CHAP TER IO

ecial Purpose Books I-Cash Book

LEARNING OBJECTIVES
This Chapter would enable you to understand:
□ Meaning of Subsidiary Books of Accounting
□ Classification of Subsidiary Books or Sub-division of Journal
□ Advantages of Subsidiary Books
O Meaning and Features of Cash Book:
D Kinds or Types of Cash Book
► Simple Cash Book or Single Column Cash Book
► Cash Book with Cash and Bank Columns or Two-column Cash Book or Double Column Cash Book
O Balancing and Posting of Cash Book
0 Petty Cash Book

Business transacti ons are numerou s and it becomes difficult to record all the
transac~ions in one book of primary entry, i.e., Journal Book. For example, in a
business, many transactio ns may relate to receipts and payments of cash, sale of
goods and their purchase . It is convenie nt to maintain a separate book for each type
of transacti ons-one to record cash transactio ns, another to record credit purchase of
goods and yet another to record credit sale of goods. Book of this type is called a book
of original entry or primary entry- , it is a special form of Journal, a sub-division
of it. Journal entry is not passed for the transacti ons recorded in such books. They are
directly posted in the ledger accounts.
These books of original or primary entry are also called Special Purpose Books or
Special Journals or S~bsidia ry Books.

The Journal, for convenience, is divided into following Subsidiar y Books:

1. Cash Book: To record receipts and payments of cash, including receipts into and
payments from the bank.
2. Purchas es Book: To record credit purchase s of goods.
3. Sales Book: To record the credit sales of goods.
4. Purchases Return Book: To record the return of goods previously purchased on credit.
t0
5. Sales Return Book: To record the return of credit sales made by cuS mers.
6), Journal Proper: To record the transacti•ons wh'1ch cannot be r ecorded in any of

the above books.

 10
Actvantagea of Subsidiary eoou
b 1d1 n book ha folloW1ng advantag d Book
u u f e Journal Sub • aar)'
n \\ or Smee m place o on mber of per on
untmg "ork can be d1\: ided among n nu k i handled by a part1
"fl • When the same wor . · H, hecom m
SJ l,sati n and E,,1cr-e11c,. s expertise in it. e
' r!', n for n con:,1dernblc tune, he a~quir~ . r"ty becomes more efficient.
p 1'} ~ accounting a< u, I <l k
ff1c1ent m hnndhng at HI . es cr1n be u n erta c
ting process r
S of Time: Vnriou:s accoun fl ks leading to completing th
) , f the u--e of number o JOO ,
s11nultoncou-.l~ because o -
,, k omcl~. k . ~ maintained for each type ,,
01
. s· e ~eparate boo l:,
l) A a,labr/it, of Jnformatwn: me :, . ~ available at one place.
. . t . . relating to each type 1:,
tian:-nct10ns. m oimatwn · t atch l<)cating th(; err,,
. the Trial Balance does no m ,
(t) ,Fac11rt_, in Checlung: In case, . . t books. Since the numher'
. T d b , the existence of separ a e
or errors is fac1 itate } . . B k compared to only on':! .J<Jurnal rt
trnn::-nction::i is less in each Subs1chary oo as
... ca::iy to locate the errors. . to a part1cula
.
1 · · rticular Job
(t 1) Responsibility: Division of work results m ass1gn1ng a p~ . . .
p,•r,on. If an error is committed in recording. respons1b1hty can be easily fixed.
In tin, Chapter we shall discuss Cash Book while other Subsidiary Book- shall he

~----~--~-~-~- -~~~
di:scU:,:")cd in the next Chapter.

Ca::-h Book is a book of primary entry in which cash and bank transactions are recorded
ma chronological order. i.e., in the order they are entered. Receipts are recorded on
the debit side of Cash Book while payments are recorded on the credit side. Ca,h
tran!',actions are recorded in the cash column and bank transactions are recorded in
the bank column. It is balanced by deducting total payments from total receipt;; to
know cash in hand and balance at bank.

Features of Cash Book

l. Only cash and bank transactions are recorded in the Cash Book .
.!.. Ca h receipt.; and cheques deposited are recorded on the debit side while cash an<l
cheque payments are recorded on the credit side.
3. 1t record~ only one aspect of the transaction , i ..
e , cas·h .
4. Cash
. . and bank transactions are recor<le<l in the Cas·h Boo k 1n · l or <lcr
· a ch rono1og1ca 1

le., in ordet they nre entered.

5 It performs the function of both ,Journal and the Lecl ger a t th e same tune.
·
 and • Pri I So ok

II

sh Books
Kinds oc Types of Ca
C1, hu 111 ... , ·tt cm , on h
C , Book: F I (J lf ll l' )
~ (C ,.
nu tr .: ·•,.1,:ti m~
cf or Discount
d. ana w",._"'e .'lf...1n t"f D $-.--Ou lt Reee,w
.s:.:- ... "'! :\!:.:- \e
1rtied through Jc um
ti Propor.
H
s c S".:'"''.JU 0
1
cneq"'e' '1 e re.:x.
· .t I't ·II.' C a,• / B w
k
· 1~(1 m ,u• n t ,,m
,- .~tmw s
. ... . Bt'\{_"Ik-. nr:11s $-.1n1t:
,1.

• n t t h e m ai n Cas."'
h B oo k
pl e C ash B oo k or Single Column Cas t lw lc•ft-hn ntl
(1} Si m
on e C' ('lm nn t'l l l",h.'h stdl'. t )n
~ e an ac-cotmr. w ith p:1~ nh .'n t~ ,H 't' n•1..
·onh•d.
.::: p e C _.::'h &- ,:k !, ..."~ d on rh e rig hr-h :1 1H i st dt '
·e re co rd ed nn
·e re.'€::-'s --: ~~ 'l a~ Cr.

V. Nv. L F.
. N.:- - .
5 I d e
Payments
A e c e p ' s
s d e

In dlt: column for:

