Define Cash book.
Cash book is a book of original entry in which all the transactions relating to cash receipts and payments are recorded in chronological order. Cash receipt is entered on the debit side and cash payment is recorded on credit side of the cash book. There are three types of cash book:
-Single Column Cash Book : This record only cash receipts and payments. It has only one money column on debit and credit side. Cash received is entered on the debit side and cash payments are entered on the credit side.
-Double/ Two Column Cash Book: This type of Cash book has two columns of cash and discount on both the debit and credit side.
-Three Column Cash Book : This cash book has three columns of cash, bank and discount on both the debit and credit side.
At the end of specified period the cash book is balanced. Excess of debit balance is posted on credit side as “By balance c/d” to balance both the sides. From the start of the next period the balance on the credit side is brought down on the debit side by “To balance b/d”