2.3 Cash Books

• Meaning and purpose of a cash book in financial management
• The cash book and the rules of double entry
• Types of cash books: single column, double column and three column cash books
• Trade discount and cash discount in the cash book
• Contra entries between the cash and bank columns
• Balancing off the cash book
• The petty cash book and the imprest system
• The analysed petty cash book
• Meaning and purpose of a bank reconciliation statement
• Preparing a bank reconciliation statement to harmonise cash and bank transactions

• analyse the purpose of a cash book for financial management
• examine the types of cash books as used in bookkeeping
• prepare cash books for financial management
• assess the purpose of a bank reconciliation statement for financial management
• prepare a bank reconciliation statement to harmonise cash and bank transactions
• embrace the importance of cash book in financial management

“Why is a cash book important in bookkeeping?”

“How is a bank reconciliation statement prepared?”

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1. The cash book and its purpose
   40 min · 1 practice tasks · quiz
   Introduce the cash book, its meaning and its purpose in financial management.
2. The cash book and the double entry system
   40 min · 1 practice tasks · quiz
   Apply the rules of double entry to the cash book.
3. The single column cash book
   40 min · 1 practice tasks · quiz
   Prepare a single column cash book for cash receipts and payments.
4. The double column cash book
   40 min · 1 practice tasks · quiz
   Prepare a double column cash book with cash and bank columns.
5. The three column cash book
   40 min · 1 practice tasks · quiz
   Prepare a three column cash book with discount, cash and bank columns.
6. Trade discount and cash discount
   40 min · 1 practice tasks · quiz
   Distinguish trade discount from cash discount and record cash discount.
7. Contra entries between cash and bank
   40 min · 1 practice tasks · quiz
   Record contra entries when cash moves between the cash box and the bank.
8. Recording transactions and posting to the ledger
   40 min · 1 practice tasks · quiz
   Record business transactions in the cash book and post them to the ledger.
9. Balancing off the cash book
   40 min · 1 practice tasks · quiz
   Balance off the cash book at the end of a period.
10. A debit balance and an overdraft
    40 min · 1 practice tasks · quiz
    Interpret a debit and a credit balance in the bank column.
11. The petty cash book and the imprest system
    40 min · 1 practice tasks · quiz
    Keep a petty cash book using the imprest system.
12. The analysed petty cash book
    40 min · 1 practice tasks · quiz
    Record small payments in an analysed petty cash book.
13. The bank reconciliation statement and its purpose
    40 min · 1 practice tasks · quiz
    Explain the purpose of a bank reconciliation statement.
14. Items that cause a difference
    40 min · 1 practice tasks · quiz
    Identify the items that cause a difference between the cash book and the bank statement.
15. Preparing a bank reconciliation statement
    40 min · 1 practice tasks · quiz
    Prepare a bank reconciliation statement to harmonise the records.
16. The importance of the cash book in financial management
    40 min · 1 practice tasks · quiz
    Appreciate the importance of the cash book and guard against errors and fraud.