io n is w Ti tte n. s be en l'l'l't:"in,ct or
µnict i~
Da:e: D at e of rr an sa ct de r w hi d1 ca $h h,1
th e 3.:-count un ith tht:> O pf •n in g Hnl.1
11<:t' t)f
Particula ...~: X am e or ls h Bo ok st ar ts w
g bu si ne ss . C bu si nt 'S S "i ll no t hn
n'
w rir re n. In an ex is tin B al an ce b a ...\. ne w
ce ip ts si de as T o
ca.sh w ri ne n on th e re
an op en in g ba la nc e. an sa ct io n is c,dh_,d ,1
Y ou ch er .
en t su pp or tin g a tr
o. (1: 1Yo.): Th e do cu m nt \'o ud w r.
1 1 \o uc he r :Y
er s: tJ) Re ce ip t \·o uc he r ~1nd (2) Pn yn w
ca sh Youch lu m n.
There ar e rn-o ty pe s of al nu m be r w hi ch is w ri tt en in th is co
r ha s a se ri l'l'. w ht 'l' P
Genera1ly. a \·o uc he m n fo r 'L .F .'. pa ge nu m be r oi tl w Ledg
1 th e co lu
Ledger Fol;o 'I..F. : In
th E am ou nt is po
st ed . is w ri tte n. ou nt s pa id
ar e w ri tt en on th e D eb it si dl ' an d am
i Am ou nt : Th e
am ou nt s receiYed
di t si de .
ar e w ri tte n on th e C re pp ro ac h) an d nn ~ \s se t . . \c eo un t
ad iti on al A
al Account (U nd er Tr co rd in g ca sh tr an sn
rt io ns in tlw
Cash Account is a Re at th e tim e of re
<Under Modern Appro
ach). The1efor e.
d C redi t ll' ha t go es ou t "or "Increases
mes in an
wed is "Debii what co sh is r0ceiYed from
a
Ca~h Book th e rule follo ited. ·· Fo r ex am pl e. ca
m assets are debited
and decrta.se.;; are cred C as h C ol um n in th e re ce ip ts (d eb it)
re co rd ed in
cu~tomer. Ca.:,hh is de bi te d. i.e.. ca sh is
de of th e C as Book.
Balanclng of Single Column C11h Book 11 . .
Cash Book is bnlanct1d likll II n ncmu nt.. 'l'hn totn I of rncl!i ptH .""' m n th IH lngge~ than or
equnl to tho tot,11! of p11ymontH "olumn. 'l'hn cliffornn,w iH wr1tton on u crn,ht aide 81
II
'By Bn lnnco dd'. 'l'h11 t.otn IH II r,, thm1 "'' t,or<Jd in tlw two ml mn H oppo~• ti, to one anQthe,
nnd llwn on tho tlubit, Hi<lo, t.11" l111l1111c•• iH wriU.,m UH "l'o Bn]HIIC" hid tu Hh,,w the caKh
hnhulco in hnnd in tho ll<\l-(i1111ing of UH• no,d, pm·iod .
Simple Cash Jlook ,,r Sinl(l<' C"lmnn ()a11h IJtJ()k .,<;,,me Ob11ervatlon11
I. Wlwn CnHh Book iH 11111int,11itrnd, CuHh Account iHnot, oponod in tho Ludger,
2. CnHh l\l)ok iH lrnluncod likc 1 uI1y oUwr uccounl.
a. lt. dom; nol rocord (ct) nc>n-cHHh t,rum,uwUonf-l, (h) chcqueH r~ceiv,Jd or given and
(c) cnHh discount 1--dlowod s-wd roccivod.
'1. Whon nn ontry is roeordocl in Himple CaHh Book, corr<JHfJOnding entry ia rccordtd
in t.lw Loclgor. l•'or oxumplo, if' l{nm puyH { G,000, t,he ruc0ipt for <l8bit) entry is
ptH-1sod in t,ho Cush Book nnd H,nrn'H Account iH cr,!ditecl in the Ledger.
5. Cash 13ook will not /uwe a credit l,(),lo,n,cc~, i.c!., Cr1Hh in Hand, becaUM; car,h paid
olnnol oxcood Cash in I lund .
Let, us tuko u few trnnsacLiorn; nncl unclorHLand how thoy arf! recorclc<l in the Single
Cohunn or 8irnplo Cnah Book und how it, iH baluncod.
Examples:
1. ws start.s a busin,e,qs <~~ lsl~pril, 2020 and introdtu:(JH t 50,000 in cash as capital.
(i) Vi'J
Cash rocc1vcd by Lhc Jirm will bo rccorclcd in the Receipt~ i;,i<le (i.e. Debit sicle)
1
of tho Cash Book as loJJows: '
Dr. CASH BOOK Cr

Date Particulars L.F. < Date Particulars L.F. ~

2020
-- 2020
=

1 To Capital Ne 50,000 April 50,000

April
- 50,000
1 By Balance cld
50,000
•--=-
April 2 To Balance bid 50,000
.. --- ----
(ii) Goods. are ~urchased in cw;h on 2nd Apr tl, 2020
' for ~ 20 000
Cash
• is paid by tho firm , it w1·11 record J. t in
. the p, , .
tho Cash Book a~ follow : ayrnents 1-nde (i.e., Credit side)
0f 8
Dr. CASH BOOK er.
Date Particulars LF. ~ Date Particulars
2020
- 2020
- L.F. '?

April 2 To Balance b'd 50,000 April 2 By Purchases Ale 20.00o

--
~
50,000
-
April 2 By Balance dd 30,000
50,000
April 31 To Balance b'd 30,000
-
 10.1

an CO$h for ' 80,000 on 3rd April, 2020.

tJ1f ,old
.-.a1ved · 1n the Receipts 11de (I e., Debit 11de)
by the firm ' 1t will record it
•--"'
\bl Cash Book as follows:
CASHBOOK Cr.
LF t Date
2020
LP
'
30,000 April 3 By Balance dd 80000
30,000
60,000 60000
• To 8lllnC8 lid 60,000

\ikas withdraws~ 5.000 for his personal use on 4th April, 2020.
Ca!.h 1s paid by the firm, it will record it in the Payments side (i.e., Credit side)
of the CaHh Book as follows:

CASH BOOK Cr.

Particulars L.F. ~ Date Particulars L.F. t

2020
4 To Balance bld 60,000 April 4 By Drawings Ale 5,000
April 4 By Balance c/d 55,000
60,000 60,000
5 To Balance bld 55,000

t) t 2,000 is paid to the printer for printing Bill Book, Letter Heads, etc., on 5th
April, 2020.
Cash is paid by the firm, it will record it in the Payments side (i.e., Credit side)
of the Cash Book as follows:
Dr CASH BOOK Cr.
DIii Partiaiars ~ Date Particulars L.F. t

..
L.F.
-
2020
5 To Balance tid 55,000 April 5 By Printing and
Stationery Ale 2000
April 5 By Balance <id 53,000

55,000 55,000

-• To Balance l:id 53,000

L1k~wise each cash transaction is recorded in the Cash Book on the date
it l tran acted. Cash Book from 1st April, 2020 to 5th April, 2020 will be
follow :
 I Te. ... No
-
..
·-·- ,,,,. '' .,
,,,,. Ir

~
Ap(I By d
80,000
April 8 To Balance lid 53,000

Illustration 1.
Prepare Single Column Cu,.~h H,,ok Im t h 1• mtJJ J , J, ~r ~
tran1-mctionH of Amituhh of <!h1•111w1
2020
April 1 Cuh In Hand
April 2 CuhSales
April 3 Deposited cuh In Bank
Aprll 3 Issued cheque to a Creditor t 49 900 atwr Cl
April 4 Wages paid In cash
April 4 Cash Sales
April 7 Depostted cash ,n Bank
April 9 Paid cash to transporter again t lhe r B N
April 20 Paid cash for Repairs
April 21 Purchased goods on credit from U& Co
Aprll 28 Paid cash to Sunil, a cred,ror, attar d ,d
April 29 Paid electricity bdl m cash
A rll 30 Cash collected from Mahe h (Debfr,r) l .4 ,

Solution: In the Books of Am tabh

Dr. CA ,H BOOK (
Date Particulars LF
2020 ' 2 t
April 1 To Balance bid
25000 Ap
April 2 To SaJnA/c
2 20000 Ap 4
April 4 To Sales Ale
1 80 000 Ap 7
April 30 To Maheah
45000 Ap
2
Apnt 8
April By
Ap,i By BaJan:e
.. 70.000
72,500
 800kS I-C as h Book 10.7

r is b
,: ;: :rr,aae on 3rd April, 2020 to a credito YCheque. Hence, It is not recorded in Single Column
~ r,ook-
April 202 .
of goods from U & Co. on 21st • 0 IS a cred"it purchase. Hence, it is not recorded in
r;WJII coiumn Cash Bo ok.
deducting c h .
.....a 8 creditor is paid ~ 9,500 after rn as dis~oun~ of t 500. Cash Discount
Received will
rna l entry. The Jou
~:.nrded through Jou aI entry will be:
IJ8 'UV" { {

sunil ... Dr. 500

To Discount Received A/c 500
ed on payment of ~ 9,S00)
(Being the cash discount receiv
sh Discount
btor after a11 owing him cash discount of~ 2,500. Ca
. .
his collected from Mahesh, a de ' ~ ~
J cas l entry. The Journal entry will be:
ed through Jou rna
Allowed will be record
Discount Allowed Ale .. .Dr. 2,500
2,5 00
To Mahesh
on payment of~ 45,000)
(Being the cash discount allowed

sh Co lum n) cann ot have a Credit Balance

cash Bo ok (Ca
ok ca nn ot sh ow cre dit ba lance because ca sh pa ym en ts
(a5h Column in the Ca sh
Bo
pa ym en ts
in ha nd . At th e mo st it ca n show nil balance wh en ca sh
rannot exceed ca sh
:re equal to cash in ha nd .

