Generally cash transactions are numerous. What is credit transaction today will be cash transaction tomorrow. In other words, all credit transactions are finally settled by cash. If like all other transactions cash transactions are also recorded primarily in Journal. So the Cash book is the substitute for the Cash Account. In fact, no separate Cash account is opened in the ledger; cash book serves the purpose of the cash account.
The entries in cash book are regarded as one aspect of the double entry system; the other aspect is posted to the ledger in the concerned account. L.C. Cropper remarked "every entry in the cash book makes one half of a double entry; the other half of the double entry appears on the opposite side of some account in the Ledger." From this angle, 'Cash Book is a Ledger'.
On the other hand, all cash transactions are primarily recorded in the Cash Book in order of date and thereafter posted to the concerned ledger accounts. Judging from this angle, 'Cash Book is a Journal'. Thus we see that a Cash Book is the 'mixture of Journal and Ledger'. According to Spicer & Pegler, "The cash book is in fact a ledger version, but due to the huge amount of entries completed in that, it is reserved in a separate book, this is known as a cash book, which is used also as a book of principal entry."
The entries in cash book are regarded as one aspect of the double entry system; the other aspect is posted to the ledger in the concerned account. L.C. Cropper remarked "every entry in the cash book makes one half of a double entry; the other half of the double entry appears on the opposite side of some account in the Ledger." From this angle, 'Cash Book is a Ledger'.
On the other hand, all cash transactions are primarily recorded in the Cash Book in order of date and thereafter posted to the concerned ledger accounts. Judging from this angle, 'Cash Book is a Journal'. Thus we see that a Cash Book is the 'mixture of Journal and Ledger'. According to Spicer & Pegler, "The cash book is in fact a ledger version, but due to the huge amount of entries completed in that, it is reserved in a separate book, this is known as a cash book, which is used also as a book of principal entry."
