CA Foundation Exam > CA Foundation Questions > Cash Book is a type of __ but treated as a __...
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Cash Book is a type of __ but treated as a ______ of accounts.
- a). Subsidiary book, principal book
- b)Principal book, subsidiary book
- c)Subsidiary book, subsidiary book
- d)Principal book, principal book
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
Cash Book is a type of __ but treated as a ______ of accounts.a). Subs...
Cash Book is both a Journal and a ledger: Cash Book plays dual role as a boor 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 cash book posted to various accounts in the ledger. The recording of transactions in the cash book takes the shape of ledger account. As receipts of cash are entered on the debit side and cash payments on the credit side; there is no need of cash account in the ledger. Thus Cash Book serves the purpose of ledger account. It is clear from the above that Cash Book fulfills the function of a subsidiary book (Journal) and ledger both.
Most Upvoted Answer
Cash Book is a type of __ but treated as a ______ of accounts.a). Subs...
Cash Book is a type of Subsidiary Book but treated as a Principal Book of accounts.
Explanation:
Subsidiary Books:
- Subsidiary Books are the books of original entry where transactions are first recorded.
- Examples of Subsidiary Books are Cash Book, Purchase Book, Sales Book, etc.
- These books are maintained to record transactions of similar nature in a chronological order.
- The entries in these books are then posted to the ledger accounts.
Principal Books:
- Principal Books are the main books of accounts where ledger accounts are maintained.
- Examples of Principal Books are General Ledger, Trial Balance, Profit and Loss Account, Balance Sheet, etc.
- These books are maintained to show the final position of the business.
Cash Book:
- Cash Book is a Subsidiary Book where all cash transactions are recorded.
- It has two sides - Debit side for cash received and Credit side for cash paid.
- It is also known as a cash ledger or cash account.
- It is treated as a Principal Book because it is a part of the ledger accounts.
- The balances of Cash Book are directly transferred to the General Ledger.
Conclusion:
Cash Book is a type of Subsidiary Book because it is a book of original entry. However, it is treated as a Principal Book because it is a part of the ledger accounts and its balances are directly transferred to the General Ledger.
Explanation:
Subsidiary Books:
- Subsidiary Books are the books of original entry where transactions are first recorded.
- Examples of Subsidiary Books are Cash Book, Purchase Book, Sales Book, etc.
- These books are maintained to record transactions of similar nature in a chronological order.
- The entries in these books are then posted to the ledger accounts.
Principal Books:
- Principal Books are the main books of accounts where ledger accounts are maintained.
- Examples of Principal Books are General Ledger, Trial Balance, Profit and Loss Account, Balance Sheet, etc.
- These books are maintained to show the final position of the business.
Cash Book:
- Cash Book is a Subsidiary Book where all cash transactions are recorded.
- It has two sides - Debit side for cash received and Credit side for cash paid.
- It is also known as a cash ledger or cash account.
- It is treated as a Principal Book because it is a part of the ledger accounts.
- The balances of Cash Book are directly transferred to the General Ledger.
Conclusion:
Cash Book is a type of Subsidiary Book because it is a book of original entry. However, it is treated as a Principal Book because it is a part of the ledger accounts and its balances are directly transferred to the General Ledger.
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Cash Book is a type of __ but treated as a ______ of accounts.a). Subsidiary book, principal bookb)Principal book, subsidiary bookc)Subsidiary book, subsidiary bookd)Principal book, principal bookCorrect answer is option 'A'. Can you explain this answer?
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