gle Column Cash Book

Mechanics of Posting from Sin
lows:
cre dit sid es of Sin gle Co lum n Ca sh Book is carried ou t as fol
Posting of the debit an d
bi t Si de : Re ce ipt s are rec ord ed in the debit side of the Ca sh
Posting of Re ce ipt s or De
ss of du al asp ec t the y are posted to the cre dit side in
Book and to complete the pro ce

the respective ledger ac co un t

by wr iti ng 'By Ca sh Ale'.
us tra tio n 1)
en try for ca sh rec eiv ed fro m Mahesh (See las t en try of Ill
For example, the sh Book
is po ste d to M ah es h's Ac count from the debit side of Ca
on 30th April, 2020
as follows:
Cr.
MAHESH
-
Date Particulars J.F. t Date Particulars
J.F. t

2020 45,000
April 30 By Cash Ale
. the ered.1t s1.d e of
d ed m
en ts are rec or
Posti ng of Pa ym en ts or Cr ed it Si de : Pa ym
let e the pro ce ss of du al asp ect the y are posted to the de bit
t~e Cash Book an d to comp t
by en ter ing 'To Ca sh Ale'. Fo r example, the en try for pa ym en
illde in the ledger accounts
~.

0
Particulars 'J.F:- t Date Pamcutars J.t-.
' .,_

ti 29 To Cash Ne 9,000

•t us take Cash Book with imaginary amounts and observe their posting in ledger
counts:
In the Books of Amrit
. CASH BOOK
~te Particulars L.F. t Date Particulars L.F. -tCr.
-
l20 2020
arch 1 To Balance bid 15,000 March 8 By Purchases Ale ~3,200
arch 20 To Commission March 28 By Commission Paid Ale ;550
Received Ale :650 March 28 By Samuel ;7,150
March 31 By Salary Ale -.1,000
March 31 By Electricity Expenses Ne ;60()
March 31 By Balance c/d 3,150
15,650 15,650
4)ril 1 To Balance bid 3,150

I~~dger Accounts
PURCHASES ACCOUNT Cr.

[)ate
1
Particulars J.F. r Date Particulars J.F. ~

~20
,farch 8 To Cash Ale 3,200 :
COMMISSIC \J PAID AC 80UNT
~
~arch 28 To Cash Ale 550
SAMUEL
I

020 I
tar 28 To Cash Ale ,I 7,150 -
SALARY AC 80UNT
)20
arch 31 To Cash Ale 1,000 :
ELECTRICll 'f EXPENS ;s ACCOUNT
leO
arch 3 To CashA/c 600 -
COMMISSIC 'J RECEl\i ED ACCOUNT
2020
I- March 20 By Cash Ale
IU, IU

Dr.
Date Partlculara J.F
RENT ACCOUNT
Date Paf1iCt81 ma,
■I
2020
April 30 To Cash Ale 6,000 t
1
(2) Two-Column or Double Column Cash Book (Cash Book with Cash and Bank Colun._. l
Two-Column CaHh Book or Double Column Cash B,,<Jk is a Ca ';h B<Jok which has
co\umnH for amount on each 8 ide; c,no c;olumn tc, recc,r<l caHh transadfons and the other
column to rPcorcl bank tranHactionH. Uepoi.;it of ch<;qW;H <,r cash, if,SU6 ,Ji' cheques a
wit.hdrnwal of cm,h from hank, elc., are recorded in bank c,,Iumn ,Jf the Cash &xJk. Th
Two-Column Cash Book reprrn-;enLH two account,:;, i.e., Cash Account and BankAeunin
Bank /wcounl iH an Asset Account ar,; per Modern ApprCJach (Persrmal Acc<JUnt as per
'l'raditional J\pproach) and while recording transactiCJns in the bank column of tht
Cal-\h Book, the rule of Debil and Credit applicable to Asset Account, i.e., 'Increase in
assets i.s debited and decrease credited (or the rule applicable to Personal Account, i.e.
'Debi.I the receiver and Credit the giver') is followed.
Thus, for cnsh deposited into the bank-bank balance incr~ases or bank is th~
receiver and therefore is debited in the bank column of the Cash Book. Since cash E
dl'posited inlo bank, i.e., cash decreases or cash goes out, cash column is credited in the
Cash Book. Similarly, for cash withdrawn or cheque issued-bank balance decreases and
bank would he the giver, therefore, it is credited in the hank column of the Cash Book.
Cash discount may be received when payment is made by cheque/cash and similarly
it may be allowed when payment is received. Cash discount allowed or received is
recorded by passing Journal entry as follows:
For DisCOU,nl Allowed:
Discount Allowed Ale ...Dr.
To Mehul (Say)
For Discount Received:
Raima (Say) ... Dr.
To Discount Received Ale
In c~se, cheque is dishonoured discount allowed or received is also written back by
passmg Journal entry in the Journal Proper as follows:
For Reversal of Discount Allowed:
Mehul (Say) ...Dr.
To Discount Allowed Ale
For R<!versal of Discount Received:
Discount Received Ale ... Dr.
To Raima (Say)
The ruling of Two-Column Cash Book•1s as follows:
Or. CASH BOOK (DOUBLE COLUMN)
Date Particulars LF cash(~) Bank ({) Date Particulars L.F. Cash~ Bankf
Receipts S Id e
Payments S i de

Balancing of Double Column Cash Book

Cash columns are balanced in the same ma .
111 th
The process is similar for balancing the bannkner las e case of a Simple Cash Boo
co umn.
 10.9
special Purpose Books I-C ash Book

·
. IMPORTANT NOTES tion.
not given, is acc oun ted as cash transac
1. Transactions in whi ch par ty name is as
Sold these transactions are acc oun ted
For example: Goods Purchased or Goods
h B~ok.
cash tra~sactions and are recorded in Cas
., goods purchased from Rahul or goo ds
2. Transact10ns in which part y name is given (e.g k.
sactions and are not recorded in Cash Boo
sold to Parul) are accounted as credit tran sed
., goo ds pur cha
3 · ~ransactions in which both par ty name and Cash are given (e.g
to Anita) are cash transactions.
m cash from Pawan or goods sold in cash

Illu stra tion 2.

Cash Book and post them in the Ledger:
Enter the following transactions in a Single Column {
2020 50,000
April 1 Cash in Hand ········································· ····························· ... , ... , .......................................................... 10,000
April 5 Cash purchases ················ ········ ········· ··········--··········································································--·········· 8,000
April 8 Cash sales ········································· ··············································································""'''"'"'"''"' '''''' 5,000
......... .................................. ................ ..................................
April 15 Purchased furniture ......... ........................ 1,000
........ .......................•••••· ••· ·······
April 25 Received comm ission ......... ......... ......................................................... 6,000
April 30 Paid rent ....................................................................................
............................................................
Sol ution: Cr.
Dr. CASH BOOK
{
{ Date Particulars V. No. L.F.
Date Particulars V. No. L.F.

2020 2020
10,000
April 1 To Balance bid 50,000 April 5 By Purchases Ale
5,000
8,000 April 15 By Furniture Ale
April 8 To Sales Ale 6,000
April 30 By Rent Ale
April 25 To Commission 38,000
. Received Ale 1,000 April 30 By Balance cld
59,000
' 59,000

Ledger
Cr.
PURCHASES ACCOUNT
Dr. {
{ Date Particulars J.F.
Particulars J.F.
Date
2020
5 To Cash Ale 10,000
April
Cr.
SALES ACCOUNT
Dr. {
{ Date Particulars J.F.
Date Particulars J.F.
2020
April 8 By Cash Ale 8,000

FURNITURE ACCOUNT Cr.

