Cash book: single column, double column and petty cash

The cash book is a journal and a ledger account at once. Record cash here and you need neither a journal entry nor a separate Cash A/c.

Why a cash book

Cash transactions are the most frequent in any business. Journalising each one and then posting it would double the work. So cash receipts and payments are recorded directly in a special book, the cash book. Receipts go on the debit (left) side and payments on the credit (right) side. Because it is written from vouchers it is a book of original entry; because it shows the cash balance it also serves as the Cash A/c in the ledger.

Single column cash book

It has one amount column on each side and records cash only. The balance is always a debit balance or nil: you cannot pay out more cash than you have.

Example. Prepare the cash book of Lakshmi Stores for June 2026: June 1 cash in hand ₹12,000; June 3 cash sales ₹9,000; June 7 paid wages ₹3,500; June 12 received from Dev ₹6,000; June 18 bought stationery ₹800; June 25 paid rent ₹5,000; June 29 cash sales ₹7,300.

Dr. Cash Book (single column) Cr.
Date	Particulars	₹	Date	Particulars	₹
Jun 1	To Balance b/d	12,000	Jun 7	By Wages A/c	3,500
Jun 3	To Sales A/c	9,000	Jun 18	By Stationery A/c	800
Jun 12	To Dev	6,000	Jun 25	By Rent A/c	5,000
Jun 29	To Sales A/c	7,300		By Balance c/d	25,000
		34,300			34,300

Cash in hand on 30 June is ₹25,000.

Double column cash book (cash and bank)

Most payments today go through the bank, so the cash book is given two amount columns on each side: Cash and Bank. Deposits and receipts by cheque or transfer go in the bank column on the debit side; payments by cheque or transfer go in the bank column on the credit side.

Contra entries

When cash is deposited into the bank, or withdrawn from the bank for office use, both sides of the entry fall inside the cash book. Such an entry is recorded on both sides and marked "C" (contra) in the folio column. It needs no posting to the ledger.

Cash deposited into bank: debit side, bank column "To Cash A/c (C)"; credit side, cash column "By Bank A/c (C)".
Cash withdrawn for office use: debit side, cash column "To Bank A/c (C)"; credit side, bank column "By Cash A/c (C)".

Solved example

Hari Traders, July 2026: July 1 cash ₹15,000, bank ₹40,000; July 4 deposited cash ₹8,000 into bank; July 8 received a cheque from Mona ₹12,000 and deposited it the same day; July 11 paid Suresh by cheque ₹9,500; July 15 withdrew ₹5,000 from bank for office use; July 20 cash sales ₹6,400; July 26 paid salaries in cash ₹7,000; July 30 bank charged ₹200.

Date	Receipts (Dr.)	Cash	Bank	Date	Payments (Cr.)	Cash	Bank
Jul 1	To Balance b/d	15,000	40,000	Jul 4	By Bank A/c (C)	8,000
Jul 4	To Cash A/c (C)		8,000	Jul 11	By Suresh		9,500
Jul 8	To Mona		12,000	Jul 15	By Cash A/c (C)		5,000
Jul 15	To Bank A/c (C)	5,000		Jul 26	By Salaries A/c	7,000
Jul 20	To Sales A/c	6,400		Jul 30	By Bank Charges A/c		200
				Jul 31	By Balance c/d	11,400	45,300
		26,400	60,000			26,400	60,000

Closing balances: cash ₹11,400 and bank ₹45,300. The bank column can show a credit balance when the business has overdrawn its account (an overdraft); the cash column never can.

Petty cash book and the imprest system

Small payments such as tea, postage, auto fare and cleaning are too many for the main cash book. They are handled by a petty cashier, who is given a fixed sum at the start of a period. At the end of the period the amount spent is given back to him, so that he starts the next period with the same fixed sum again. That fixed sum is the imprest, and the method is the imprest system.

The petty cash book is analytical: each payment is entered in the total column and again in a column for its kind of expense, so that monthly totals for each expense are ready for posting.

Example. Imprest ₹2,000 received on 1 August. Payments in the first week:

Date	Particulars	Total	Conveyance	Postage	Refreshment	Sundries
Aug 1	Auto fare	180	180
Aug 2	Courier	120		120
Aug 3	Tea and snacks for visitors	260			260
Aug 4	Cleaning material	150				150
Aug 5	Bus fare	90	90
Aug 6	Speed post	200		200
Aug 7	Tea	140			140
	Total spent	1,140	270	320	400	150

Balance with the petty cashier on 7 August = ₹2,000 − ₹1,140 = ₹860. The chief cashier now gives him ₹1,140, the amount spent, and the float is ₹2,000 again.

Advantages of the imprest system: the petty cashier can never hold more than the fixed sum, his book is checked each time he asks for reimbursement, and the main cash book is kept free of small items.

The bank column of the cash book rarely agrees with the bank's own statement. The reasons, and how to reconcile them, are on the bank reconciliation statement page.

Questions students ask

Why does a cash book always show a debit balance in the cash column?

Because payments cannot be more than the cash available. The total of the receipts side is always equal to or greater than the payments side.

What is a contra entry?

An entry that affects both the cash column and the bank column of the cash book, such as depositing cash into the bank. It is recorded on both sides and marked C.

What is the imprest system?

A system in which the petty cashier starts each period with a fixed sum and is reimbursed exactly what he spent, so the float returns to the fixed sum.