Cash book consists of cash and bank accounts taken out of ledger and maintained separately; thus it is a substitute of ledger for cash and bank accounts. It is also a book of original entry because cash and bank transactions are not recorded in any other subsidiary book.
image source: bizhub.anz.co.nz/media/321433/samplecashbook__2_.jpg
Cash book may be described as a primary book meant for recording all cash (including bank) transactions-date-wise, usually accompanied by brief narration. It serves the purpose of ledger also.
It is journal in the sense that all cash transactions are primarily recorded in the cash book with narration and therefore, these are posted to the relevant accounts in the ledger. Cash book is also ledger in the sense that it serves the purpose of cash account and bank account.
ADVERTISEMENTS:
“Cash book is actually a ledger account but owing to the large number of entries made therein, it is kept in a separate book called cash book. Which is also used as a book of prime entry.”