Dr.
Particulars J.F. {
J.F. { Date
Date Particulars
2020
5,000
April 15 To Cash Ale
COMMISSION RECEIVED ACCOUNT Cr.
Dr.
J.F. { Date Particulars J.F. {
Date Particulars --•

2020
April 25 By Cash Ale 1,000
SP"" PIJfP"58 eooks :-cash Book _1
10 1

)low to w1thdrnw morp nmount t1

!,
8'1"k ,nAV rnorP nmonnt than tlw hnlnrwe t•n
clPpotutt•cl. If th(• hnnk nllow the firm
t
tlw nc·rount, it iR known ns Ove rdra ft
\\1thdrA ·dr11ft In such ,, cn~c• I t I
" the hnnk column on th(" cred it aid" will
tor IJBPk Olvc• th1' tolnl of lh•blt siclt•, 1'<ll n 1'.'fl(lren · I ,; 'To
· en on t he (I(1 I)I't SIC
·C ·IS writt
·
er Id'Hlllrn ('ll t lw tot~ls 'll'l' writ lP c 1 ea
be tiil!~ t (
1
.<d'n on the two Hides oppoi;;itc one anot her. Tlw
n, J 11cc <' · ,nf<'rrd on ll~1l: Cl'".Ji •t
81 e me11 t' . '13 J '
,,. l"' t1ll'll I ,.;\I
tonm g y 3alancc bid.
l J Ille
Always Remember
sh Colurnn will eithe r ~eve debit balance or nil b alance.
C ay have eItt-i d b' t).
B nk Colurnn m. h C h er e It (balance in Bank) or credi t balance (Ove rdraf
nd Bank Columns is maintained, Cash Acco unt and Bank
f cash Book wit as ~
Account are not opened in the ledger.
erva tion s
firo-Colum~ or Dou ble Coluni~ Cash Boo k-So me Obs
Book:
F uowing pomt s sho~ ld be ~oted m resp ect of Two-Column Cash
1
capi tal in the busi ness .
(i) When new busm ess is s~arted, prop rieto r intro duce s
unt brou ght in cash is
Capital may be brou ght m cash and/or by cheque. Amo
side) with expl anat ion
written in the cash colu mn (in Receipts side or Debit
in the bank colu mn (in
·To Capital Ale'. Amo unt brou ght by cheque is writt en
Receipts side or Deb it side) with expl anat ion 'To Capi tal
Ale'.
opening bala nce is
If a new Cash Book is start ed for an existing business, the
written as: 'To Bala nce bid'.
(ii) All receipts are writ ten on the receipts side, cash
in the cash column and cheq ues/
the nam e of the acco unt
drafts in the bank column. In the parti cula rs column,
under which the paym ent has been received is writt en.
on the same day, the amo unt is
When a cheque or a draft is deposited in the bank
if cheques and drafts received are
recorded in the bank column on the debit side. But,
recorded in the books of acco unt
not deposited in the bank on the same day, they are
through a Journal entry as follo ws:
Cheques in Hand Ale ...Dr.
To Ashutosh {s.ay)
recorded in Cash Book by writin g in
When the cheq ue/dr aft recei ved is depo sited , it is
the bank column on the recei pts side as follows:
To Cheques in Hand Ale
will become nil.
In this manner the balance in Cheques in Hand Ale
00 is received by Shlok from Maira .
Example: On 27th Marc h, 2020 a cheque of { 10,0
.
The cheque is depo sited in the bank on 31st March, 2020
s:
The Journal entry passed by Shlo k shall be as follow
2020 ~ 10,000
... Dr.
'Aarcr 27 Cheques in Hand Ale
~ 10,000
To Maira
h, 2020 , it will be recor ded
On deposit of cheque from Maira in the bank on 31st Marc
in the Cash Book of Shlo k as follo ws: 0
~~
-
~
Date Particulars L.F. Cash I
Bank Date Particulars L.F. Cash Bank
t t
- -
{
-
{
- - -·i--

2020

--- °
Mar. 31 T Cheques In Hand Ale ... 10,000
 10.12
I• • ; ; ..
(iii) Payments are written on the payments side, i.e., cash payments in the
column and payments by cheques or drafts in the bank column.
In effect, if by a transaction the bank balance increases, the bank column is de
and if the hank balance decreases, the bank column is credited.
(iii) Contra Entry: Contra entries are the entries which affect both cash and hank, i.
hnlnm•p of one will decrease and the other will increase due to such tr~nsactio~
Such transactions are recorded on both sides of the Cash Book, once m ~he cash
column and once in the bank column. Let us take an example to understand it hetf:er
(a) Cash deposited in Bank t 20,000: In this ~ransacti?n, Bank _Account~
~o be debited and Cash Account is to be .credited. Debit aspect_ is recorded
1n the receipts or debit side of the D_ouble Column Cash B~ok _m the Batik
Column and credit aspect is recorded m the payments or credit side ofDoub}e
Column Cash Book in the Cash Column.
(b) Cash withdrawn from Bank for Office Use t 10,000: In this transactio
Cash Account is to be debited and Bank Account is credited. Debit asp~
is recorded in the receipts or debit side of the Double Column Cash Book
in the Cash Column and credit aspect is recorded in the payments or credit
side of the Double Column Cash Book in the Bank Column.
Contr~ ;nt~ies a~e not posted in the Ledger Account and are marked with the
letter C written in the L.F. column to indicate that these are contra transact·
and are not posted in the Ledger Account. ions
(v) Cheque deposited
. in bank, if returned dishonoured, i ·e·, is not po~d
cu. ,
reduces the
ba 1ance 1n bank. The uncollected amount is recorded in the payment di
side of the Cash Book in the bank column with name of the part h ~ or cdre t
ch · th t· 1 Y w o issue the
eque 1n e par 1cu ars column. In other words when a cheque 1s · ·
ac t dd . . ' received from
us omer an epos1ted in the bank is returned dishonoured th C t '
. Account is debited and the Bank Account is credited. ' e us omer s
(vi) If chequ_e issued by the firm is not paid on presentation . . .
column m the receipts or debit side of the Cash Bo k . ' it is recorded rn the bank
whom the cheque was issued. o with the name of the party to
(vii) A cheque received may be given to another .
The receipt and endorsement of h ?arty, i.e., endorsed to another party.
b h . c eque is recorded th h
ecause c eque is not deposited in the Bank roug a Journal entry
t 25,00? received from Tarun is end . Account. For example, cheque for
entry will be as follows: orsed in favour of Charnesh, the Journal
Charnesh
To Tarun ... Dr. ~ 25 ,000

(Being the cheque received from Tarun endorsed in f f 25,oOO

iii) Cheques or drafts d . db avour of Charnesh)
epos1te Y cust
t h e bank column i th . omers directl · .
;x) . n e debit or receipts 'd y into the bank are entered 1Jl
" If the firm pays charges 1orc si e of the Cash B ook
servic ·
written in the p es to the bank · .
. ayments or credit side of the C called Bank Charges, it JS
ash Book in the bank colun'.111·
Special Purpos e Books I c h
\ as Book .13
(x) Cmih Di1-u:ount All 10
OWQc1 or RPc•eiv •d
l>iHcount mny h<i l\l}
(xi) ·· e
. 1· h <>Wee1 when th' are record ed by paRsing a .Journ al entry.
tH < IH onour ecl, Di~c t All c Payme nt iR receiv ed by chequ e. If the c h eque
I ou
PropP r. ~ut,, the! <mt f'n h<>wecl ·18 writte
· n hack by pa sing · J ourna1
8 an entry m
8imilu rly, cm,h dii-ic:y tort e amou nt of chequ e iR record ed in the Cash
Book.
the r Iwque is clisho no~un •dmay. he rp~ceivec
. . 1 w h en paym ent 1s . ma d e b y ch eque. If

th e
f
in ,Journ al Prope r. Ent! 1)iAcou nt Receiv ed is writte n hack by passin
g an entry
.
Illust ratio n 3. ry or amou nt of chequ e is record ed in the Cash Book.
Prepa re rrwo-column Cash BOl.)k from th f 11 . .
2020 e o owing transa ctions :
March 1 Cash in
Hand ~ 15,000; Cash at Bank~
March 3 Purchased goods for cash'{ 501000
6 ,ooo.
March 5 Deposited in bank~ 5,000.
March 8 Cash sales~ 10,000 .
March 10 Cash
withdre w from bank for office use ~ 2,000.
March 12
Received cash from Damini ~ 3,000, allowed her discount of '{ 1oo agains
t dues.
March 15
Received cheque from Nimrat ~ 2,000 and allowed her discou nt'{ 75 agains
t dues.
March 18
Received a post dated cheque (dated: 23rd March, 2020) from Deepak
for'{ 5,000.
March 23 Chequ e received
from Deepak deposited in the bank.
March 24 Issued cheque of 2,500 z
to Chander, he allowed discou nt'{ 125.
March 27 Withdr ew from bank for personal use
1,500. z
March 28 Sold goods to Ashok Mitra 40,000. z
March 30 Purcha sed goods from Chander z 50,000.
March 31 Receiv ed cheque from Ashok Mitra z 2,000 and deposited in the bank.

