The accounting process for recording information consists of two steps, actually a diary and a release. Therefore, each company must maintain journals [original or primary introductory books] and ledgers [primary books]. Therefore, the bookkeeping system initially envisaged that all transactions must first be recorded in the original record book, the journal, and then each transaction recorded in the journal should be posted in the main book [ie, the ledger]. Subsequent to the work of recording each transaction in the journal, and then posting each entry in two different accounts in the ledger is a lot of work. This procedure is more time consuming and involves higher facility costs.
Naturally, in every business, most transactions refer to cash receipts and payments; purchase of goods; sales of goods. It is convenient and economical to find a separate book to record each type of specific transaction. Each individual book used to record a particular category of trade is a book of original or primary entries. It is also known as a sub-journal or sub-book. A system for entering transactions of a similar nature in a related subsidiary book and writing a ledger on this basis is called "' Practical Bookkeeping System' This system reduces the labor and time of recording transactions, such as non-personal Accounts, ie sales accounts, purchase accounts, etc., receive totals instead of individual transactions. However, the system also complies with the basic rules of a dual entry system.
Typically, the following affiliate books are used in the business:
[1] Cash book: record cash receipts and payments, including transactions related to banks;
[2] Purchase book: record the credit purchase of the purchased goods or converted into finished products;
[3] Return to the book: Record the return of the goods to the supplier for a variety of reasons;
[4] Sales account book: record the credit sales of goods transactions in the business;
[5] Return within the order: record the customer's return to the business; [vi] the bill of receivables: record the bill of exchange, the promissory note and the company's receipt;
[6] Accounts payable bills: record the exchange of bills, promissory notes and notes to the parties:
Advantages of sub-journals
[1] Save time by: [a] enabling the recording process to be performed simultaneously in different affiliate books; [b] by publishing periodic totals in non-personal accounts.
[2] It provides information about each specific transaction category.
[3] When preparing the trial balance, the inspection is easier because there are many books and different people can finish the work.
Cash book
In any business, sometimes, the largest number of transactions of a nature must involve cash and banks. This is so because every transaction must result in a huge cash transaction. Now, if you want to record each cash transaction in a journal, each transaction will be credited to the estimated amount of labor in the cash or bank account in the ledger. Therefore, there is a separate book, the cash book, that makes it easy to record these transactions. Maintaining a cash book does not require depositing cash and bank accounts in the ledger. This book allows us to keep abreast of the cash balances at hand and at the bank.
The cash book includes cash and bank accounts that are taken from the ledger and maintained separately; then it is the ledger of cash and bank accounts. It is also an original primer because cash and bank transactions are not recorded in any other affiliate.
Type of cash book
The type of cash book used by any business depends on its nature and requirements. It could be any of the following:
[1] Single column cash book [cash column].
[2] Double column cash book [cash and discount bar].
[3] Three-column cash book [cash, discount and bank].
[4] Bank cash book [bank and discount bar].
Typically, each business will use any of the above types of cash books and a "small cash book" based on memo maintenance.
The difference between a cash account and a cash book
In fact, a cash account is a perfect substitute for a cash account. In both cases, cash transactions are recorded in date order. Cash balances for any date can be determined by balancing on any desired date. However, there are some differences between the two, as follows:
Cash account
1. Is the account in the ledger.
The cash account is part of the ledger. The cash account opens in the ledger, where the posting is done from some of the original entries [ie journals]
Not stated in the cash account release.
It only records one aspect of transactions involving cash and banks.
Cash book
1. A separate accounting book is part of the accounting system.
2. The cash book records entries directly from the transaction, which does not require a primary entry.
There is also a description after the cash book entry.
It records all aspects of the transaction in cash and in the bank to complete double registration.
Orignal From: Accounting sub-journals and cash books
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