TARANJIT SINGH
PGT COMMERCE
JAWAHAR NAVODAYA VIDYALAYA KARNAL
Introduction
As size of the business grows and number of transactions increases, it becomes
necessary for the business to divide the recording work.
The books which are maintained for this purpose are called books of original entry,
because a business transaction is recorded for the fist time in these books.
These books are also called Subsidiary Books.
ADVANTAGES OF MAINTAINING SUBSIDIARY BOOKS
Division of work
Leads to Specialization
Easy to maintain Ledger
Check on frauds
Easy to fix responsibility
Quick availability of Required information.
Types of SUBSIDIARY BOOKS
Transactions | Further classification | Subsidiary Books Maintained
|
Cash & Bank Related Transactions | Only Cash Transactions | Simple Cash Book |
Cash & Bank Transactions | Double Column Cash book | |
Cash payment of small amount | Petty Cash Book | |
Transactions Other than Cash & Bank | Credit Sale | Sales Book |
Credit Purchases | Purchases Book | |
Sales Returns | Sales returns Book | |
Purchases Returns | Purchases Returns Book | |
Transactions of Bill receivable | Bill Receivable Book | |
Transactions of Bill Payable | Bill Payable Book | |
Any other transaction | Journal Proper |
Cash Book
Cash book shows all the transactions related to cash receipts and payments.
Cash book serves two purposes.
First, all the cash transactions are recorded first time in cash book
it becomes BOOK OF ORIGINAL ENTRY.
Second,
there is no need to prepare Cash a/c in ledger
it also play the role of Principal Book.
Simple Cash Book
All the cash receipts are shown in left hand side i.e. Debit side and all the cash
payments are shown in right hand side i.e. Credit side.
Points to Remember
Cash in hand/opening balance of cash is shown in Dr. side of the Cash book
as “to Bal b/d”.
Only transactions of cash receipts and payments are recorded in this book.
This book never show a credit balance because one can’t pay more than the
cash one have.
Format of a Simple Cash Book
Date | Particulars | L.F | Amount | Date | Particulars | L.F | Amount |
| | | | | | | |
| | | | | | | |
In the Books Of ……………
Dr Cash Book Cr
Double Column Cash Book
It is a cash book which has two columns on each side
to record cash receipts and payments and Bank transactions.
It has two columns, i.e., Cash and Bank on each side
Contra Entry
It means a transaction involving both cash and bank. Such transactions though recorded in the cash book are not posted into the ledger. In the
folio for ledger letter ‘C’ is written to indicate that it is a contra entry.
Format of a Double Column Cash Book
In the Books Of ……………
Dr Cash Book Cr
Date | Particulars | L.F | Cash | Bank | Date | Particulars | L.F | Cash | Bank |
| | | | | | | | | |
| | | | | | | | | |
Petty Cash Book
It is a cash book in which payments of small amounts are recorded.
Imprest System of Petty Cash Book
It is a system whereby an estimate of expenditure is made and the
estimated amount is given to the Petty Cashier. Thereafter, he submits
the statement of expenses at the end of the designated period,
which is reimbursed to him to make the petty cash equal to the original petty
cash amount.
THANKS A LOT