Solut ion:
Dr. CASH BOOK (TWO-COLUMN)
Cr.
Date Particulars L.F. Cash Bank Date Particulars L.F. Cash Bank
'{ '{ '{ '{
2020 2020
Mar. 1 To Balance bid 15,000 50,000 Mar. 3 By Purchases Ale 6,000 ...
Mar. 5 To Cash Ne C ... 5,000 Mar. 5 By Bank Ale C 5,000 ...
Mar. 8 To Sales Ne 10,000 ... Mar. 10 By Cash Ale C ... 2,000
Mar. 10 To Bank Ne C 2,000 ... Mar. 24 By Chander ... 2,500
Mar. 12 To Damini 3,000 ... Mar. 27 By Drawings Ale ... 1,500
Mar. 15 To Nimrat ... 2,000 Mar. 31 By Balance c/d 19,000 58,000
Mar. 23 To Cheques in HandA/c ... 5,000
Mar. 31 To Ashok Mitra ... 2,000
30,000 64,000 .30,000 64,000
Apr. 1 To Balance bid 19,000 58,000

Notes·
. . h 28 and March 30 are credit transactions. Hence, are not recorded ·in Cash Boo k.
1. Transactions of Marc
2. Cheque received from Deepak on 1Bth March, 2020 is dated 23rd March, 2020. Entry on receiving the cheque on 18th March,
2020 will be recorded in Journal Proper.
1 .\ lu s tr a ti o n 4. S ta ti o n e ry H o u se , D e lh i (Pro .
a sh a n d b a n k tr a n sa c ti o n s o f G u p ta . Prietot
"Fron1. th e fo llow ing c o n th o f A p r1 l:
D o u b le C o lu m n C a sh B o o k fo r th e m
P ra m o d ), p re p a re

Ii\
, Cash in Hand
Cash at Bank
ue
Amar and paid by cheq
3 Purchased goods from
5%
,000 less trade discount
April 9 Cash purchases of ~ 16
1,oOO
ps
April 10 Purchased postage stam
1,00,oOO
bank
April 12 Cash sales deposited in
8,200
Drew cash for personal
liSe
April 14
a de btor, ca sh ~ 6,000 and cheque ~ 10,000
April 15 Received from Naresh,
in bank
t of his accoun t of ~ 17,000, both deposited
in settlemen 16,000
A pr il 15 Withdrew from bank
6,000
A pr il 16 Paid wages
10,000
P ai d Rent
50,000
A pr il 19 P ai d ad va nc e to Pa
wan by cheque
ods 16,000
A p ri l 23 d a ch eq ue from Subhash against sale of go
R ec ei ve scou nt~ 720
d ~ 10 ,000 by a cheque, he allow~d cash di
A pr il 25 6,000 an
P ai d to A m ar cash f 12,000
deposited into bank
A pr il 26 Manish, a customer, 2,000
A pr il 30 B an k charges 10,000
30 dr ew from ba nk for paying income tax
A pr il W ith
 ~Igel• ~ rpo Book I -Ca h Book 10.15
Solution:
In th, Book■ of Gupta Stationery Hou■e
DOUB! E COLUMN CASH BOOK Cr.
LF Ca h Bank Date Particular F Cah Bank

' ' 2020

To Ba nee bid
88,000 1, 10,000 April 3 By Purchases Ale
To Sale Ne 14000
1,00,000 April 9 By Purchases Afc (Note 2)
s To Naresh 15200
6,000 10,000 April 10 By Postage Ale
5 To Cash Afc 1,000
C 6,000 April 14 By Drawings Ale
15 To Bank Afc 8,200
C 16,000 April 15 By Bank Ale
Ap 23 To Sales Ne (Note 3) C 6,000
Ap 16,000 April 15 By Car,h Ale
26 To Manish C 16,000
12,000 Apr11 16 By Wages Ale
6,000
April 16 By Rent Ale
10,000
April 19 By Pawan
50,000
April 25 By ft.mar (Note I)
6,000 10,000
April 3(1 By Bank Charge,; Ale
2,000
April 30 By Drawinqs Ale
10,000
April 30 By B&l,.mo: cl<J
1,10,000 2,54,000 57,600 1,52,000
~·:::.
May 1 To Balance bid
57,600 1,52,000 1,10 000 2,54,000
Notes:

1. Disc,01 ,at AUou.,.ad ,.. ... ,..1 t;>.•

10 .18 Double Entry Book Keep
ing-CBSE XI

Il lu st ra ti on 6.
k
Cash Book w .ithCas hat nd B an Co11 u mns from following infort:'ation:
Pr ep ar e Double Column
2019 ,

Sep\. ' Cash in Hand 7,S(X)

Bank Overdratt
Sept. 2 Paid Wages 35,000
Sept. 5 Cash Sales 2,000
Sept. 1O Cash Deposited 70,000
in Bank
Sept. 15 Goods Purchased 40,000
against Cheque
Sept. 20 Paid Rent I 20,000
Sept. 25 Drew from bank 5,000
for personal use
Sept. 30 Salary Paid 4,000
10,000
So lu ti on :
Dr.
CASH BOOK tDOUBLE CO
LU MN)
Date Particulars Cr.
l.F. Cash Bank Date Particulars
~
l.F. Cash Bank
~
'{ ~
1 1o Balance bid 2019
7,500 Sept.
5 io Sales Ale 1 By Balance bid
70,000 Sept. 35,000
10 io Cash Ale 2 By Wages Ale
C 40,000 2,000
30 1o Balance c/d Sept. 10 By BankAJc
19,000 C 40,000
tBank Overdratt) Sept. 15 By Purchases
Afc ..
Sept. 20 By RentAfc 20,000
Sept. 5,000
25 By Drawings Ale
Sept. 30 By Salary Ale 4,000
Sept. 30 By Balance c/d 10,000
77 ,500 59,000 20,500
Oct. 1 1o Balance bid
20,500 77,500 59,000
Oct. 1 By Balance bl
d
Il lu st ra ti on 7. 19,000

Pr ep ar e C as h Book with
B an k Colu m n of Bh arti, Lu
ckn,ow from th e followin
2020 g tr an sa ct ions:
April 1 Cash in Hand
Cash at Bank (Overdraft) ~

