The Cash Book and Cash account are maintained for the same purpose i. e. recording all business cash transactions in the books of accounts, but there is a difference between Cash Book and Cash Account in the process of recording these transactions. In cash Book, all business cash transaction are recorded directly in it because it is an original entry book(Subsidiary Book) but in cash book also recorded all business cash transaction but firstly it is recorded in the journal then these are transferred to the cash account. The cash account is the part of the leader while the cash book is the original entry book.
Meaning of Cash Book: –
In Cashbook, we will record the all-cash transaction (Cash Payment and Cash receipts even bank transactions) of the business for the particular accounting period. It is the book of original entries. All transaction recorded directly in the cash book after that these are posted to related ledger accounts. Cashbook is similar to cash accounts but where the number of daily transactions is more than businesses preferred to maintain the cash book instead of the cash account.
There are four types of cash books: –
- Single Column Cash Book: – It is just like a cash account or like a simple ledger account only difference is it has a column of ledger folio instead of Journal folio.
- Double Column Cash Book:- It has one column extra as compared with a single column cash book that column is bank column or discount column.
- Triple Column Cash Book: – It has two columns extra as compared with a single column cash book that column is bank column and discount column.
- Petty Cashbook Cash Book:- It is prepared in the larger entity where the head cashier and petty cashier are working. the head cashier provides some money on a daily, weekly, or monthly basis to the petty cashier to make payment for the routine petty expenses.
Meaning of Cash Account: –
The cash account is the ledger account. All-day to day cash transactions of the business are recorded in the cash account. A cash account has two sides like every ledger account i.e. debit side and credit side. On the Debit side, we record all the cash receipts of the business and on the credit side, we record all the payments made by the business in the particular accounting period.
Chart of Difference Between Cash Book and Cash Account: –
Basis of Difference |
Cash Book |
Cash Account |
Meaning |
Cash Book is a separate book in which cash transactions are directly recorded. | A Cash Account is an account in a Ledger in which posting is made from the journal. |
Purpose |
It serves the purpose of both journal and ledger and hence cash transactions need not be primarily recorded in Journal. | It serves the purpose of a Ledger only. If Cash A/C is opened in the Ledger, all-cash transactions are first recorded in the journal. |
Dependency |
The cash book is not dependent on any other book because it is the original entry book. | The cash account is dependent on the journal daybook. |
| Types | There are three types of cash books | There only a single type of cash account as similar to any ledger account. |
| Balances represent | It represents Four types of balances
|
It represents only the Cash balance. |
| Folio | It has a Ledger folio which represents the page no of the ledger account where the transaction posted in the related Ledger account. | It has a Journal folio which represents page no of Journal Book from where the transaction is posted in this account. |
| Recording | The cash transactions are directly recorded in the cash book. | The cash transactions are first recorded in the journal book and then posted in the cash account. |
| Narration | Yes, Cashbook has a narration. | No, the Cash account does not have narrations. |
Download the chart: –
If you want to download the chart please download the following image and PDF file:-
Conclusion: –
In every business, cash plays a very important role in running out smoothly, whether it is small or large. So, in every business cash is recorded on a daily basis it may be in the cash book or in a cash account but proper records of every cash transaction are maintained.
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