Types of Cash Book with Diagrams and Examples

Types of Cash Book with Diagrams and ExamplesGenerally cash book is of two types – general cash book and petty cash book.

General cash book is again subdivided in three. Single column cash book, double column cash book and treble column cash book.

Types of Cash Book with Diagrams and Examples

Below three types of general cash books are detailed.

Double Column Cash Book

The cash book containing, two money columns – cash column and bank column in both sides for recording cash and bank transactions, is called double column cash book. All cash receipts and all bank deposits are recorded in the debit side and all cash payments and all payments through cheques are recorded in the credit side of this cash book.

Types of Cash Book with Diagrams and Examples

Cash receipts are recorded in cash column of debit side and cash payments are recorded in cash column of credit side. Cash and cheques, deposited in the bank, are recorded in the bank column of debit side and payment by cheques are recorded in bank column of credit side.

The debit balance of double column cash book indicates cash in hand and cash at bank of a particular date of a concern. There might be credit balance of bank column which indicates bank overdraft or excess withdrawn over deposits.

Method of Preparing Double Column Cash Book

The method of preparing double column cash book is almost similar to that of single column cash book. Double column cash book system has been introduced to avoid complexity in posting bank transactions in single column cash book.

Here all bank transactions are directly recorded in bank columns. At the time of preparing double column cash book it is to be kept in mind that all types of cash receipts are to be recorded in the cash column of debit side and all bank deposits are to be recorded in the bank column of debit side.

On the other hand cash payments are recorded in the cash column of credit side and payments through cheques are recorded on the debit side.

Treble Column Cash Book

The cash book containing three money columns in both sides is called treble column cash book. The columns are ‘Cash’, ‘Bank’ and ‘Discount. In a treble column cash book there are three money columns in both sides for recording transactions relating to cash, bank and discount.

Types of Cash Book with Diagrams and Examples

Like double column cash book cash receipts and bank deposit are recorded in the debit cash column and bank column respectively of the treble column cash book and cash payments and payment by cheque are recorded in the credit cash column and bank column respectively.

The discount allowed to customer for realizing debts, is recorded in the debit discount column of treble column cash book and discount received from suppliers or creditors in making payment is recorded in credit discount column of the treble column cash book.

In preparing treble column cash book it is to be carefully noted that discount columns need not be balanced. The total of debit discount column and the total credit discount column are treated as separate balances.

The total of debit discount column means expense and the total of credit discount column means income.

Advantages of Treble Column Cash Book

The advantages of treble column cash book are stated below,

  • Time and labor saving A good deal of time and labor is saved because for maintaining treble column cash book cash account, bank account and discount accounts are not needed to be prepared in the ledger.
  • Knowing cash and bank balance Cash and bank balances can easily be ascertained whenever needed from treble column cash book.
  • Knowing discount income and discount expense the amount of discount income and discount expenses can easily be known from the total of credit discount column and debit discount column of treble column cash book