Cash book

The cash book is another name for the account in the accounting system which represents the bank. It is another example of a book of prime entry. The cash book also forms part of the double entry which also makes it part of the ledger accounts (unlike the daybooks).

Sometimes the cash book is used to record the details but remains a book of prime entry. In this case a bank account control account is used to summarise the totals in the ledger instead.

Uses of the Cash Book

Receipts

• Cash sales
• Trade receivables (customers)
• Loans from the bank
• VAT refunds
• Capital introduced by the owner

Payments

• Cash purchases
• Trade payables (suppliers)
• Expenses
• Bank loan repayments
• VAT payments
• Purchases of assets
• Drawings

Analysed cash book

Receipts

There are three types of receipts recorded in the cash book:

1. Receipts from cash sales
2. Receipts from trade receivables (customers who have bought from us on credit)
3. Receipts not related to sales (loans or bank interest etc.)

Payments

The are three types of payments recorded in the cash book:

1. Cash payments / purchases
2. Payments to trade payables (suppliers we have bought from on credit)
3. Other payments not related to purchases

Other sections

• Non-Current Assets
• Processing recurring receipts and payments
• How the cash book fits into the accounting system