2,20,000
April 3 Deposited in Bank
60,000
April 4 Goods purchased against cheque
80 ,000
April 7 cash Purchases
34,000
April 8 Paid commission by cheque
16,000
April 9 Withdrew frorn bank for personal use 12,00o
2 5()0
 ,n/\.t:B Books /-Cash Book
s,,,d"pu,,,-- 10.19
12 IReceNtd from Ved
.,. Half of the amount was deposited into bank on the same day -
lntereSt collected by Bank 14,000
16
_,,. 20 Cash Sales 42.,000
l,plil 22 Salaries paid 40,000
APfi 22 Goods sold to Sona & Co., Kolkata 36,000
/4)ril 23 Received cheque dated 3rd May, 2020 from Sona & Co. after discount of, 800 35,200
In the Books of Bharti, Lucknow
Solution:
DOUBLE COLUMN CASH BOOK Cr.
Dr.
L.F. Cash Bank Date Cash ! Bank
Particulars Particulars L.F.
Date
r r t \ t
2020
2020
i
2,20,000 ... April 1 By Balance bid .... 60,000
Apnl 1 To Balance bid
To Cash Afc C ... 80,000 April 3 By BankAfc C 80,0001
i ...
Apnl 3
6,000 ... April 4 By Purchases Ale 34,000
Apnl 12 To Ved
Apnl 12 , To Cash Afc C ... 3,000 April 7 By Purchases Ale 1~~000\ ...
April 16 To Interest Afc ... 14,000 April 8 By Commission Ale ... 12,000
Apnl 20 To Sales Ale 42,000 ... April 9 By Drawings Ale
I 2.500
April 27 To Balance dd ... 11,500 April 12 By BankA/c C ~:~\ ...
(Bank Overdraft) April 22 By Salaries Ale 40,000\ ...
April 30 By Balance d d 1,29,000i ...
2,68,000 1,08,500 2,68,000i 1,08,500
2020 2020
May 1 To Balance bid 1,29,000 ... May 1 By Balance bid ... 11,500
Note: Transaction for credit sale of goods on 22nd April, 2020 will not be recorded in Cash Book.
Entry for cheque received on 23rd April, 2020 and Discount Allowed will be recorded by passing a Journal entry because
it is a post-dated cheque and is not deposited on the same day. The Journal entry will be as follows:
Date Particulars L.F. Dr.~) Cr.~
202o
April 23 ... Dr. 35,200
Cheques in Hand Ale
'
Discount Allowed Ale ...Dr. 800
To Sona & Co. 36,000
(Being the discount allowed to Sona & Co. against the payment
received by cheque)
 1o.l0 Double Entry Bo ok K
ee pi ng -C B S E XI
m u st ra ti on 8.
Pr ep ar e T uo -c ol um n
C as h Book of T ar un
fron1 th e following tr
2020 an sa ct io ns :
Apri 1 Cash n Hand~ , .200: Overd
Apri
raft at bank~ 15,000.
3 Capital introduced ~ 20
,000 out of which ~ 16,00
Apri 4 0 is by cheque and is de
Purchased goods from Sh posited in the bank.
yam Traders, Lucknow to
r~ 3,000 and they allow
was paid by cheque. ed trade discount'{ 20
0. The amount
Aprtl 4 Goods purchased tor ca
sh~ 4,000.
Apo\ 5 Sold goods to Mohan on
credit~ 5,000.
Apli 6 Received cheque from Ra
kesh ~ 2,450 after allow
Apn 1O
ing him discount~ 50.
Cheque received from Ra
kesh deposited in bank.
Apnl 11 Settled the account otTej
Printers of~ 750 by payin
Apnl 12 Cash received from Moha g cash'{ 680.
n~ 4,750 in settlement ot
Apnl 16 Received~ 1,000 from Pa his account of ~ 5,000.
ram, whose account ot ~
Apnl 17 2,000 was written off as
Received from Muri, on be bad debts earlier.
half ot Manohar ~ 200.
19 Received a cheque tor~
800 from Mukesh, which
Apn1 20 was endorsed to Nitin.
Sold old furniture tor~ 70
0, payment received in ca
Apn\ 25 Withdrawn from bank~ sh.
3,000.
April 25 Drew from bank for perso
nal expenses~ 1,000 an
Apnl 28 d for income tax~ 500.
San1iv who owed~ 400
became bankrupt and pa
April 28 id 60 paise in a rupee.
Received repayment ot a
loan advanced to Ram~
April 30 Interest debited by bank 3,000 and deposited ou
~ 375. t of it~ 2,500 into the ba
nk.
April 30 Deposited with bank the
balance after retaining~
2,000 at office.
S ol u ti on :
Dr. In the Books of Tarun
TWO COLUMN CASH BO
Date Particulars OK
L.F. Cash Bank Cr.
Date Particulars
20 20
~ ~ u=. Cash Bank
Ap 1To Balance bid 2020 ~ r
1,200
Ap 3 To Capital Ale April 1 By Balance bid
4,000 16,000 April 15,000
Ap 10 To Cheques in Hand Ale 4 By Purchases Ale
Ap 2,450 April 4 By Purchases Ale 2,800
12 To Mohan
4,750 April 11 By Tei Printe 4,000
Apn 16 To Bad Debts rs
April 25 By Cash Ale 680
Recovered Ale
1.000 April 25 By Drawings C 3,000
April 17 To Manohar Ale
200 1,500
Apnl 20 To Fum·ture Ale (r 1,000 + r 500)
700 April 28 By Bank Ale
April 25 To BankA/e C 3,000 C
April 30 By Interest Ale 2,500
Apnl 28 To Sanjiv 240 April 30 By Bank Ale
April 28 To Loan (Ram) Ale (Note 3)
3,000 April 30 By Balance C 8,910
Apnl 28 To Cash Ale c/d
C 2,500 2,000
April 30 To Cash Ale C 8,910
(Note 3)
18,090 29,860
18,090
ay 1 To Balance /:id 2,000 7,185
 10.22 Double Entry B o o k ~

Illus trati on 9.
From the following partic ulars , prepa re a Cash Book with suita ble colum
ns:
2020
March 1 Cash in Hand...................................................................................................
. ... ... .......................
Bank balance with State Bank of India (SBI) ............................................................... • •
·
Overdraft with Punjab National Bank (PNB) ................................................................. ····
•
March 3 Cash sales............................................................................................................
............- ••
March 5 Paid salary to staff by cheque on SBI ............................................................
..................·-··· ·
March 8 Cheque received from Anil deposited with PNB ................................................
.................. -
March 1O Cash deposited into SBI ....................................................................................
..................._. ·
March 12 Amount transferred from SBI to PNB by cheque ................................................
..................·--· --·
March 15 Cash withdrew from SBI .. .. .. .. .. .. ... .. .. .. ....... .. ....... .. .. .... .... .. ... ..... .. ....... ..... ............
.................... ···

Solu tion: In the Books of ...

Dr. CASH BOOK
Date Particulars L.F. Cash Bank Date Particu a'S ...f. Cash
SBI PNB
~ r
2020 2020
Mar. 1 To Balance bid 8,500 25,000 Mar. 1 By Ba1ancs b. a
Mar. 3 To SalesA/c 7,000 Mar. 5 By Sa aries AJc 0
Mar. 8 To Anil 9,000 Mar. 10 By SBI C 5000
Mar. 10 To Cash Ale C 5,000 Mar. 12 By PNB C 'H.lCQ
Mar. 12 To SBI C 3,000 Mar. 15 By Casn Ax, C 800:
Mar. 15 To S81 C 8,000 Mar. 15 By Baance dd 18:SOO 9000
Mar. 15 To Balance c/d 5,500
23,500 30,000 17,500
Mar. 16 To Balance bid 18,500 9,000 Mar. 16 By Balance bid
 10.27

-~.
,Pl!TTY CASH BOOK
·_ I '

• x· ·. ~ . f N>< >t lt'hicJ, ·:- u:-e d the

for p_u rpose o(recordingexpenses inuoluing
ma m cashier are recorded. Petty
, • :: ~-~· . :·(-~ :,t·tt_, f.\:0<· :~t'-"· rcc,~ipts /!·om_
1

:: ikt· J¾:U) l \?.; ·. Acc o1, nt (1/l d rs ma mta

me d by Petty Cashier.

g of Petty cas h
....
al~ pay me nts is rec ord ed on the cre dit
~~. _..;,-er ro Hw l'l't ty (\1s h1l 'r for ~m
e of the
\ce oun t nnd is pos ted to the deb it sid
.... \b/1...\/.~ Book -1.s ·ByLedl"t'~l'ltty". C:1sh ~
! ...... t'.. . , -.-.._1unt in •h2
\ ~ .l :-1.\.. \.
.. :: t\-

ple (Or din ary ) Sys tem or by Im pre st Sys tem .

