You know that in any business there would be numerous transactions which involve either receipt or payment of cash.Cash sales, receipts of cash from debtors, cash purchases, payment of cash to creditors, payment of expenses such as salaries, rent, taxes, etc. are examples of cash transactions. All these transactions are recorded in a separate book called Cash Book.
The ruling of cash book is similar to that of a ledger account. All cash receipts are recorded on the debit side and all cash payments on the credit side. Thus, it serves the function of a Cash Account, As a matter of fact, cash book plays a dual role. It is a book of prime entry as well as ledger account. Hence, when cash book is maintained there is no need to have a Cash Account in the ledger.
There are different types of cash books in use by the business. These are : i. Simple or Single Column Cash Book, ii. Two or Double Column Cash Book, iii. Three or Triple Column Cash Book.