction is to be recorded in journal, it will involve an enormous amount of labour in debiting or crediting cash or bank account in the ledger for each transaction. Therefore it is convenient to have a separate book, to record such transaction. Maintaining of cash book removes the necessity of having cash and bank account in the ledger. This book enable us to know the balance of cash in hand and at bank at any point of time. It is also a book of original entry because cash and bank transaction are not recorded in any other Subsidiary book.

Cash book may be described as other primary book meant for recording all cash  (including cash) transaction date wise, usually, accompanied by brief narration. It serves the purpose of ledger also. The need for a separate cash book is important become of the following reasons:-

• Number of transactions, in every business, relating to cash is quite large.
• Cash as an asset is prone to fraud, it is very tempting for any one to embezzled cash.
• Every business required upto date information regarding cash daily. So cash book is, invariably, balanced daily 

Features of Cash Book

These are the following important features of Cash Book:-

1. Only cash/ bank transaction are recorded in cash book.
2. It performed the role of both journal and the ledger.
3. Receipts are recorded on the debit side and the payments on the credit side.
4. It records only one aspect of the transaction i.e. cash and bank; double entry is completed by means of posting in the ledger to the respective account.
5. Transaction are recorded in chronological order.
6. Cash columns must have debit balance (if any) whereas bank column may have debit or credit balance depending upon whether bank balance is positive or overdraft.
7. Non cash aspect of the transaction is posted in the ledger; cash aspect required no positive because  cash account is in the cash book itself.
8. Format of cash book is just like ledger i.e. having two sides, left hand (debit)  side and right hand (credit side).
9. Unlike any other account or book, cash book is balanced daily.
10. Cash book (cash column) must show debit balance always. It can have credit, balance because no one can pay more than what one possesses.