Single column cash book
What is a Single Column Cash book?
The single column cash book resembles a T shaped cash account in almost all respects. The pages of this book are vertically divided into two equal parts. The receipts being entered on the left (debit) side and payments on the right (credit) side. It has only one money column on debit and credit sides to record cash transactions, that is why it is called simple or single column cash book.
It records only cash receipts and payments. This form of cash book has only one amount column on each of the debit and credit sides of the cash book. All the cash receipts are entered on the debit side and cash payments are entered on the credit side. A single column cash book is nothing but a cash account. A cash account cannot show a credit balance on the principle you cannot pay what you do not have. This means cash account always shows a debit balance or nil balance.
Format of single column cash book
The standard format of a single column cash book is shown below:
Functions of different columns of a single column cash book
The format given above has five columns on both sides. The purpose/function of each column is briefly described below:
(1). Date column: The year month and day of the receipts and payments of cash are written in the date column on debit and credit side of cash book. There is no need to repeat year and month for the additional entries until a new month starts or a new page is needed.
(2). Description column: The description column starts with the words “balance brought down” or just “balance”. It denotes the cash balance at the start of the current period. After recording the opening balance in description column, the cash transactions of the current period are recorded.
When cash is received on an account, the name of that account is written on the debit side and when cash is paid on an account, the name of that account is written on the credit side in the description column of the cash book.
(3). Voucher number: Forever entry recorded in the cash book there must be a proper voucher. When money is received, a receipt in original is given to the payer and a copy of it is retained by the payee. This receipt is called debit voucher because it supports the entries on the debit side of the cash book. When a payment is made, an original receipt is obtained from the payee, this receipt is called credit voucher because it supports entries on the credit side of the cash book. The serial number of debit voucher is recorded on the debit side and serial number of credit voucher is recorded on credit side in voucher number (V. No.) column of the cash book.
(4). Posting reference: When entries from cash book are posted to ledger accounts, the relevant account number is written in this column.
(5). Amount column: Amount column is used to enter the amount received or paid as a result of a cash transaction.
Balancing the cash book
At the end of the day or at the end of the period concerned, the amount columns on both sides are totaled. The total of the cash column on the debit side will always be greater than the total of the credit side because we cannot pay more cash than what we have received. The difference represents the actual cash in hand and that should tally with the amount of cash in cash box. The difference is written on the credit side as “balance carried down” or just “balance” to make the two sides of single column cash book equal.
Posting the single column cash book to ledger
The following points should be kept in mind while posting the single column cash book to the relevant accounts in ledger:
- The opening and closing balances of cash book are not posted.
- The items appearing on the debit side of the cash book are posted to the credit sides of the accounts in ledger and respective account numbers are entered in the posting reference column of the cash book.
- The items appearing on the credit side of the cash book are posted on the debit sides of the accounts in ledger and respective account numbers are entered in the posting reference column of the cash book.
Record the following transactions in a single column cash book and post into ledger:
Sep. 01: Cash in hand (balance b/d) $2,327.
Sep. 02: Paid salaries for the month of August $1,500.
Sep. 05: Cash received from S & Co. $1,360.
Sep. 06: Purchased merchandise for cash $ 700.
Sep. 07: Cash sales for the first week $2,350.
Sep. 10: Paid cash for office furniture $1,540.
Sep. 12: Purchased stationary for cash $85.
Sep. 15: Cash sales for the second week $4,500.
Sep. 17: Cash paid to A & Co. $890.
Sep. 20: Purchased merchandise for cash $1,230.
Sep. 21: Cash sales for the third week $1,200.
Sep. 24: Cash received from S & Co. $1,200.
Sep. 28: Paid office rent $800.
Sep. 30: Cash sales for the last week $3,600