If someone ask you whether the Cash book is a book of original entry- what would you say - yes or no?
The answer is Yes: Cash Book serves also as a book of original entry when information from source documents is recorded STRAIGHT/DIRECTLY into the Cash Book WITHOUT going through the journal ( the book of original entry). Why is this so? This may be attributed to the fact that the Cash Account and the Bank Account contain the largest number of entries/transaction compared to other ledger accounts hence it is specifically taken out of the ledger and recorded in another book called the Cash Book
Next, what are those source document for entries in the Cash book?
They are:
- RECEIPTS that acknowledge the receipt of cash or cheque;
- CASH TILL SLIPS as record for cash received from sales;
- PAYING-IN-SLIP used as evidence for cash/cheque deposited into the bank;
- PAYMENT VOUCHERS to authorise payments by cash or cheque and
- CHEQUE COUNTERFOLS as recrd of payments by cheques.
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