:·cy,_·_15:-::&x-~ 111~1y be nrn inr nin ed by Sim
s·~o e System of Petty Cas h
t., Ca s 1
1. Pet ty Ca shi er is giv en app
rop riat e am oun t of cas h
c
I:::..::.:5 0 :· s~·~;.i.:i.',: S_,srcn of Pet r.
~pe ndin g the am oun t. he sub mit s the Pet ty Ca sh Acc oun t to the He ad Cas hie
.::::.l:i:c:
-orest System of Petty Cas h
uired for pet ty exp ens es for a per iod
r=.:.e :-}p, s)-stem. an esti ma te is n1ade of an1 oun t 1·eqt so est ima ted is given to the Pet ty
x.y :0: a ~ee k. a fort nig ht or a n1o
nth). The am 0tm
ty
oun t of pet ty exp ens es pai d by the Pet
t>-'~;~ in the beg inn ing of a pe1iod. Th e a1n oun t in
lly. Thu s, he wil l aga in hav e the fixed am
.=.1.,·-c1er LS :eim.bursed to him per iod ica
of the new per iod . Th is am oun t is cal led im pre st mo ney . Thi s sys tem
~-=- ~....nnin g
ing the am oun t spe nt fro m tim e to
·: .i:ar1..ng adYance in the beg inn ing and rei mb urs
~= 15 called im pre st sys tem .
Ca sh
Advantages of Imp res t System of Petty d cash.1er at
Ov , k Boo k is che cke d by the hea
trol er -uz sta es: Th e Pet ty Ca sh
i) Con r·
·
;'\ reg ular inte rva ls so tha t a mis tak
e, if c01 nm itte d ' is soo n rec tifi ed.
imp res t
ll1 C
__ontr ol Over Pet ty Exp ens es: Pet ty
exp ens es are kep t wit hin the lim its of
.:imce the pet t}. cash.ier can not spe nd mo re tha n the ava ilab le pet ty cas h.
iu) C b . . . d .
ontr o/ Over Fr d U d er thi s sys tem mis use of cas h can e m1n1m1se sin ce
the p tt. . au s: n ·
.
e } Cas hi er 18 · dra w cas h as and wh en he des ires
T not allo we d to
YPes of Petty
Fr · . Cash Bo oks
'••0\'11ng
are the tw O t
l. Sinipie p YPes of Pet ty Ca sh Boo ks:
2 etty Cas h Boo k
Analvtical p
1. s· ·
llrtp[ p
etty Cas h B 00k .
. .
Any Ca., e etty Ca sh B ook .. A Sim . al wit h a Ca sh Boo k.
'debit h Which th p ple Pet ty Ca sh Boo k is ide ntic
e etty Cas hie r rec eiv es is rec ord ed on the left han d sid e cas h col um n
hand 61~)t receipts 1 is rec ord ed on the rig· ht
11,.:t de (credit 0co urn n) and any cas h wh ich he pay s out
r Pay m t s of eve ry tra nsa ctio n
··,, ten 1·
n the 8 en s col um n). Th e dat e and par ticu lar
arne dat e and par ticu lar s col um n.
10 R f J, 111/1/,1 I nlr Vltt10A km,1,t11u CB

:UMl'II 1'1 IIYCA:HIIIO!ll\

11,11lh·11h11•1 II V1111d1or No Amountp
t'.,~h l\1l1lk 1)11(11

' I 1lh1)
'
I ln.11b ol I xp1111no:1
=1....-..=-l= = = = = L . . -- ~

lllu~t rnt ion l l.

1 1
1-'l't'm tlh' t~,\l1'" mg p:\1'( icHl:1r:-;, pn1p:1r1' 1'1 1l,v ( :1~d1 Hnnl< /'or UH• 111"1d,l
i ,,I' /\pr·tl, :l(J~()

5,CO,
~ Ort'\\'"'' f't'tt, (',lsh "'""'''"" """''ll'''" ""''''ll"I .• ,.. ,,.,, .... ,,111111111,, ,11,11111111 1u1111u111,1 uuu11111,
I ...., , " ' "

~) ~ P,l li f('r ~'l\$t,l~1l'' " ' " " ' I I . " ' ' " ' ' ' n .... , •• , .... II 11111 . . . . . . , ,
, 1111 .. ' 11111 I ii 111'' I ' ' . . . I,,' 1111 I•,. II' •• ' . , ••
,,,.,,,,,. ' " ' ' ' ' " ' .,, .. ,.,, 300
A+' ~ f.'\tr'-i tt'lt'~'hl,llt' t,ill "'" .......,......... ,... 11 . . . . , 11 . . " . ,. " . . . . . . . . . . . . . " . . . . . . , . . . . . . .
........... , ........... , ,, ...... ,, .. ,.,,, ,.,,.
,,,, . , 400
. 140
~ S P.,id for (\U1.l\1l' ""'" """ .............. ,.... ,..... "" "' ..... ,.. ,.. ,............... ,..... ,........ ,.,... , .,."" ................ ,,..........
Ar 8 P~1~i to, post.19t' .............................................................................................................................. .. 200
.........
1::. P.lld !or sundrit'S ...... ,................................................................................................................
100
Ap
.. 300
Ap 2~ P.~,d tor st.1tionery ..........................................................................................................................

lf tl1t' imprt'8( :rnllm nt is~ fi,000, show whn I. n 111ou 11 t. l.lw l'dl.y C:u-d1 i1:r wo11 Id be entitled
ft) dr:1,, in tlw lwginning- of' t.hc' IH'xl. mont.11
.

.Solution: PETTY CASH BOOK

Amount Received L.F. Cash Book Date Particulars L.F. Voucher AmountPil
'{ Folio No. f

2020
5,000 April 1 To Bank Ale
3
By Postage Ale
300
April
400
April 5
By Telephone Expenses Ale
April 8
By Cartage Ale
April 9
By Postage Ale
April 12 By Sundry Expenses Ale
April 27 By Stationery Ale
April 30 By Balance c/d

3560 May 1 To Balance bid

1,440 May 1 To Bank Ale
1
2. Anal ytica l Petty Cash Book: An Analy tical Petty Cash Book has two sid:
·
· t.s o1· cai-;h and nght
· use< l f'or n•c·on1·mg n•cp1p
• le 1s · use d for rec
hand 1,1·cl e, 1s rtic
hand sH
ing a ~a usu
paym ents. 1n this Cash Book, a sc.•parnte colum n is provid ed for record
A Jurnn is
. . ery, advert iseme nt, etc. co
. .• postag e, statwn . recO
item of expen d 1ture, 1.e
e is
provid ed for ·sundr ies' to record infreq uent payme nts. When petty expens
 10.2 9
Special Purpose Books I-C ash Book

nd side tota l pay men ts column sam e amo unt is also reco rde d in the
on the r.ight ha
of a ~ar ticu lar period, ana lysi s (ex pen ses)
app rop riat e exp ens e column. At the endb· · ·
Colum n are add ed and pos ted t 0 th e d e 1t side of the resp ecti ve accounts.
given below:
Specimen of Ana lyti cal Pet ty Cas h Book is
ANALYTICAL PETTY CASH BOOK
Voucher Particulars Stationery Postage Sundries
Receipts Date Total Conveyance Cartage
No. Payments and
Courier
{ ~ ~
f { {
f
I
an Ana lyti cal Pet ty Cas h Boo k, pet ty exp enses are classified into app rop riat e hea ds
In
ens es. Eac h hea d of exp ens e can be con veniently tran sfer red to app rop riat e
of exp
Pet ty Cas h Book becomes easy.
account hea d in the ledg er. Thu s, pos ting from
Balancing the Petty Cash Book
Cas h Boo k is bal anc ed at the end of the mo nth or a specified period. The
Petty
for pay me nts and exp ens es are tota lled and the tota l equ als the tota l in the
colu mns
me nts Col umn '. The rea fter , the Pet ty Cas h Book is balanced. The met hod of
'Total Pay
as tha t of a Simple Cas h Book.
balancing the Pet ty Cas h Book is the sam e
al Petty Cash Book
Difference between Sim ple and Analytic
Analytical Petty Cash Book
Simple Petty Cash Book
monly
is not The analysis columns a·e used for each com
1. Separate record of each kind of petty expenses occurring item of expenses sucn as stationery,
postage
maintained. and travelling. etc.
r space
n. The pages are not di11 ided down the centre, majo
2. II is written in the same manner as Cash Book is writte is provided for expense side having separate colum
ns for
The pages are divided down the centre.
expenses incurred regularly
heads
ent At the end of the period, expenses under different
3. At the end of the period, total expenses under differ can be determined easily.
heads cannot be determined easily.

