JSS2 Business Studies Lesson Note on Cash Book

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CASH BOOK     

PREVIEW

• Meaning of Cash Book
• Types of Cash Book: Single Column cash book, Double Column Cash Book.
• Items on a column cash book: Cash column, Bank Column and discount column
• Preparation of Cash Book

Meaning of Cash Book

A Cash book is a book of account for recording cash receipts and cash payments. A Cash Book is one of the most important books of account. It is used only for recording cash transaction.  A cash book, apart from the ledger is also a book of original entry.

Rules for Making Entries in the Cash Book

When making entries in the cash book, the following rules should be followed:

1. Enter all cash received on the debit side of the cash book.
2. Enter all cash paid out on the credit side of the cash book.
3. Enter the name of the receiver and the payer in the particular’s column

Types of Cash Book

There are three types of Cash Book

1. Single Column Cash Book
2. Double Column Cash Book
3. Three-Column Cash Book

We shall discuss each of these in detail:

Single Column Cash Book

The single Column Cash Book is drawn as follows: The single cash book has only a single column on the debit side for cash receipts and another on the credit side for cash payments.

The format of a single cash book;

Dr                                                                                                                                            Cr

Date	Particulars	Folio	Amount	Date	Particulars	Folio	Amount

It can be seen that Cash Book is divided into two equal parts, namely:  the Debit side and the Credit side.

An Example is given below:

Mr. Akubo commenced business as a petty trade in Lagos, on 1^st of March, 2011 with N8000 in cash.  During the month, the following transactions took place:                                                                                                                                                                                              N

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