Cash Book > Simple Cash Book (Single Column Cash Book)

A simple cash book is a special accounting book that records only cash transactions (cash receipts and cash payments) of an organization, acting both as a journal and a ledger for these entries.

                                                            In the books of _________
Dr.                                                              Simple Cash Book                                                      Cr.

Contents

• Date:
  Records the day, month, and year of each cash transaction. Entries are always made in chronological order.

• Particulars:
  Describes each transaction. This column notes the source or use of cash for easy reference.

• Voucher/Reference Number:
  A supporting document or reference number for verification, enhancing the audit trail and transaction tracking.

• Ledger Folio Number:
  Provides the page number for cross-referencing the corresponding ledger account, ensuring connections between the cash book and the main ledger.

• Amount (₹):
  Shows the value of cash received (on the debit/receipt side) or cash paid out (on the credit/payment side) for each transaction.

Basic Rules

• Debit what comes in (receipts).

• Credit what goes out (payments).

• Only CASH transactions are entered (no cheques, bank transfers, or credit allowed).

List of transactions to prepare a simple cash book in the books of ABC Enterprises for March - May 2025:

• Mar 1: Cash in hand—₹2,500
• Mar 5: Cash paid to Suresh—₹1,000
• Mar 7: Cash Purchases—₹500
• Mar 14: Cash received from Prakash—₹1,000
• Mar 16: Cash Sales—₹800
• Mar 20: Paid Carriage—₹100 
• April 3: Deposited cash into bank—₹1,000
• April 22: Sold old furniture—₹5,000
• May 8: Invested in Shares—₹5,000
• May 12: Paid Life Insurance Premium—₹8,000
• May 16: Received Dividend—₹20,000
• May 20: Paid Telephone Bill—₹6,000
• May 22: Received Interest—₹11,000
• May 25: Cash Sales, ₹25,000 at 20% Trade Discount
• May 30: Paid Insurance Premium—₹8,000

                                                                                                        In the books of ABC Enterprises
Dr.                                                                                                              Simple Cash Book                                                                                                     Cr.

Working Notes:

1. Cash sales on 25.05.2025

         Sale Value = ₹25,000, Trade Discount = 20%

         Cash Received = 25,000 - (20% of 25,000)

                                  = 25,000 - 5,000

                                  = 20,000

Note: Transactions dated 12th and 30th May, 2025

Both are insurance premiums, so how can one decide which account to debit (Drawings/Insurance Premium)?

Key Logic:

• If the premium is for protecting the business or its assets, use the Insurance Premium Account.
• If it’s for the personal/private benefit of the owner (proprietor or family), use the Drawings Account.

• A simple cash book records only cash receipts and payments for a business, providing an organized, chronological, and up-to-date record of cash transactions.
• It has two sides (debit for receipts, credit for payments), with key columns: Date, Particulars, Voucher/Reference Number, Ledger Folio, and Amount.
• Only actual cash movements are recorded—cheques, credits, and non-cash items are excluded.