Difference Between Cash Book and Cash Account: –
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 in the process of recording of 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 its recorded in the journal then these are transferred to the cash account. The cash account is the part of leader while cash book is the original entry book.
In Cash book, 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. Cash book 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 is four type 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 single column cash book that column is bank column or discount column.
- Triple Column Cash Book: – It has two column extra as compared with single column cash book that column is bank column and discount column.
- Petty Cashbook Cash Book:- It is prepared in the larger entity where head cashier and petty cashier are working. head cashier provide some money on the daily, weekly or monthly basis to the petty cashier to make payment for the routine petty expenses.
The cash account is the ledger account. All day to day cash transactions of the business is recorded in the cash account. 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 payment made by the business in the particular accounting period.
Basis of Difference
|Cash Book is a separate book in which cash transactions are directly recorded.||Cash Account is an account in a Ledger in which posting is made from the journal.|
|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.|
|The cash book is not dependent on any other book because it is original entry book.||The cash account is dependent on journal day book.|
|Types||There are three type of cash books||There only a single type of cash account as similar to any ledger account.|
|Balances represent||It represents Four type of balances
||It represents only Cash balance.|
|Folio||It has Ledger folio which represents the page no of ledger account where the transaction posted in the related Ledger account.||It has Journal folio which represents the 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 after posted in the cash account.|
|Narration||Yes, Cashbook has a narration.||No, Cash account does not have narrations.|
In every business, cash plays a very important role in running out it smoothly, whether it is small or large. So, in every business cash is recorded on daily basis it may be in cash book or in cash account but proper records of every cash transaction are maintained.