cashbook

A cashbook is a type of accounting ledger that records all cash receipts and cash payments made by a business or individual. It serves as a primary record for tracking cash flow, detailing the movement of money in and out of an entity. The cashbook typically lists transactions chronologically, with columns for the date, a description of the transaction, the amount received, and the amount paid. Some cashbooks may also include a balance column, which is updated after each transaction to show the running total of cash on hand.

The purpose of a cashbook is to provide a clear and organized summary of cash transactions, enabling users to monitor their financial standing and identify any discrepancies. It is a fundamental tool for small businesses, sole traders, and individuals who wish to manage their finances effectively. By separating cash transactions from other accounting entries, the cashbook simplifies the process of identifying how much cash is available at any given time. It is often used in conjunction with other accounting records, such as invoices and bank statements, to ensure accuracy and completeness of financial information. Reconciliation of the cashbook with bank statements is a common practice to verify the accuracy of recorded transactions and identify any errors or omissions.