Cash book accounting – lesson 9

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Cash book accounting is a key part of the Processing Bookkeeping Transactions Course, Accounting Trainees must know how to record payments and receipts.

You are part way through the FREE ‘Processing Bookkeeping Transactions’ course and you should have read the pages listed below before reading this page:


Welcome to the Cash Book Accounting

Chapter 8 of the text book on the Cash Book includes the accounting treatment of:
Cash sales
Cash purchases
Discounts received
Discounts allowed
Receipts from customers
Payments to suppliers
General expenses.

It is very important to know how discounts are recorded in the double entry system. They are also a popular topic with Accounting and Bookkeeping examiners.
Another topic that students often have difficulty with is distinguishing between different types of expenditure such as revenue and capital expenditure. This again is an important topic with examiners and a student should be able to define different types of expenditure and give examples.

Cash is the lifeblood of any business and it is important that the bookkeeper or the Accounting trainee knows the bookkeeping theory behind a cash book whether it is manual or computerised.
Basically the cash book is used to record money coming in and out of the business.  The cash book will have many analysis columns for bank, VAT, discounts and other general expenses such as payments to petty cash.

This way to the cash book

The cash book is a book of prime entry and used for bank receipts and payments and is an integral part of the accounting double entry system.

It is vital that you as a bookkeeper or an accounting trainee understand the theory and principles behind cash book accounting. Try the quiz below and test your knowledge of the Cash Book Accounting.
Here is the link to amazon for the course books:

Quiz: Cash Book Accounting

Before attempting this quiz you should have read chapter 8 entitled "Cash Book" of your recommended textbook “Bookkeeping 1"
Please attempt all questions and then press the submit button at the end, you will then be taken to your results page.

Good luck!


Receipts are recorded on the ....................... side of the cash book.

Payments are recorded on the ................. side of the cash book.

Tick all the typical columns you would find in a cash book include:
(1 mark each)

The amount of money invested in the business by the proprietor is called ..............

Expenditure on the purchase of non-current assets (fixed assets) is called ........................... expenditure.

Expenditure on the day to day running of a business is called ..................... expenditure.

Money taken out of the business by the proprietor is called ....................

Trade discounts are recorded in the cash book.

Early settlement discounts are recorded in the cash book.

An amount received by a business from its suppliers for early settlement is called discount ......................

Leaderboard for Cash Book

1. jjhh-33 Points
2. -33 Points
3. -33 Points
4. Jo-33 Points
5. -33 Points

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