Single column cash book
The single column cash book is a cash book that is used to record only cash transactions of a business. It is very identical to a traditional cash account in which all cash receipts are recorded on left hand (debit) side and all cash payments are recorded on right hand (credit) side in a chronological order.
The single column cash book has only one money column on both debit and credit sides titled as “amount” which is periodically totaled and balanced like a T-account. As stated earlier, a single column cash book records only cash related transactions. The entries relating to checks issued, checks received, purchases discount, and sales discount are not recorded in single column cash book.
While writing a single column cash book the following points should be kept in mind:
1. The pages of the cash book are vertically divided into two equal parts. The left-hand side is for recording receipts and the right-hand side is for recording payments.
2. Being the cash book with the balance brought forward from the preceding period or with what we start. It appears at the top of the left side as “To Balance” or “To Capital” in case of a new business.
3. Record the transactions in order of date.
4. If any amount of cash is received on an account, the name of that account is entered in the particular's column by the word “To” on the left-hand side of the cash book.
5. If any amount is paid on account, the name of the account is written in the particular's column by the word “By” on the right hand side of the cash book.
6. It should be balanced at the end of a given period.
Balancing the Cash Book:
The Cash Book is balanced in the same way as a ledger account. A Single Column Cash Book always shows debit balance (Debit side exceeding credit side) because more cash cannot be paid than what we have. To verify the accuracy of the Cash Book, it should be balanced daily (which may be shown in the Cash Book with red pencil). The balance as per the Cash Book must tally with the actual cash in the cash box. At the end of the period the Cash Book is finally balanced (showing debit balance) and the balance is put on the credit side for the purpose of closing the cash book. This balance will be transferred on the debit side of the Cash Book as opening balance of the next period.
Format of Single Column Cash Book:
In this Post we have learnt regarding Single Column Cash book. Soon will come with another topic.