Question 1

Briefly state how the cash book is both journal and a ledger.


Cash Book plays dual role as a book of original entry (or primary entry) as well as a ledger. It is a subsidiary book because all cash transactions are first recorded in the cash book and then from the cash book posted to various accounts in the ledger.

The Cash Book is also a ledger in the sense that it serves the purpose of a Cash A/c also. When a Cash Book is prepared, no separate Cash account is opened in the ledger. As such, the Cash Book is a journal as well as a ledger and hence it may be called ‘Journalised ledger’.

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