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Saturday, September 1, 2018

Business Studies Class: Simple Cash Book




Learning Objectives:

I am learning about Cash Book as one of the books of account; its use and practical bookkeeping application.

Lesson Outlines:

1.       Meaning & Description
2.       Cash Book Format
3.       Practical Application

Meaning & Description

Cash Book otherwise called Cash Journal is one of the subsidiary books, used for recording all cash transaction in business.

Cash Book is of dual purposes: It is used as a Journal as well as a Ledger Account. As a Journal, it is called Cash Book/Journal; as a Ledger, it is called Cash Account.

Every transaction in business that involves immediate cash flows must be recorded in the Cash Book.


Cash Book Format

Cash Book
Dr.                                                                                                                            Cr.
Date
Particulars
Folio
Amount
Date
Particulars
Folio
Amount










Practical Application

Illustration 1
Enter the following g transactions in the Cash Book of Divine-Favour Ventures for the month of May 2018:                                                                                     N

May 1: Started business with cash                                           8400
May 4: Bought goods for cash                                                  2150
May 6: Paid for wages                                                               1000
May 9: Sold goods for cash                                                       3820
May 12: Purchased goods by cash                                            1650
May 19: Received cash from Destiny                                         910
May 20: Sold goods for cash                                                      2240
May 28: Paid Olivia by cash                                                        700
May 30: Paid rent for cash                                                         1600

Divine-Favour Cash Book May 2018

Dr.                                                                                                                   Cr.
Date
Particulars
Folio
Amount
Date
Particulars
Folio
Amount
May 1
Capital
GL1
8400
May 4
Purchases
GL2
2150
May 9
Sales
GL4
3820
May 6
Wages
GL3
1000
May 19
Destiny
PL1
910
May 12
Purchases
GL2
1650
May 20
Sales
GL4
2240
May 28
Olivia
PL2
700




May 30
Rent
GL5
1600




May 31
Balance
c/d
8270



15370



15370
June 1
Balance
b/d
8270





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