Glossary
Cash book
A book that records money received and paid through cash and the bank.
What it means
A book of prime entry that records all receipts and payments of cash and cheques; it doubles as a ledger account for cash and bank.
Example
A three-column cash book also records discounts allowed and received.
Why it matters
It is central to tracking liquidity and to bank reconciliation.
In practice
The cash book is both a book of prime entry and a ledger account. It replaces the cash and bank accounts in the ledger. It is often written in columns, with a cash column and a bank column on each side. Receipts go on the debit side and payments on the credit side. A cash book may also have discount columns, kept as memorandum totals for discount allowed and discount received.
For example, a customer pays RM950 after being allowed RM50 discount. Enter RM950 in the debit bank column and note RM50 in the discount allowed column.
Students often confuse the cash book with the petty cash book. The cash book handles the main flows of money, especially through the bank. Petty cash covers small items such as stamps and refreshments that would clutter the main cash book.
If three-column cash books slow you down, one of our teachers can practise them with you using past-paper data. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 2.3 Books of prime entry (page 12).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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