Illu stra tion 12.

e an Ana lyti cal Pet ty Cas h Boo k on the Imp rest Sys tem from the following:
Prepar
{
2020 ...............................................................................
10,000
Jan. 1 Received for Petty Cash ........................................ 50
.............................................................................
Jan. 2 Paid Metro fare ........................................................ 250
·.. ··· .. ·· ........................ ·.................... ·.... ·.............. ·.....
Jan. 2 Paid cartage .......................... •• ... ·· ... ···· .......... ·· ..... 500
.................·.....................................·......................
Jan. 3 Paid for postage ...................... •••• .. ••·· .... ·· ................ . 600
·.. ·.. ··· ... ·.... ·.. ·....................... ·......................................
Jan. 3 Paid wages for casual labourers .......... •... •• ....... ········ · .. . 400
.... ·
Jan. 4 Paid for stationery ................................................ . .. 200
·...... ·...................................·................................
Jan. 4 Paid auto charges .................... •..... ·....... ·· ......... ··· .. 1,500
................................................................................
Jan. 5 Paid for repairs of chairs ..................... •• ................ . 100
....................................................................................
Jan. 5 Paid Bus fare ............................ ·...... ·....... ···.... · ·· 400
·· ··········· ···················· ··············· ................ ····· ······· ... ···
Jan. 5 Paid Cartage ..................... ••.. •·····.. ·········· ······· ··· ................................................................................... 700
Jan. 6 Paid for Postage ................. •••···· ············"· ........
............................................................................... 300
Jan. 6 Paid for Conveyance charges ................................ .. 300
···.. ·····.................... ··.......····· .. ·· ..................................
Jan. 6 Paid Cartage ...............................•••••·•····.. ···.....·
........................................................................... ···· 200
Jan.
~
6 Paid telephone bill................................................
Solution:
In the Books of...
PETTY CASH BOOK Telephone ~
Postage Repairs
... Total· conveyance
Cartage Stationery Expenses
Receipts I Date

~
I
\
(I)
.c
(.) 0
5Z
>
.
Particulars
Payments
t '{
'{ ~ r t t
'
2020
mooo Jan. To. Cash Ale
50 50
Jan. 2 By Conveyance Ale
250 250
2 By Cartage Ale 500
By PostageWc
500 600
Jan. 3 3
600
4 By WagesA/c
400
400
Jan. 4 5 By Stationery Ale
200 200
6 By Conveyance Ale
1,500
7 By Repairs Ale 1,500
Jan. 5
By Conveyance Ale .:. ~ 100 100
8
By Cartage Ale 400 400
9
By Postage Ne 700 700
Jan. 6 10
Jan. 6 11 By~ Conveyance Ale 300 300
i~

Jan. 6 12 By Cartage Ne 300 300

..-·-:•
Jan. 6 __..,13 By Telephone Expenses Ne 200 200
5,500 650 950 400 1,200 1,500 200 600
Jan. 6 By Balance cld 4,500
10,000 10,000
4,500 Jan. 7 To Balance bid
5,500 Jan. 7 To Cash Ale

Note: Expenses occurring occasionally are entered in the sundries column and
thereafter in the correct account. On 7th January, the Petty Cashier
gets~ 5,500 so that Petty Cash Book balance is'{ 10,000 again.
Special Purpose Books 1
-Cas h Book
10.31
Posting the Petty Cash B
ook
Entri es in the Petty C h
speci fied perio d · as Book are post d · of the
' i.e., rnont h or qua t e in the ledger accounts at the end . d
•
a mem oran d urn bo0 k • T he petty r er as th e case Is. Petty Cash Book is cons1dere as
,
to ledger accounts.
A Pett~ Cash Acco unt is rnain tai exp~nses are not directly posted
\Vhe n Petty Cash is adv ned In the ledger.
di 'd f anced to the ttY cashie .
ere t SI e o Cash Book as "B p pe r, the Chief Cashier records it on the
period (say a week,
a fortn ight or a mont h) fort : etty Cash Ale". At the end of specified
indiv idual petty expe n;es de tot~tm _expenses paid a Journal entry is passed by debiting
an credi g t O p etty Cash Account. All the accounts relati·ng
to petty expe nses are ma· t . .
th is made on the debit
side of these accou nts b m ~~ed ,m e ledger individually. Posting
Y wntm g To Petty Cash Ale" in the Particulars Column.
)
(a Wh en amou nt is adv d
ance ta the Petty Cashier:
Petty Cash Ale ... Dr.
To Cash Ale
(b) On subm issio n of Petty Cash Account by the Petty da,shikr:
Expe nses Ale ... Dr. ~
To Petty Cash Ale
durin g the
(Eac h expe nse is debit ed separ ately with the expenditure incur red
perio d as show n by the Petty Cash Book.)
ate Ledg er
Thus , in the Ledg er, there is a Petty Cash Account as well as separ
Acco unt for each expen se. ,
be as follows:
_In Illus tratio n 12, the Journ al entry and the·relev ant accounts will
Date Particulars L.F. Dr. m Cr.~

.. .Dr. 650
2020 Conveyance Ale 950
... Dr.
Jan.6 Cartage Ale ... Dr. 400
Stationery Ale ... Dr. 1,200
Postage Ale ... Dr. 1,500
Repairs Ale ... Dr. 200
Telephone Expenses Ale ... Dr. 600
Wages Ale 5,500
To Petty Cas_h A/fcth Petty Cash Book for the week ended 6th January)
(Being the analysis o e .
. will be passe d as follows:
. d) £ cash given to the Petty Cash ier z
J ourn al entry (1f requ ire or D 10 000
Petty Cash Ale ... r. '
Z 10,00 0
To Cash Ale
In the Books of ...
Ledger
CONVEYANCE ACCOUNT Cr.
Dr. Particulars J.F.
Date
J.F.
Date Particulars
2020 650
Jan. 6 To Pettv Cash Ale
 -
POSTAGE ACCOUNT
J.F. f Date Particulars

1,200

REPAIRS ACCOUNT
J.F. ~ Date Particulars J.F.

6 To Petty Cash Ale 1,500

TELEPHONE EXPENSES ACCOUNT

J.F. ~ Date Particulars J.F.

6 To Pelty Cash Ale 200

Dr. WAGES ACCOUNT

Dall J.F. ~ Date Particulars J.F.
2112D
6 To Petty Cash Ale 600

Or. PETTY CASH ACCOUNT

Patticulars J.F. t
_, Date
2020
Particulars

Jan. To Cash/>Jc 10,000 Jan. 6 By Conveyance Ale

Jan. 6 By Cartage Ale
Jan. 6 By Stationery A/c
Jan. 6 By Postage Ale
Jan. 6 By Repairs Ale
Jan
Jan.
Jin.
I
• ---
6 By Tellptw