Distinction between a Cash Book and Cash Account:
In fact, Cash Book is an alternate for a Cash Account. A cash book is also known as the book of original entry. A cash account is a ledger account used for recording day to day cash transactions of business.
Yet there are some dissimilarities between the two, which are given below:
Cash Book
- It is a detach book in which cash transactions are directly recorded.
- It serves the purpose of both journal and ledger and hence cash transactions need not be primarily recorded in Journal.
- Narration is required.
- Cash book records ail entries related to cash directly as it is also a book of original entry.
- A column for Ledger Folio is provided. Cash book contains columns for ‘L.F.’ in which page numbers of ledgers are recorded.
Cash Account
- It is an account in a Ledger in which posting is made from journal.
- It serves the purpose of a Ledger only. If Cash A/C is opened in the Ledger, all cash transactions are first recorded in journal.
- Narration is not required
- Entries in the cash account are recorded from the journal, the book of original entry.
- A column for Journal Folio is provided. Cash account contains columns for ‘J.F.’ in which page numbers of journal are recorded.
