Two-column Cash Book | concept and format

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Two column cash book represents the Cash and the Bank column in the cash book records the amount of the transaction in the respective columns. These two columns are on both the sections of cash book to record financial transactions. In accounting Cash book is a source to record, and track all the cash and bank-based financial transactions. In Cashbook there are two Sections Called Receipts (Debit), and payments (Credit). The treatment of both sections is as same as of Assets.

All the Cash and cheques received for the Sale of goods, recovery of debts, sale of Non-current assets, or for any service provided is recorded in the Receipt section. And all the Cash and Cheques paid for the purchase of goods, Payment of debts, Purchase of Non-current assets, or any other expense is recorded in the payment section of the cash book.

A cash book is a very important tool in the accounting cycle. It helps its users to have an accurate estimate of cash and Bank balance available and make business decisions accordingly.

Some examples are as under:

● Sold goods worth of Rs. 10,000 to Mr. Adeel, 4,000 paid in cash remaining by cheque.

● Purchased goods worth of Rs. 10,000 from Mr. Salman, 6,000 paid in cash remaining by cheque.

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