Cash book extract

The above is an extract of a cash book from an excel format. This is a simple copy highlighting the transactions that normally happen in the cash book. Just to clarify some items, let us start with the columns:

1. there are are seven columns in this extract. The date, description, Dr and Cr columns are all mandatory while the rest (Check no, Payee and running balance) are optional.
2. the cash book has to be titled by the company name and be indicated as a cash book ( see the first two lines)
3. the date is the transaction date, payee is the name of the person paid or issued the check. Take for example line number four of the cash book. ABC ltd purchased three blackberry phones each @$300 from Amazon Ltd. ABC ltd bought the phones on 7th February and issued the check in the name of Amazon Ltd of $900
4. The running balance represents the amount outstanding on a particular date. On 28th of February the closing balance was  $ 33,827 while on 2nd February the account had a balance of 40,500 

Cash Book

What is a cash book?
It can be simply defined as a book where all money transactions are recorded. Money transactions will include cash in as a result of a cash sale,deposit received, rent income etc or cash out like cash purchases, rent expenses, all bills payments etc.

The cash book has two sides i.e the debit (Dr) and the credit (Cr) side and this is where the cash in and cash out is recorded respectively. In each side there are different columns but a standard simple cash book will have four columns in each side. The columns are:

1. Date: it records the date of the transaction. Each transaction is to be dated and the date corresponds with the document/voucher.
2. Folio: This is the reference number to which payment or receipt is made for. For example if  we are paying against invoice, then the folio number should be the check number we are using to pay.
3. Description: this gives a brief phrase what the transaction is all about. Take for example we are receiving some cash out of a sale, then the description should be " cash sale"
4. Amount: the last column is the amount column where amount of the transaction is posted. this is in the form of the local currency e.g. $  

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