Pass Book and Cash Book

Pass Book

Each depositor gets a pass book and cheque book from the bank. The passbook is the copy of the depositor's account in bank's ledger. It's another form is the bank statement. It is a summarized statement of all deposits and withdrawals made by the depositor during a certain period of time. The entries of all deposits and withdrawals made by the client are passed in the passbook by the bank. The passbook shows the balance of the client after each deposit and withdrawal.

Cash Book

A cash book is a primary record of all the receipts and payments made in cash and through the bank. It has the features of the primary book and principle book. It is different from cash account as it is only a principle book. It has two sides i.e. debit side and credit side. The debit side shows cash receipts and the credit side shows cash payments. All cash and cheques received and deposited are shown on the receipt side. All payments made by cash and cheques are shown on the payment side. At the end of a given period, its balance is obtained to know the amount of cash and bank balances.

Types of Cash Book

A business maintains one of the following types of cash book as per its requirements:

Simple Cash Book

It is a single column cash book. It contains only one amount on its both sides. It records only cash receipts and payments. It is similar to the cash account. It records all cash receipts on its receipt side and all cash payments on its payment side. It is balanced usually on the daily basis to report the amount of cash lying in the cash book. After its preparation, individual accounts are opened in the ledger.

Simple Bank Book

A simple bank book is similar to a bank account. It contains only one amount column on its both sides. It records only those transactions which are performed through the bank. It records the cheque received and deposited on its receipt side and the cheque issued on its payment side. It is suitable for a business which follows the practice of receiving and paying amount only through cheque.

Cash Book with Cash and Discount Columns

It is a type of double column cash book. If a business performs transactions mostly in cash by allowing and receiving discount then it will be suitable to maintain this type of cash book. Cash receipt and discount allowed are entered on receipt side and cash payment and discount received are entered on the payment side. It does not record cheques or banking transactions.

Cash Book with Bank and Discount Columns

It is a type of double column cash book having bank and discount columns. A business allows cash discount to its customers at the time of receiving cash. The amount of cash received and discount allowed are entered on receipts side. The business receives a discount from its suppliers at the time of paying cash to them. The amount of cash paid and discount received are entered on the payment side.

Cash Book with Cash and Bank Columns

It is combined form of simple cash book and bank book. The cash column records receipts and payments in cash and bank column records receipts and payments through bank. The cheque received and deposited is recorded on receipt side and cheque issued on payment side under bank column. The cash and bank columns are balanced to know cash and bank balances. The cash column always shows debit balance but the bank column either shows debit balance or credit balance. It contains contra entry for the amount of cash deposited into and withdrawn from the bank.

Contra Entry

The act of entering a cash transaction both on receipt and payment sides under cash and bank columns is called contra entry. It is the indication of completing double effect which does not require posting.

Cash Book with Cash, Bank and Discount Columns

It is also known as triple column cash book as it contains three amount on its both sides. These three columns are cash, bank, and discount. The amount of cash and cheque received and discount allowed are entered on receipt side and the amount of cash and cheque given and discount received are entered on the payment side.

Things to remember

• A cash book is a primary record of all the receipts and payments made in cash and through bank. It has the features of primary book and principle book. 
• The act of entering a cash transaction both on receipt and payment sides under cash and bank columns is called contra entry. 
• The passbook is the copy of the depositor’s account in bank’s ledger. 
• The another form is of pass book is the bank statement. 

• It includes every relationship which established among the people.
• There can be more than one community in a society. Community smaller than society.
• It is a network of social relationships which cannot see or touched.
• common interests and common objectives are not necessary for society.

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